KLSE used to be #1 performing stock market in this region, maybe those people in China was convinced by certian individuals that our market will recover to its former state. Anyway, after realising this problem, they are planing to have a secondary listing in Hong Kong, singapore or London soon. BUT before that, there is this Anwar factor, with him in the parliment ( and potentially becoming PM ) foreign investor might be attracted to come in... and who will they notice ? HUAAN is definately one of them... it is very unusual for a BLUE Chip company like HUAAN is trading below RM1 ( unless someone is playing up something, someone could be accumulating at cheap price ). When listed in Hong Kong, the prices of HUAAN is definately going to rise.

Do you know how big is this company in China ? they hire more than 1000 workers in just 1 site which is 319,014 sqm... thats meter, not feet... do you know how big is that ?

http://www.sinohuaan.com

This post has been edited by tsd: Aug 29 2008, 07:41 AM

This is 10 years ago story prior before 1997. Since then KLSE no longer a major attraction for foreign investors (for equities market). This part still really puzzling me of its listing in KLSE, may be got some relationship with Antah shareholder previously. That's my guess only.

Again, explain 12352 times already, (joking only) how large, how many employee, how tall the company building, how sizeable the company is not the most important matter, what matter most for the stock market and its share price is its earning ability, competitiveness and able to generate profit in term of dividend to the shareholders.

Sizeable of company, number of employee never a good benchmark comparison as different industry has different nature of business which is not comparable. Mining company surely is more labour intensive and work on sizeable area, while for tobacco company like BAT, it might be having less than 100 employee and with a small factory but still able deliver the same revenue and profit compared to 10,000 workforce company. So can't really use those figure to compare, the key issue is always efficiency, competitiveness of the company within the industry and ability to generate profit and create wealth to the shareholder.

Financial report basically reveal almost the details of the company (like how much worth of those sizeable building/ work area already), so it is much better look at its financial reportf or justification rather than looking at the size of the company. No offence and don't get me wrong, not saying it is not good or good (as above statement is a more general statement, not specifically towards Huaan issue), just to highlight what to focus when evaluating a company or stock.

Just my 2 cents.

This post has been edited by cherroy: Aug 29 2008, 10:36 AM

Thanks for the sharing, it was indeed an informative one. It is very true, a share price is drive by its earning. If earning is deteriorate there goes the share price as well.
At the moment Huaan's earning seems to be inceasing, not sure how it will fare when it capacity is in full operation in near future. Should expect a good earning ahead but anything can happen then, no one can guarantee its safety when come to share invesment but what we can do is to understand the current finnacial condition of HUaan and also it prospect in future. This will tend to lower the risk.
I bought some Huaan shares recently and been keeping for a while. Hope it value appreciate and maintain a sustainable earning in years to come.

This post has been edited by smartly: Aug 29 2008, 02:20 PM

I know some company big size but not doing well... However size makes them NOTICIBLE. Imagine if investors are visiting china, then the saw that plant... first thing in their mind is "WHAT THE HACK IS THAT ?" if the company is small, they might not even notice it.

When people notice, people will try to find out... when they see the company financials they will decide ( with HUAAN type of financial results and business, very likely they will pump in money ). A lot of small companies who did very well but get un-noticed. They are simply not visible and dont have capacity if needs arrises... even if someone wants give them big business, they cant cope.

I'm looking in to Huaan as well.

But how did you guys manage to dig up so much info?

Er..... I don't think you are getting my point on previous post.

To look for investment target, equities investors won't strolling around a country then see a huge factory then starting to interested in it. They won't care your factory is 10 acre big or your mine field is 100 hektar.

Equities investors will look for those company that can deliver them good return rate on their investment over the long term, in term of creating wealth as well as through dividend. It is always the main point and main criteria to start with.

We only care how much it can deliver profit and dividend to the shareholders, we don't need to look how sizeable, how large the company factory, how many employee it have etc. This is not the main consideration in equities investment.

Sizeable can be advatange and also a liability which is another issue.

This post has been edited by cherroy: Aug 29 2008, 03:18 PM

Before they invest, they do visit the site. Imagine you are driving along the road infront of HUAAN, after 10KM driving, you still see the same factory. That is impressive. If you have a small factory, how much can you grow ? Can it take in big orders ? What if suddenly a huge project up for tender... HUAAN is the type of company that will win such tender. Investor will invest in these type of company where they are able to take in big business.

