Fuxing China – Growing to become a fully integrated zipper maker

Fuxing China announced its plans on 22 Dec (after market close) to acquire three companies, viz Fulong Zipper (“FZ”), Jianxin Weaving (“JW”) and Fuxin Electroplating (“FE”) for a total cash consideration of RMB372m. Both analysts (DMG and NRA) who covered Fuxing viewed this acquisition positively. Nevertheless, with reference to Table 1 below, it is apparent that the share price fails to perform. Table 1: Fuxing’s share price performance post the announcement Date Closing Price Change in Price Remarks 22 Dec 10 $0.170 No change Announcement was made after market closed on 22 Dec. 23 Dec 10 $0.175 +$0.005 24 Dec […]

Swiber – A likely beneficiary from the buoyant oil and gas industry

Half a year ago, Swiber has been a much touted stock as its order books swelled to US$1b which is an all time record. Nevertheless, its share price failed to impress with a 2.0% year to date (“YTD”) loss vis-à-vis STI’s 8.5% gain. Notwithstanding the underperformance, Swiber looks interesting due to the reasons below. Excellent macro conditions According to the International Energy Agency, it postulated that demand for oil will rise 260,000 barrels more than its previous forecast to 88.8 million barrels a day next year. Furthermore, based on Infield Systems’ latest offshore fixed platform data, there is likely to […]

Capitamalls Asia – An opportunistic play

Before I start, I will like to state that this short write up, similar to the opportunistic play on Capitaland on 30 Nov and Wilmar on 5 Oct, is to highlight an opportunistic play on Capitamalls Asia (“CMA”). This is based on technicals, and not an in depth analysis on CMA’s fundamentals. Worse STI component stock performance on a year to date (“YTD”) basis With reference to Table 1 below, it is apparent that CMA is the worst performer among the STI component stocks. However, this underperformance has also allowed it to have the highest potential capital gain (due to […]

Eratat Lifestyle – Is the market missing out on something?

While scrolling through the approximate 800 plus stocks listed on the SGX based on potential capital upside, Eratat Lifestyle (“Eratat”) came up to be one of the stocks which provide the highest potential capital upside.  Average consensus target price is around $0.44 which represents a whopping 120% potential capital upside from the closing price of $0.20 on 10 Dec 10. Is the market missing out on Eratat or the market knows something on Eratat that the analysts are unaware of? This piques my interest and spurs me to take a deeper look into this counter. Description of Eratat Lifestyle Eratat […]

Key takeaways from Fuxing 1-1 meeting with the CFO

Key takeaways from Fuxing 1-1 meeting with the CFO With reference to my write-up on Fuxing China, 7 Nov 10 http://ernest15percent.com/index.php/2010/11/08/fuxing-backed-by-014-of-net-cas/ , I have mentioned that I will check with their management to understand more about the company and industry before deciding whether to put in my recommended list. Subsequent to its 3QFY10 results, I dropped an email to Mr Koh Choon Kong (“CK”), CFO on some queries on Fuxing. He promptly replied and took the initiative to come down with Ms Jennie Liu, Investor Relations Manager, to CIMB office to discuss with me on an 1-1 basis. Below are […]

What is book value? Are companies trading at P/BV < 1 value plays?

From time to time, I would be invited by Nextinsight, financial website http://www.nextinsight.net/index.php/story-archive-mainmenu-60/903-2010-/3253-just-ask- to answer queries from their readers. Here is the latest answer by me to a reader asking about Book Value plays. Q1. What is book value? Book value (“BV”) has a couple of definitions. From an investment and “layman” perspective, it refers to the balance left for the investors when a business is liquidated and the debts are paid. In order to calculate book value, one would use assets – liabilities on the balance sheet. Generally, are companies trading at P/BV < 1 value plays? For companies […]

Capitaland – An opportunistic play

Before I start, I will like to state that this short write up is to highlight an opportunistic play on Capitaland and not an in depth analysis on Capitaland’s fundamentals. YTD – underperformed STI and FTSE Real Estate Index With reference to Chart 1 below, it is apparent that Capitaland has underperformed the FTSE Straits Time Real Estate Index (“FSTRE”) and FTSE Straits Time Index (“FSSTI”) by more than 16-17% year to date. This is due partially to the clamp down measures by the SIN government but mainly to the tightening measures by China as Capitaland has a significant exposure […]