Company Info
My Analysis
Accounting Ratio
My notes based on 2011 quarter 1 report (number in '000):
- The Group achieved achieved an increase of 32.3% revenue and 14.6% PBT for the current quarter as compared to the corresponding period in the preceding year
- The increase in revenue and profit due to increase in sales volume of shoe sole and the outdoor sports and leisure product segments, particularly the increase in the sale of shoe soles from approximately 2.9 million pairs in Q1FY2010 to approximately 3.8 million pairs in Q1FY2011 and increase in sale of sports apparels and accessories from approximately 1.3 million units in Q1FY2010 to approximately 2.1 million units in Q1FY2011. Another reason is increase in average selling price of shoe sole from RMB17.2 per pair in Q1FY2010 to RMB18.5 per pair in Q1FY2011 and increase in average selling price of outdoor and indoor sports and leisure shoes from RMB91 per pair in Q1FY2010 to RMB107.8 per pair in Q1FY2011
- Based on the Income Tax Law of the PRC for Enterprises with Foreign Investments and Foreign Enterprises, Addnice Sports, Addnice China and Xingquan Plastic are entitled to full exemption from income tax for the first two years and a 50% reduction in income tax for the next three years starting from their first profitable year of operation. Addnice Sports is exempted from the state corporate income tax for its first two profitable calendar years of operation (1 Jan 06 to 31 Dec 07) and thereafter, is entitled to a 50% relief from the state corporate income tax for the third to fifth consecutive years (1 Jan 08 to 31 Dec 10). Adnice China commenced its 5-year tax holiday from 1 Jan 08. Xingquan Plastic has fully utilized its tax incentives and was subject to the full state corporate income tax
- The Group recorded an increase of 15.8% revenue and 17.7% pbt for Q1FY2011 as compared to Q4FY2010. The increase in revenue was due to the increase in the sales quantity of shoe sole and the apparels and accessories product segments. In addition, the revenue contribution for Q1FY2011 is partly from the Autumm products that have higher selling prices as compared to Summer products. Autumm products such as jackets, sweaters and leather-based shoes generally higher selling prices as compared to Summer products such as T-shirt and shirt
- Estimate next 4Q eps after 2011 Q1 result announced = 0.3452*1.1 = 0.3797, estimate PE on current price 1.6 = 4.08(DPS 0.05)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.3452*1.1 = 0.3797, estimate highest/lowest PE = 4.87/3.56 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.095*4 = 0.38(0.095 is average of recent 2Q minus little eps due to end of tax exemption and reduction), estimate highest/lowest PE = 4.93/2.91 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1584*2*1.1 = 0.3485, estimate highest/lowest PE = 3.77/3 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0834*4 = 0.3336, estimate highest/lowest PE = 4.2/3.15
- Estimate next 4Q eps after 2009 Q4 result announced = 0.4288, estimate highest/lowest PE = 3.59/3.03
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| Market Capital (Capital Size) | 479,434,800 (Small) |
| Par Value | USD 0.10 |
My Analysis
| Forecast P/E now | (1.56-0.05)/0.3797 = 3.98 (Moderate) |
| Target Price | 1.90+0.05 = 1.95 (PE 5.0, EPS 0.3797, DPS 0.05) |
| Decision | BUY |
| Comment | Revenue and profit higher than preceding year corresponding quarter, good cash flow, good liquidity ratio, low gearing ratio, receivables collection period still acceptable, SSE index increasing, production line increasing, outlet increasing |
| First Support Price | 1.5 |
| Second Support Price | 1.4 |
| Risk Rating | MODERATE |
Accounting Ratio
| Return on Equity | 31.91% |
| Dividend Yield | 3.21% |
| Profit Margin | 19.77% |
| Tax Rate | 19.22% |
| Asset Turnover | 1.3577 |
| Net Asset Value Per Share | 1.18 |
| Net Tangible Asset per share | 1.18 |
| Price/Net Tangible Asset Per Share | 1.36 |
| Cash Per Share | 0.95 |
| Liquidity Current Ratio | 3.4018 |
| Liquidity Quick Ratio | 3.2733 |
| Liquidity Cash Ratio | 2.5157 |
| Gearing Debt to Equity Ratio | 0.3235 |
| Gearing Debt to Asset Ratio | 0.2445 |
| Average working capital per thousand Ringgit sale | 42.6% |
| Average days to sell the inventory | 13 |
| Average days to collect the receivables | 44 |
My notes based on 2011 quarter 1 report (number in '000):
- The Group achieved achieved an increase of 32.3% revenue and 14.6% PBT for the current quarter as compared to the corresponding period in the preceding year
- The increase in revenue and profit due to increase in sales volume of shoe sole and the outdoor sports and leisure product segments, particularly the increase in the sale of shoe soles from approximately 2.9 million pairs in Q1FY2010 to approximately 3.8 million pairs in Q1FY2011 and increase in sale of sports apparels and accessories from approximately 1.3 million units in Q1FY2010 to approximately 2.1 million units in Q1FY2011. Another reason is increase in average selling price of shoe sole from RMB17.2 per pair in Q1FY2010 to RMB18.5 per pair in Q1FY2011 and increase in average selling price of outdoor and indoor sports and leisure shoes from RMB91 per pair in Q1FY2010 to RMB107.8 per pair in Q1FY2011
- Based on the Income Tax Law of the PRC for Enterprises with Foreign Investments and Foreign Enterprises, Addnice Sports, Addnice China and Xingquan Plastic are entitled to full exemption from income tax for the first two years and a 50% reduction in income tax for the next three years starting from their first profitable year of operation. Addnice Sports is exempted from the state corporate income tax for its first two profitable calendar years of operation (1 Jan 06 to 31 Dec 07) and thereafter, is entitled to a 50% relief from the state corporate income tax for the third to fifth consecutive years (1 Jan 08 to 31 Dec 10). Adnice China commenced its 5-year tax holiday from 1 Jan 08. Xingquan Plastic has fully utilized its tax incentives and was subject to the full state corporate income tax
- The Group recorded an increase of 15.8% revenue and 17.7% pbt for Q1FY2011 as compared to Q4FY2010. The increase in revenue was due to the increase in the sales quantity of shoe sole and the apparels and accessories product segments. In addition, the revenue contribution for Q1FY2011 is partly from the Autumm products that have higher selling prices as compared to Summer products. Autumm products such as jackets, sweaters and leather-based shoes generally higher selling prices as compared to Summer products such as T-shirt and shirt
- Estimate next 4Q eps after 2011 Q1 result announced = 0.3452*1.1 = 0.3797, estimate PE on current price 1.6 = 4.08(DPS 0.05)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.3452*1.1 = 0.3797, estimate highest/lowest PE = 4.87/3.56 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.095*4 = 0.38(0.095 is average of recent 2Q minus little eps due to end of tax exemption and reduction), estimate highest/lowest PE = 4.93/2.91 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1584*2*1.1 = 0.3485, estimate highest/lowest PE = 3.77/3 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0834*4 = 0.3336, estimate highest/lowest PE = 4.2/3.15
- Estimate next 4Q eps after 2009 Q4 result announced = 0.4288, estimate highest/lowest PE = 3.59/3.03
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