Singapore stocks: Once bitten, twice shy

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(25-05-2023, 04:45 PM)dreamybear Wrote: Thanks for all the replies.

Actually, the context in the course of the discussion and my post is more of fundamentals catching up with undervalued stocks, and not the other way round. I should have been clearer, apologies.

Cld perhaps China Sunsine be an example for discussion ? Why is it trading at such valuations  low P/E, P/B, etc and I think for long periods of time ? Will it one day trade consistently at a higher valuation, e.g. 10x - 15x P/E henceforth ? Wld it have been any different if there were more international investors or if it was listed in other markets like US ?

Financial Summary 2021 - 25

Financial Summary 2017 - 21

While I'm not intimately familiar with the company, I notice that it is a microcap (market cap US$300mil) based in China (political risk, geopolitical risk, S-Chip/Corporate governance risk etc.) selling a niche product (rubber accelerators) that isn't experiencing tremendous growth (export volume, domestic rubber sales etc seems flattish to down in the last 7 years). Margins does look decent, but does require Capex (not asset-light kind of business).

Combining all these factors, it would be unlikely to command high valuation nor high shareholder returns long term IMHO, unless someone have further insights on managements future plans or their product roadmap. Especially in the current political landscape (East-West decoupling etc).

Perhaps other buddies could have further insights.
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger

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