Thursday, October 28, 2004

What's with LFBZ SP?

Update on LFBZ SP - Had hogged "Top Volume" charts yesterday. Closed at $0.20. Suggestive of big movement ahead? Opps, that was my technical past catching up with me. Have you opened a position in it yet? As a pal said, "Don't be penny wise, pound foolish".

I first made mention of Osim when I talked about Global Active [GLA SP]. Its 3Q revenue growth of 3% was Ron's worst showing ever? But I do note that their net profit margin was 11% higher at an okay 7.3%. At a price of $0.965, its P/E is 12.1. Thus, its PEG is approximately 1. Not excellent by Lynch standards. But with the slightly negative sentiment hovering around the counter, I wish to commence a detailed study of it as a buying opportunity into a very good counter which has very good growth prospects:

  • Management has net profit growth target of 20-30% p.a.;
  • Started process to own 100% of its China operations;Has 154 outlets in 32 cities;
  • Total of about 500 outlets in over 20 countries;
  • Demostrated ability to penetrate overseas market - HK and Taiwan contributes 24% and 17% in market share. China is fourth with about 9%, Singapore is third with 13%;
  • Has major stake in GLA SP.

[Identifying growth drivers is a key in Philip Fisher's process.]

Had a quick feel of Sunray too. Despite its attractive valuation of P/E = 4, I have concerns about recurring revenue stream for the counter. Thus, its growth is very much dependent on repeated sales of its medical equipment. Its results have been good so far but I must add that I am also negative because of the concerns surrounding accounting processes of China firms. Another minus for it is that I can't have a "Lynch like" feel of the counter because I don't see its physical presence. :-)



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