(13-09-2014, 03:46 PM)budgetier Wrote: [ -> ]I bought some Sunsine shares a few months back when the prices of rubber accelerators were much lower than they are now. Am wondering whether the current prices have already reached all-time high with the prospects of no significant increases in the near future or can we expect further spikes to come. Wld appreciate the views of members. Thank you.
2Q 14 accelerator ASP of RMB 20,400/tonne is still lower than the level (RMB 21,200) before the price cut in 4Q 2011:
2Q 11…..21,300
3Q 11……21,200
4Q 11...19,600 (Price cut)
1Q 12……18,800
2Q 12……18,900
………………………..
4Q 13……18,200
1Q 14……19,300
2Q 14…...20,400
Price of aniline, the major raw material of accelerators, was lower in 2011 (around RMB 10,000 per tonne). If aniline price then were at 2014 level (of around RMB 11,000) and pollution controls were strictly enforced, 2011 ASP would have been much higher than RMB 21,200.
2Q 14 ASP of RMB 20,400 is not high, and profit upside is possible in the coming quarters.
A writer from The Edge, analysts from 5 brokering houses and several investors plus one ID are currently on their way to Shanxian and Weifang to visit China Sunsine. Looking forward to their reports after the trip.
(15-09-2014, 08:06 PM)Bluechipfan Wrote: [ -> ]A writer from The Edge, analysts from 5 brokering houses and several investors plus one ID are currently on their way to Shanxian and Weifang to visit China Sunsine. Looking forward to their reports after the trip.
May I know where you got the news ?
Field trip reports not out yet but the indication based on price movements is positive. Still eagerly waiting for the reports from The Edge and Nextinsight plus the 5 brokers.
Last Friday's closing price was $0.355.
Today closing price maybe around $0.43. Profit of more than 20% in a week.
The analysts from the brokerages and private investors may have heard and seen very positive things during their trip and bought more shares themselves or could have asked their clients and friends to buy.
Keep a lookout for the analyst reports coming up.
Today, the trading volume hit 5,200 lots and share price has reached as high as 43.5 cents. Is the price too high now?
(19-09-2014, 04:57 PM)Young Investor Wrote: [ -> ]Today, the trading volume hit 5,200 lots and share price has reached as high as 43.5 cents. Is the price too high now?
You know the advantage of long? How high can the price move up? In theory, indifinitely! Not saying sunsine is the case here but you get the idea. Most importantly keep an eye on profits, EPS, BS etc and respond accordingly.
AmFraser has projected that FY14 net profit could reach RMB 224m. EPS of Singapore 10 cents. Sunsine is now trading at 4.2 FY14 P/E.
A P/E of 7x of FY14 look reasonable for me.
The stock price has proven me wrong to-date, and time to re-confirm my view
The company is a right company in management and business model, but in a wrong sector, with depressing ASP of its key product, the accelerator, without a significant increase in market share.
ASP is a key indicator, and has been observed closely. Will the current ASP up-trend sufficient for buy decision? IMO, the up-trend might not be sustainable. The up-trend isn't due to market forces, but a temporary situation due to policy.
By right, the debt should be reduced by now with the increased ASP, even after factor in the new non-core investments. It might indicate that the management is aware of it, and be ready for a "normalization".
In short, the over-capacity issue still around, but temporary depressed, and will come back in near term, thus the decision to hold/monitor is still a valid conclusion.
Well, I might be proven wrong again by its market price
(not vested)