China Zaino – Fundamental & Intrinsic Value

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Base on Q2, 2009 financial report:

  • PE = 3.5
  • Dividend Yield = 5.8%
  • NAV = $0.288
  • Net Earning = 15.6% (18.3% in 2008)
  • Current Ratio = 5.7
  • ROA = 31.7% (Base on 2008 Full Year)
  • ROE = 36.3% (base on 2008 Full Year)
  • Cash Flow = S$199.8 Million (27% increase with reference to 2008 Full Year)

  Stock Background

  • 3 years historal high = $0.615
  • Current Price = $0.30 (only 49% of 3 years high)
 

Intrinsic Value Calculation

PE Model

  • Fair value PE = 15, intrinsic value= $1.23 (base on EPS $0.08185)
  • PEG = 0.24 (it looks like super under value!)

DCF Model

  • Growth Rate = 15% (capped)
  • Discount Rate = 5%
  • Number of Shares = 945 million
  • 2008A Net Operating Cash Flow = S$55.893 million, intrinsic value = $1.01

Discounted EPS Model

  • Growth Rate = 15% (capped)
  • Discount Rate = 5%
  • 2009F EPS = $0.08185
  • Intrinsic Value = $1.40

Intrinsic Value for China Zaino (the most conservative number of the three numbers) = $1.01 (Current price is 70% discount to the intrinsic value!)

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China Zaino – another S-chip stock is swinging in the channel!

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Spotted another S-chip stock China Zaino besides Synear and China Hongxing. The patterns for these three stocks are very similar (had breakout and swing inside the up trend channel). China Zaino’s fundamental is pretty solid and can be kept as value investment. My strategy for this stock is to buy some for long term investment and some for short term momentum investment. Target entry point is $0.28 and exit point is $0.335 (about 20% profit target).  Next strong support is $0.27 (61.8% Finonacci Retracement level).
Continue ReadingChina Zaino – another S-chip stock is swinging in the channel!