China XLX: Trading within a Falling Wedge

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China XLX is currently trading within a Falling Wedge.  Base on chart pattern, current price is closed to wedge resistance. Unless there is a breakout, the price will probably drop in the next one to two months. However, current China XLX PE is about 20 which is over value and also much higher than average PE of 8 in 2007 and 2008. This high PE presents a very unlikely scenario of breaking out from the falling wedge and start a bullish trend.

Fundamentally base on financial report, this company not really fantastic. The following financial ratio is nothing to be proud about.

Base on FY2009 Financial Result:

  • Net Profit Margin = 5.1%
  • ROA = 4%
  • ROE =  8%
  • Current Ratio = 1.04
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