Sunday, November 26, 2006

Hsu Fu Chi

What kind of name is this? Sounds more like the CEO of SGX? Hahaha. Anyway this is a China F&B play and based on the positive sentiments right now, it should get a decent debut.

Looking at the valuation of the company, let’s take a closer look at the numbers. The gross margins are definitely attractive at 35% to 40% but the net margins definitely disappoints at 9%-12%. Synear and Want Want are able to generate better net margins than Hsu Fu Chi. While Synear is now trading at 30x and Want Want is at 17x historical PE. It remains to be seen if Hsu can attract such a valuation.

Based on my 2007F projections EPS of 5.63 cents and a fair value PE multiple of 15x-20x PE, it would indicate a fair value range of 85 cents to 112 cents. In that regard, a maximum pricing of 85 cents will mean that the counter is fairly valued at IPO price. It would definitely be more attractive if the underwriters can priced it below 80 cents (say 75 cents). The negatives about this Company are the rumors that it has failed to list in Hong Kong previously as well as the untested strength of its underwriter, Cazenove. However, the fact that the public float of 10m shares is relative large and that the IPO application period for the public tranche is only open for 5 days meant that the underwriter has already placed out all its 115m placement tranche and is confident that the 10m public tranche would be fully subscribed as well.

Sunday, November 19, 2006

Gallant Venture

I hope to post to my blog more regularly from now onwards and hopefully will help me and my little ninjas in uncovering little gems on the Singapore bourse.

The technical picture of GallantVentures looked rather bullish as it retriggered the parabolic SAR again and it also broke the downsloping resistance line. It has been on an upward trend since its IPO back in June 06. A longer term trader who wants to be in the market at all times will go long now at 95 centsand the 'cut loss' level is around the 86 cents as implied by the Parabolic SAR .

Fundamentally, the stock is not cheap as it trades at 52x 2006F PE. It may not be fair to use PE as a valuation methodology for a 'real estate' stock. Kim Eng gave two target price, 102 (if Lagoi Bay is developed) and 177 (present value of its total land bank and cashflows). I have no comments on the FA of this stock except that it is 'not very cheap' currently. However, if the value of its landbank rises as the island redevelops and attract more investors, that is another story altogether.

Monday, November 13, 2006

Pirates of the Caribbean

It has been a long time since I last posted on my blog. I have been very busy with the setting up of the Ninja Trading School and amazingly busy travelling due to work in the last 1 month. Anyway, I just post a few of the pictures which i took during a business trip to the Caribbean. You must be saying 'wow' this is a dream job... but frankly travelling on business to such places is 'no joke'. You have to endure > 22 hours of flight, go through the very troublesome customs a few times and then just stay there for 2 nights alone when everyone around you is there on a holiday...

(The view from my hotel balcony. The Caribbean Sea really looks enticing isn't it?)

Frankly I am not a beach person (afterall, we are in Singapore!) but I must admit the sea with its various layered of crystal blue looks really clean and good. I couldn't help but join in the fun as well after all my meetings...

(The picture of a similar catamaran which i am in)

I decided to make the full use of time by taking a cruise to snorkel with the turtles and over some shipwreck. I sighted some flying fish there! It was really amazing to see that fish can 'fly'! The turtles are truly overfed from the daily feeding and snorkeling session as someone will 'lure in' the turtles with fish meat. The Captain warned all male participants to wear their trunks as the turtles will just bite anything that dangles and looks like a fish.

(stopover for lunch near Sandy Lane where Tiger Woods got married!)

We stopover for lunch at a place called Sandy Lane (the whitish building in the background). While it seemed nothing 'spectacular', it costs more than US$1,000 per room per night!!
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