Friday, September 13, 2013
China Stationery Limited
Watching an article from TheStar Business News column drive to to write something what I feel is not so true from investor perception.
Since the first China base company XingQuan listed in Malaysia stock exchange in Bursa, their performance is well known by those who follow the stock market trend closely.
It is already a norm which most of the investor may agree that China base company listed in Malaysia is trading at the lowest PE range among other listed company in Bursa, by using the normal valuation method, a newbie in stock market will always tend to found that they are extremely undervalue, yet their stock price is fail to perform from what your valuation had done, not even near to it.
Normally what analysis blame to their bad performance in share price is due to some bad perception on the history of some China base company that listed oversea at US, Canada or Singapore, the accounting fraud is the main concern. And foreign investor is not easy to do a site visit to the Company as it base in China.
Another reason to be blame may be is although with the low PE and able to generate huge profit, but the dividend policy is quite stingy which their reason is China fund raising through bank is not that easy like Malaysia and the cost is very high, so they prefer to keep the cash from the profit as their operating cash reserve.
But does it mean this Company in Malaysia is really lack of retail investor in Malaysia? I'm not think so.
May be we can see the first few China base company listed in Malaysia which mainly on shoe maker industries, is trading quite a normal low volume, I would like to use China Stationery Limited (CSL) as special case study on those blame.
Investor who follow the CSL share price trend since its first day IPO debut in Bursa, should very well noted that they actually not open below their IPO offer price, with continuous high volume trading and it actually trading at above RM1 for quite some time after the IPO debut.
And you can see their current price is merely RM0.205 (Closing price on 13th September 2013) now, but investor always can noted that their trading volume is always among the top 20 in Bursa during this period.
So do anyone think there are no retail investor participated into it with this volume? May be a lot of retailers is just speculating on it, but if one who had join share market forum (There are quite a few forum site on Malaysia share market discussion), ones may noted there are quite a lot of retailer involve in CSL, some may stuck in various price from RM1 all the way to current RM0.205.
So personally I'm disagree that there are lack of retail interest on this CSL, what I can say is, CSL share issue amount is too big for Malaysia retail investor to do any impact on their share price movement, share price performance......the ball is still under the foot of those major shareholder, so it is very weird claim that China base company bad share price performance is due to lack of retail investor.
The full article published in TheStar today as below,