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A well primed lion

Initiate with BUY; E&P for free.
of S$2.95. Based on our free cash flow valuations, the current share price is close to
the implied value for SPC’s refining business segment alone. This implies that
SPC’s E&P business unit can theoretically be obtained for free. Buy on SPC’s
attractive valuation, healthy balance sheet, and potential upsides from new oil and

gas discoveries.We initiate SPC with a BUY rating and target price

Refining margins to average US$3.10/bbl in FY09.

resulted in weak Asian refining margins that averaged US$1.06/bbl over a sustained

period in 1998-2001. We think this situation is unlikely to repeat. Refining margins

have rebounded sharply to an average of US$6.60/bbl YTD from US$1/bbl in 2H08,

due to refinery outages. We are not overly concerned with overcapacity, as start-ups

have been pushed back and the breakeven costs of the new refineries are high.

Hence, we are comfortable with our refining assumption of US$3.10/bbl in FY09.The Asian economic crisis

Strong balance sheet can take more E&P acquisitions.

sheet is clean with only short-term debts of S$574m (net gearing: 0.1x), for working

capital. As E&P asset valuations become inexpensive, we believe SPC is wellpositioned

to acquire assets around the region. According to the management,

SPC’s comfortable capital structure is at 1x, which implies the capability to acquire

assets valued up to S$1b. We are optimistic that SPC’s E&P healthy operating

cashflow at an average of S$350m/year is able to support the increased debt profile,

if arises.SPC’s Dec 08 balance

Attractive valuation.

of 8.4x and E&P players of 13.5x. While SPC’s implied refining value of

US$983/bopd is merely 3% lower than the average of US$1,013/bopd, SPC’s E&P’s

implied EV/boe of US$7.80/boe is deeply undervalued, at a discount of 52% to its

peers’ US$16.30/boe. Hence, we think that the current share price has priced in

weakening products demand amid this downturn, but has completely ignored E&P’s

potential. Downside risks include 1.Worse-than-expected refining margins, 2.No new

discoveries, 3.Slower-than-expected economic recovery.SPC is trading at 8.3x FY09F P/E, compared to refiners’ peers

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16-Mar-2009 13:30

China Hongxing / Kim Eng "BUY" recomendation

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Kim Eng Buy recommendation dated 16/3/09:

China Hongxing – Company Update (Pauline Lee, DID: 6432 1453)
Previous Day Closing price: $0.08
Recommendation: BUY (under review pending briefing)
Target price: $0.23 (under review pending briefing)
February 2009 order book update
The group secured approximately RMB 800m worth of orders at the 2009 Autumn/Winter Collection Trade Fairs held in Tianjin and Xiamen at the end of February. This was a 20% decrease from a year ago. Judging from the last three trade fairs held, the total orders received for the first nine months of 2009 would have grown by approximately 9% from the previous corresponding period.
China Hongxing’s February trade fair attracted 2,500 participants. The trade fair showcased approximately 240 new footwear models and approximately 600 apparels and accessories designs. The apparels and accessories accounted for the bulk of the orders (approximately 55%), while footwear accounted 45% of the orders.
Secured five-year sponsorship deal to be offical apparel partner of ATP1000 Master Series Tournament
The group also announced that it has officially signed a five year sponsorship deal with the Shanghai Master Series Organising Committee (SMSOC) to be the official apparel partner for the Association of Tennis Professionals (ATP) 1000 Master Series tournament, which will be hosted in Shanghai starting 2009. Besides being the official apparel sponsor, China Hongxing will also work closely with ATP officials to conduct research and develop Erke-branded products. China Hong will also work closely with SMSOC to organise a series of tennis tournament-related activities and programmes.
According to the Chairman, Mr Wu Rongguang, the ATP1000 Master series is highly prestigious and will bring the world’s top tennis players to China, giving people the opportunity to discover and appreciate world-class tennis. China Hongxing’s collaboration with ATP is a testament to the strength and prominence of Erke as a leading tennis brand in China.

