Not vested
Key Risks
· Foreign exchange risk – The bulk of sales are denominated in Singapore dollars, ringgit and Hong Kong dollars, while raw material purchases are made in renminbi.
· Raw material price appreciation – We believe EYS will face greater difficulty in passing on cost increases for its manufactured products compared to its wholesale products, as the latter is driven by market pricing.
· Regulatory risks – EYS’s TCM products require an extensive regulatory approval process of a few years. Any regulatory changes could affect EYS negatively.
Valuation
· EYS is currently trading at a consensus FY11F PE of 15.2x.
Source: UOBKH