Monday, December 13, 2010

XiDeLang Holdings 5156

Xi De Lang is proposed a private placement recently to raise fund RM 20 million by issuing another 40 million new shares. Currently, it has 400 million shares, after the private placement, the total number of shares to be 440 million.

Based on the last quarter, 30 Sept 2010. It registered a net profit RMB 47 million, which roughly equal to RM 22 million. If we divide RM 22 million to 440 million shares, it gives EPS 5 cents. Assuming next 4 quarters deliver with the same result, then we can expect the whole year to get EPS 20 cents.

Current stock price is trading at 47 cents, which equal to PE 2.35

I have checked through its last few quarters result. Gross profit margin is increasing from around 30.5% to 34.0%. However selling and distribution expenses is also increasing from 2.0% to 8.0%, this is due to company advertisement strategy. I think the advertisement strategy is working as you can see from the increasing gross profit margin.

Administrative expenses stands around 2.1% and finance costs is below 1.0%. Both are showing healthy at the moment.

Recent private placement might due to tight cash flow as XDL is constructing the new plant and need to use a lot of cash and at the mean time need to expand its business.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.