Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Thursday, July 22, 2010

Zhulian Berhad : Expanding Its Presence In South-east Asia - 21/7/2010

Undervalued gem? Zhulian is currently trading at FY11/10 PER of 9.6x and FY11/11 PER of 8.2x on consensus estimates, with a decent net dividend yield of 6-7% p.a.. We value Zhulian at RM2.40/share based on 10x consensus estimates FY11/11 EPS, which is the target PER that we have assigned for Hai-O. This represents a potential upside of >23%. For comparison purposes, we compare Zhulian to domestic MLM players such as Amway and Hai-O, which are currently trading at an average forward PER of 10-14x FY10 earnings.

Read all..RHB Research Institute Sdn Bhd Recommendation

23.07.10 HwangDBS Vickers Research starts Zhulian Corp (5131.KU) at Buy, with MYR2.85 target; says multi-level marketing company has superior pre-tax profit margin of 30% vs peers' 10%-20% because it manufactures most of its own products. Development of new products, potential expansion into new regional markets (Zhulian has presence in Malaysia, Indonesia, Thailand, Singapore currently) will be key earnings drivers. HwangDBS forecasts earnings CAGR of 15% for FY10-FY12; adds company's strong cash position enables it to pay attractive dividends with yields of 6.0%-8.0%; stock currently trading at 8.2X forward P/E, steep discount to peer average of 11.7X. Zhulian +1.5% at MYR1.98.

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