China Paper   

China Paper

BP BP BP Cheong.liao BullPointed, BullPunt and BullpProfitting.......Yahoo.. Hip Hip horay China stock got hope liao...

 

Gregory Yap of Kim Eng Securities made several observations in his report at http://www.research.kimeng.com/openaccess/pdfform.cfm?pdffile=China%5FPaper180306%2Epdf These are insightful commentdation. [quote] Valuations and recommendation CPAP currently trades at less than 5x 2005 reported PER and about 4x 2006 forecasted earnings. It also offers a projected dividend yield of about 6%. China Paper was 1st listed in Jul04 at 7x 2003 earnings. Earnings have doubled since then although sales have grown by only 18%. This suggests a tremendous capability within the business to improve yields & margins, enabling the coy to live up to its commitment to pay 30% of profits as dividends.Investors holding on since the IPO would have enjoyed annual returns of 5-6%.We expect the coy to post earnings growth of 15% in 2006, followed by 23%in 2007.Our 2006 forecast is conservative as it does not factor in likely-positive contributions from a new product (details for coated paper yet to be released) or possibility of M&A down the road. Our DCF model values the stock at S$0.65, or potential upside of 77%. We would point out that there's substantial potential for revision as we have very conservatively used a risk free rate of 5% and mkt premium of 10%, which we deem more appropriate for China-based companies due to the higher systemic risk. At S$0.65, CPAP would still trade at just under 8x 2006 forecasted earnings, inline with the average valuations of China plays currently. Other Asian paper companies trade at 11x on average, a discount is justified given d difference in revenue size & mkt capitalisation.

 

Hi Teeth53, Agreed. 1Q result will be out soon and it should be a solid one. Further upgrading may follow after that!!

 

China Paper has a target price of 65 cts, set by KimEng Securities. It's relevant to know that PE px is oni about 7.5X FY'06. Still far from being expensive. happy liao to those believe in this stock, vested here.

 

50 cents barrier broke!!!! The rest will be history!!!

 

Trying to break 50 cents today...Stay tuned!

 

Next barrier is 48c. Once broken will surge to above 55c. Stay tuned.

 

Is it too late to go in for this?

 

46 cents now!

 

Broken 40 cents resistance!!

 

Run again...

 

Gallen, When can CP break 40 cents?? Thanks.

 

Gallen, I like this stock too. Hopefully surge again soon....

 

Did an analysis of this counter for one of my blog's viewers (http://kelongstocks.blogspot.com). Looks deeply undervalued relative to other paper related counters. Here is an extract: China Paper is a vertically integrated paper company equipped with in-house production facilities for the manufacturing of wheat pulp, paper and paper chemicals. Company to upgrade poduction capacity of older lines to increase output by 12.5% in 2006. Company also expects to improve gross margins by increasing internal utilization of wheat pulp. Wood pulp makes up 20% to 25% of the cost of sales of paper products, any fluctuation in wood pulp prices will impact Group?s gross margins. Closest comparables I can find are New Toyo and Tat Seng though the latter mainly deals with paper packaging products. Between the 3 counters, China Paper certainly has the most attractive fundamentals, with highest profit margin, dividend yield and lowest forward P/E. Only Tat Seng has a lower Price/NTA but that probably reflects its unexciting prospects. China Paper even expects margins to increase which is positive given that paper raw material cost is on the rise. Paper stocks usually trade at low P/Es so pegging China Paper at 6x forward P/E yields fair value of $0.50.

 

Volume pick up together with price. Sell from SSH should have been very well absorbed by investors. Look like it is going to surger again to test 40 cents resistance soon.

 

HONG KONG, March 3 (Reuters) - Shares in Nine Dragons Paper (Holdings) Ltd. (2689.HK: Quote, Profile, Research), China's top packaging paper supplier, roared ahead by as much as 46 percent in their Hong Kong market debut on Friday after strong demand for its IPO worth up to US$501 million. Paper manufacturing is definietly not a sunset industry as many had thoughts.

 

Ya, That is a great charts, but I believe the best is yet to come...for CP!!

 

http://www.ongsmart.blogspot.com/ Solid ..well pick again, Bull Run.

 

Capacity / Utilisation (Tonnes Per Annum) FY 04 FY05 FY06 (E) Paper Products Capacity 130,000 160,000** 180,000# Paper Products Utilisation 92% 86% Wheat Pulp Capacity 50,000 100,000* 100,000 Wheat Pulp Utilisation 94% 65% Ample capacity to grow revenue and profit margin! Paper Chemical Capacity 125,000 125,000 125,000

 

SOLID RUN UP. MORE UPSIDE!!!