Besides all that, HUAAN delivers good dividend, good profits, good cash flow... everything we want is there. I still cant believe it is still under RM1.

Huaan big volume on yesterday trading. Shares exchanging ?
tsd, any comment on this ?

can someone explain to me what is secondary listing and how it is going to effect the price in bursa?

Secondary listing means list the company in another exchange only. Just like Huaan already list in KLSE, they can opt to list at HK exchange, which both exchange is trading on the same share.

It has some effect, depended which one is the dominant trade on it normally market will take the cue from the higher volume market. The less dominant generally will track the dominant exchange traded price. But it can have discrepancy price of price in between depended on demand and supply. But it can't have too great discrepancy as if the difference is too big, it will mean profitable for someone to do the cross-trade or arbitrage aka buy at a cheaper side, the take it to sell at higher price side.

Thnx cherroy for your explaination. btw how about the numbers of shares? is it the same or increase in numbers?

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Added on September 3, 2008, 1:46 pmThnx cherroy for your explaination. btw how about the numbers of shares? is it the same or increase in numbers?

This post has been edited by goognio: Sep 3 2008, 01:46 PM

Number of shares is still the same (if they don't opt for bonus issue or right issue which is different story).

Numbers of shares you can simply increase one, it will affect shareholders benefits.

waluweh huaan already super cheap. how come the price drop so much. got bad news is it?

Bad news -
Profit margin declining due to higher cost
Market view it as half empty (due to tax incentive, etc as discussed in previous post which is not sustainable in long run)
Steel price is declining so might affect coke price steel company willing to pay.

Good -
Price is relative low, might be a bargain, might not be as well.

In this kind of environment, the high volatility of materials price which affect a company cost, it is very difficult to judge a company share price through PER, as no one will have the accurate way to measure it nor foresight to view the exactly future situation will be.

For eg. like Airasia. It is a less than 10 PER stocks by using last Q result, but it becomes a more than 30X PER stocks after recent Q result. So previous drop in share price of Airasia seems investors were getting roughly right on their future forseeable financial result.

So whether current share price reflect future trend of company result, your guess is as good as anyone. Whether it is super cheap or not at current price, only future financial result can give justification on it.

On the other hand, (Huaan is not a steel company, don't get me wrong, just a simple example) steel company tends to trade at lower PER side, because market view those steel price or specifically the tremendous increase in profit margin on steel is not sustainable over the long run, as cost will be catching up like electricity price up significantly as well as others cost like transportation etc.

One thing for sure, there are many foreign investors are fleeing this market and KLSE might be getting downgraded by most investment bank.

Just my 2 cents

I just look at this share. I think not bad if can keep for few more years. What do you think Cherroy?

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Added on September 4, 2008, 1:29 pmThis post has been edited by darkknight81: Sep 4 2008, 01:29 PM

share is still dropping, steel prices has drop quite alot because of over supply... people worry might impact HUAAN cos steel factory may produce less steel, so they might less HUAAN products. Lets hope got some major construction work coming soon to consume the steel.

Somemore the problem in Thailand and BN gov is also in trouble, people are too scared to invest in KLSE.

This post has been edited by tsd: Sep 4 2008, 04:13 PM

Haven't decide to buy yet. Still early.. Haven analyse the PE and DY yet as it jsut listed last year not so easy to see.

But is china man company a bit worry as they are very cunning If buy also buy some only for fun... Don dare to really invest into it. Buying some to ops for some contra gain



This post has been edited by darkknight81: Sep 4 2008, 04:35 PM

A reminder,

You can't rely on PER to make justification at the moment especially those involved in commodities related one, as those past year PER data can be misleading. As we know future earning will be in different picture.
Airasia is the good example lately.

One question always remain on my head when seeing this counter, why they want to list in KLSE in the first place? Most people already know they won't get good premium on listing in KLSE compared to SG or HK or even China market itself. As Huaan core business is in China, not in Malaysia as far as I concern. For Malaysia company, yes, they have no choice but only in KLSE, but for Huaan, it is not the case, they can opt elsewhere that is more liquid and bigger market.

It is relative new company, so what the company policy on dividend not yet known, hard to judge.

I suspect this is sort of bail-out for Antah group which was not doing well.

backdoor listing, easier to achieve.

here is the story why it is listed in KLSE, http://www.sinohuaan.com/images/history2.jpg

This post has been edited by tsd: Sep 5 2008, 01:19 AM