KUALA LUMPUR: China-based shoe stocks on Bursa Malaysia continued their uptrend for the second day yesterday as investor sentiment improved towards the sector.
The rally follows a comprehensive three-page report by The Edge Financial Daily on Monday, highlighting the attractive valuations of all five China-based shoe companies listed here.
The Edge Financial Daily had highlighted that all five counters were trading at large discounts to book value and at price-to-earnings ratios (PERs) of around two times, based on last Friday’s closing prices. They were all in a net cash position and their earnings have grown impressively from 2006 to 2010.
Another potential re-rating catalyst, the report argued, was the recent listing of two Chinese companies in Hong Kong — China Outfitters Holdings Ltd (COH) and Active Group Holdings Ltd (AGH).
Listed in the fourth quarter of 2011, the two Hong Kong-listed stocks are trading at a PER of about three times more than their Malaysian-listed peers, which were trading at a PER of just over two times, according to Bloomberg data.
Over the last two days, all five China-based shoe stocks have chalked up total gains ranging from 3.8% to 12.5%.
K-Star Sports Ltd was the top performer, with a two-day total gain of 12.5%, followed by Maxwell International Holdings Bhd with 9.6%, XiDeLang Holdings Ltd (XDL) with 5.4%, Xingquan International Sports Holdings Ltd with 5.3% and Multisports Holdings Ltd with 3.8%.
On Monday, K-Star climbed 5.4% or 1.5 sen to close at 29.5 sen on a volume of 3.6 million shares. The stock gained another two sen or 6.8% to close at 31.5 sen with volume surging to 17.94 million shares.
The company’s book value stood at 85 sen as at Sept 30, 2011.
Maxwell gained the most on Monday, up 9.6% or four sen to close at 45.5 sen with 1.43 million shares changing hands. The stock ended unchanged yesterday with 954,100 shares traded.
Maxwell is still trading below its end-September 2011 net cash per share and book value of 48 sen and 73 sen respectively.
XDL saw its trading volume surge yesterday to 16.4 million shares from 6.18 million shares on Monday. After gaining 4% or 1.5 sen to 38.5 sen on Monday, it added another 0.5 sen or 1.3% to close at 39 sen yesterday. Its book value was 73 sen as at end-September 2011.
Xingquan, the first China-based company listed here, also enjoyed a two-day rally.
The stock closed 1.6% or 1.5 sen higher at 96.5 sen on Monday, and added another 3.5 sen or 3.6% to close at RM1 yesterday.
Trading volume increased from 902,500 shares on Monday to 1.6 million shares yesterday. Its book value was RM1.69 as at end-Sept ember last year.
Multisports Holdings Ltd had climbed 1.3% or 0.5 sen to close at 40.5 sen on a volume of 656,000 on Monday.
Yesterday, the stock added another one sen or 2.5% to close at 41.5 sen, with volume increasing to five million shares.
Multisports’ book value stood at 85 sen at end-September 2011.
This article appeared in The Edge Financial Daily, February 15, 2012.
The rally follows a comprehensive three-page report by The Edge Financial Daily on Monday, highlighting the attractive valuations of all five China-based shoe companies listed here.
The Edge Financial Daily had highlighted that all five counters were trading at large discounts to book value and at price-to-earnings ratios (PERs) of around two times, based on last Friday’s closing prices. They were all in a net cash position and their earnings have grown impressively from 2006 to 2010.
Another potential re-rating catalyst, the report argued, was the recent listing of two Chinese companies in Hong Kong — China Outfitters Holdings Ltd (COH) and Active Group Holdings Ltd (AGH).
Listed in the fourth quarter of 2011, the two Hong Kong-listed stocks are trading at a PER of about three times more than their Malaysian-listed peers, which were trading at a PER of just over two times, according to Bloomberg data.
Over the last two days, all five China-based shoe stocks have chalked up total gains ranging from 3.8% to 12.5%.
K-Star Sports Ltd was the top performer, with a two-day total gain of 12.5%, followed by Maxwell International Holdings Bhd with 9.6%, XiDeLang Holdings Ltd (XDL) with 5.4%, Xingquan International Sports Holdings Ltd with 5.3% and Multisports Holdings Ltd with 3.8%.
On Monday, K-Star climbed 5.4% or 1.5 sen to close at 29.5 sen on a volume of 3.6 million shares. The stock gained another two sen or 6.8% to close at 31.5 sen with volume surging to 17.94 million shares.
The company’s book value stood at 85 sen as at Sept 30, 2011.
Maxwell gained the most on Monday, up 9.6% or four sen to close at 45.5 sen with 1.43 million shares changing hands. The stock ended unchanged yesterday with 954,100 shares traded.
Maxwell is still trading below its end-September 2011 net cash per share and book value of 48 sen and 73 sen respectively.
XDL saw its trading volume surge yesterday to 16.4 million shares from 6.18 million shares on Monday. After gaining 4% or 1.5 sen to 38.5 sen on Monday, it added another 0.5 sen or 1.3% to close at 39 sen yesterday. Its book value was 73 sen as at end-September 2011.
Xingquan, the first China-based company listed here, also enjoyed a two-day rally.
The stock closed 1.6% or 1.5 sen higher at 96.5 sen on Monday, and added another 3.5 sen or 3.6% to close at RM1 yesterday.
Trading volume increased from 902,500 shares on Monday to 1.6 million shares yesterday. Its book value was RM1.69 as at end-Sept ember last year.
Multisports Holdings Ltd had climbed 1.3% or 0.5 sen to close at 40.5 sen on a volume of 656,000 on Monday.
Yesterday, the stock added another one sen or 2.5% to close at 41.5 sen, with volume increasing to five million shares.
Multisports’ book value stood at 85 sen at end-September 2011.
This article appeared in The Edge Financial Daily, February 15, 2012.
