Thoughts on Sino Grandness EGM (5 Feb 2016)

Dear all,

Just to share what I have sent to my clients this morning (i.e. 5 Feb 2016), just a few minutes after market opens:

Sino Grandness announced yesterday night that it is calling for an EGM to seek shareholders’ approval for the proposed disposal and / or the proposed material dilution of 20% or more of the company’s shareholding interest in Garden Fresh, pursuant to the proposed listing of Garden Fresh (its subsidiary) on an internationally recognised stock exchange. The EGM will be held on 23 Feb, 10am. Please see the link here for the notice of EGM.

 

My personal takeaway is

This is a good piece of news. In my opinion, it signifies that the IPO stage has (finally) reached the end stage. If the IPO can progress, the concerns on its convertible bonds are likely to be alleviated as they are tied to the IPO. If Sino G can announce the submission of its prospectus, it is likely to re-rate higher.

Just to make some simplistic comparison, at $0.340, Sino G trades at an annualised 2-3x FY15F PE whereas its HK peers are easily trading at 20x FY15F PE.

Having said that, I wish to emphasise that there is still no 100% certainty that Sino G IPO can proceed. It just means that Sino G is getting closer to its IPO listing.

 

Chart outlook

Sino Grandness closed at $0.340 on 4 Feb 2016. There are two observations which I hope to see for the chart to be positive.

a) It should breach $0.355 – 0.360 (200D EMA and downtrend line since Aug 2014);

b) A better picture would emerge if Sino G can break $0.380. If it breaches $0.380 convincingly, it points to an eventual measured technical target of around $0.450.

Both points a) and b) should occur on a sustained basis with volume expansion. Conversely, a sustained break below $0.295 – 0.300 is negative.

 

Readers should do their own due diligence

Sino Grandness is a stock with high price volatility, driven by specific events. Readers should do their own due diligence before making their investment decision (whether to hold, buy or sell). Readers can also refer to this informative write-up on Sino Grandness posted on NextInsight today (click here)

Lastly, besides emailing my clients this morning, I have already alerted those active clients on 4 Feb evening and this morning (7+am) about Sino Grandness’ latest development. Readers who wish to be my clients can consider to sign up here.

 

Disclaimer

Please refer to the disclaimer here

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