Operation = China
52Wk High = 0.475
52Wk Low = 0.175
ROA = 14.25% (2009)
ROE = 18.57% (2009)
EPS = 0.0348 (based on 3Q2010)
P/E = 13.51
Intrinsic Value
P/E Model = 0.522 SGD (Based on Fair P/E of 15)
DCF Model = N.A (Inconsistent Operating Cash Flow )
EPS Model = 0.463 SGD
Another interesting company that market capitalization almost tripled in a year. Recent 2010 remarkable performance has resulted in the company giving dividend for 2Q and 3Q of $0.0688SGD. The good performance is expected to apply to 4Q2010 too.
My prediction would be there would most likely be little to no dividend payout for 4Q. Reason being the dividend payout so far has been high enough to satisfy the shareholders and the payout exceed the net profit of the company. Hence, the shareholder's equity is actually decreasing due to the recent 2 interim dividend. Hence, I believe a sensible management would not give out so much dividend as the money could be re-invested to fuel for more growth. Further giving out of dividend would just drive the stock price higher, while making the book value lower, making the stock less desirable to potential buyer.
However, the company potential for growth is quite remarkable as shown by the growing sale in the company high margin product ( drugs under C&O own branding, exclusively distributed drugs, and amoxycillin ). With the growing emphasize put on healthcare in China, and company overseas cooperating in R&D, I believe that it is a stock worth buying.
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