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Another Gem.
Its new anti-flammable synthetic cotton has potential.
It said its new anti-flammable synthetic cotton product is expected to command at least 10% to its FY07 and FY08 gross profit.
It added that this new environmentally-friendly synthetic cotton commands at least 10-15% higher selling price than the usual synthetic cotton.
The company will be able to double its production capacity for the mentioned product by Q307 with the opening of its new factory.
It has success fully developed a new anti-flammable Synthetic Cotton with the Institute of Chemistry, The Chinese Academy of Sciences. This new product complements its currrent offering of Synthetic
Cotton. The new product commands a higher selling price due to its antiflammable and environmentally -friendly nature.
Anyone heard anything regarding this company?
Regards
Regards
Mubarak Ahmed Bin Fahad, a special advisor to son of the president of UAE, has entered into agreement to buy 4.89% of Hong Wei at 27 cents.
The Middle East countries are flushed with petrodollars and are investing in stocks in this region and gold.
Extracted from my blog http://kelongstocks.blogspot.com
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[B]Fundamental Analysis[/B]
Hongwei produces polyster differential pre-oriented yarn and drawn and textured yarn. Closest comparable is CG Tech which produces pure polyester spun yarn, cotton and polyester blended yarn, viscose yarn and flame-retardant yarn. Hongwei's products appears to be more differentiated and hence explains the higher margins it commands. From Management: "We were able to maintain our gross profit margin as we were able to pass on the increase in raw material costs due to increase in oil prices to our customers". CG Tech was more cautious on the impact of oil prices saying it might be affected if oil prices continued to rise.
Hongwei expects its new product Polyester Padding Cotton (maximum of 8000 tonnes) which commands higher margins to boost profitability in FY2006. Also with the elimination of global textile and clothing quotas in January 2005, the PRC is expected to benefit from increased demand for polyester fibre. Forecast revenues to rise 30% and net profits to rise 35% (with higher margins and assuming company can pass on increases in raw materials cost to its customers).
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Extracted from my blog http://kelongstocks.blogspot.com
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[B]Technical Analysis[/B]
After breaking out of rounding bottom formation on 03 Feb 06, chart shows prices reaching its technical objective of 28 cents. Currently, Hongwei is in an uptrend channel. It tried to breach the channel resistance but failed with a shooting star formation on 27 Mar 06; since then prices have been consolidating in a tight trading range (26 to 28.5 cents).
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Hongwei moving faster than i tot...up up
Noticed Hongwei has strong support at 0.27
....maybe will break 0.27 by next wk
opinion only...not inducement to buy