The Shanghai ATP 100 Masters tournaments will be held around October each year where total prize awards for all 5 years will total more than US$20m, making it Asia’s highest prized tennis tournaments and only second globally to the four Grand Slam tennis tournaments. The 2009 ATP1000 Shanghai Masters tournament will be held between 11 – 18 October, which is slated to attract more than 80 top global tennis players with 99 exciting matches to be played. The Group believes that this sponsorship with the Shanghai ATP1000 Master Series will reinforce the Group’s efforts in building its brand image and further enhance its brand visibility in the PRC.

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12-Mar-2009 22:40

Others / All china shares listed in SGX are dead

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The tide is gradually receding, exposing those naked swimmers (suckers).

Wait for the tide to fully recede & see which are the S-chips not swimming naked, these will be the cream of the crop.

I think SGX should shoulder the blame if they did not pre-warn them to behave themselves prior to listing, remind them the consequences of misbehavior, running routine fine-toothed comb & impose stringent oversight over these suckers & haul all these suckers to court with heavy penalty as a warning to would-be suckers. As the saying: "Kill one to warn the thousands" .

Sporeguy ( Date: 12-Mar-2009 19:46) Posted:

I avoid S shares just like I avoided CLOB shares even they were dirt cheap in their last days. Cannot trust the Msian govt and even worst is their stock markets ethics.

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12-Mar-2009 12:07

China Hongxing / What happen to this stock?

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CHHX is not only the only stock dropping, I think u have to look at the whole mkt in perspective, it is a whole mkt meltdown, fear & panic & most likely capitulation which is usually followed by a sharp multi-month rebound as it is grossly oversold.

Mkts tends to overshoot in both over-greed & over-fear condition followed by sharp rebound to correct the overshooting.

serene ( Date: 12-Mar-2009 11:18) Posted:

Will this fellow follows the path taken by Oriental Century?

serene ( Date: 12-Mar-2009 10:26) Posted:

If Co. has so much cash, why mgt not using them to shore up the share price? It is dropping like bird shit. Hitting my TB price soon.

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10-Mar-2009 22:35

China Hongxing / What happen to this stock?

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In Straits Times dated 25/2/2009:

"CHHS told SGX tat it ws not aware of any reason for such a decrease other than the general price weakness of China-based S"pore listed companies".

It added tat it "believe the group's STRONG BALANCE SHEET is sufficient to support its business operations despite the challenging environment this year

richtan ( Date: 10-Mar-2009 22:32) Posted:

CLARIFICATION TO BUSINESS TIMES ARTICLE

We refer to the Business Times article (25 Feb 09, page 5) titled “Talk of accounting issues,

margin calls hurts S-chips”.

The Board of Directors (“Board”) of China Hongxing Sports Limited (the “Group”) wishes to

assure the financial community that the Board and management team conducts itself with the

highest standards of corporate governance and transparency. The Group has always exercised

care and caution in implementing its expansion plans and strategies and will continue to do so

in the current challenging economic climate.

In addition, the Board would like to clarify that in view of the uncertain economic environment, it

was deemed prudent to maintain its cash position and not declare a final dividend for the year.

An interim dividend of RMB0.015 per ordinary share was declared in the first half of financial

year ended 31 December 2008, which was paid to shareholders in September 2008.

The Group is in a strong net cash position, with no long term debt obligations and short term

borrowings amounting to RMB 6.0 million only. Bank and cash balances of approximately

RMB1,981.7 million as at 31 December 2008 is the largest asset in its balance sheet, resulting

in a strong net current asset base of RMB3,460.7 million. The cash will be used to support the

Group’s operations in the current financial year.

BY ORDER OF THE BOARD

Chief Executive Officer and Executive Director

Wu Rongzhao

27 February 2009

richtan ( Date: 10-Mar-2009 22:26) Posted:

The only reason to my awareness why it drop is due to the recent bad news about ferrochina, fibrechem, Sino-Env & Biz Times report on "Is the cash there" (thus affecting most s-shares in general) which CHHX replied positively to SGX.

Also, in fact, CHHX is not the only stock being sold down, look at the many stocks that are now trading at around this price

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10-Mar-2009 22:32