Last Friday, Dubai created wave in financial market by asking for loan repayment extension. Market suffer a knee jerk sell off, many of the European bank are being affected, because of lending money to them. The debt amount is staggering.
Compared to last Friday sell off, STI only suffered a bit. The market player properly figured out Dubai is not US. Only stocks linked to the middle east likely to be impacted. However, this could be the trigger point for a meaningful market correction.
Those with cash should start looking to add position. Growth likely to be muted for US in coming years. The future still lies with China. Should add good stock which could ride on China wave.
Monday, 30 November 2009
Sunday, 15 November 2009
Hongguo FY09 Q3 result
Revenue +27.23%
Gross profit +17.49% (because cost increase faster)
Selling and distribution cost +35.39%
Net profit -27.5% after the cost and tax increase
Cash and cash equivalent 247,971
Current liabilities 244,356
Debt repayable in one year 40,974
Net cash from operation 46,281
EPS 3.52 RMB cts (27% drop)
Sales still increase due to outlet expansion, but the profitability suffers. The gross profit margin is now 35.2% due to lower selling price. This actually tally with other consumer stock's performance. But management foresee the pick up in consumer demand and would intensify the store expansion. This might signal the bottom.
The result is uninspiring. Year to date, the earning is 13.10 RMB cts. Assume Q4 they are able to earn another 4 RMB cts, it would be 17.1 RMB cts (3.46 SGD cts). At last closing of 0.30 cts, it work out to be PE 8.67. This is not expensive. If the earning growth can restart, it could come down very quickly. Investor might want to look at next quarter result to decide.
Gross profit +17.49% (because cost increase faster)
Selling and distribution cost +35.39%
Net profit -27.5% after the cost and tax increase
Cash and cash equivalent 247,971
Current liabilities 244,356
Debt repayable in one year 40,974
Net cash from operation 46,281
EPS 3.52 RMB cts (27% drop)
Sales still increase due to outlet expansion, but the profitability suffers. The gross profit margin is now 35.2% due to lower selling price. This actually tally with other consumer stock's performance. But management foresee the pick up in consumer demand and would intensify the store expansion. This might signal the bottom.
The result is uninspiring. Year to date, the earning is 13.10 RMB cts. Assume Q4 they are able to earn another 4 RMB cts, it would be 17.1 RMB cts (3.46 SGD cts). At last closing of 0.30 cts, it work out to be PE 8.67. This is not expensive. If the earning growth can restart, it could come down very quickly. Investor might want to look at next quarter result to decide.
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