23 January 2013

Sino Grandness - 1 of My Favorites - Updated November 2013

Sino Grandness, one of my favorites in Singapore stock market. The price is quite volatile, that is why I do not think it is suitable to every investor. It is suitable to those who has big risk appetite (e.g. can stand for huge volatility), as this company is a young company.

Background: The CEO, 黄总 was one of the senior management in GLC handling export matters. So he is quite experience in managing talents who are experienced in this export industry. His ambition is to have a brand same as 王老吉,a famous herbal tea brand in China as well as in Asia region.

Anyway, for last 1 year I have been keep tracking his company report. His plan is to get his fruit drinks arm listed in the Hong Kong Exchange. Why HKEx and not SGX? I believe Hong Kong is a better place, and you could get higher valuation price there as compared to Singapore. Why? Mainly due to the reasons most of the Singapore investors do not have the capability fly over to China mainland to check the operations there.

Why am I saying that it is a high risk counter?

  1. The company is in the expansion stage. A lot of CAPEX needed, and the company has to obey / fulfill some debt covenant to make sure the debt rating is in control. 
  2. With fund manager / Private Equity Manager on board of director for its fruit juice division, I believe the senior management will work harder with them to ensure they can meet the target to get listed in Hong Kong. It is still very uncertain whether Sino Grandness can fulfill the internal target set by Fund Managers to get listed in Hong Kong. Anyway, I do see it is on track. Corporate Finance is the main topic to be concerned with. 
  3. This is a S-Chip. S-Chip have bad records in quality of financial report as well as not able to perform well in later years. That is why many investors in Singapore tend to ignore S-Chip counters, although I do believe there are some good counters there. 
The price is currently at rocket high. I believe the room of improvement is getting smaller. So if you still want to bet, it's either you bet on its possibility to get its fruit drinks arm listed, or you bet its canned fruits division can grow faster. 

Ya, it is in a transformation stage. And I hope 黄总 is an integrity person. No doubt, he is a capable person who can grow Sino Grandness to another level. Let's wait and see if its fruit drink division can get listed in Hong Kong later years or not. 

Disclaimer: Buy on your own risk. Above post is not made for any recommendation or comment, and is just purely my opinion. It cannot be used as fact.

Update -  November 2013:

Sino Grandness in-house beverage brand Garden Fresh has been valued at RMB 3.5 Billion or S$714 M according to Brand Value Data Certificate issued by Asia Brand Association Experts Committee and Asia Brand Research Centre.  The Brand Valuation Exercise was jointly organized by Global Times, Asia Brand Association, National Development and Reform Commission as well as China Economic Herald. It validates the growing significance of intangibles for companies operating with branded business divisions such as Sino Grandness. The latest quarter result will be released on 14 November 2013, which I believe should be a better relative performance.

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