Bawang International 1338

[winston]

Not vested but I'm still using Bawang Shampoo ..

DJ MARKET TALK: Bawang Down 2.5%; But Sales Recover Gradually-UBS

1152 [Dow Jones] Bawang International (1338.HK) down 2.5% at HK$3.07, extending yesterday's 6.0% loss after company issued profit warning yesterday, with company expecting to post "substantial decline" in 2010 results after Next Magazine reported in July that some of Bawang's shampoos had unsafe levels of dioxane, which may cause cancer.

But UBS says "sales are recovering gradually, compared to our channel checks immediately after the incident, which had indicated a sales decline of 60%-90%"; suggests investors accumulate on share price weakness.

Notes Bawang allocated larger budget for marketing in 2H10, management expects marketing intensity to be maintained in 1H11. Keeps stock at Buy, HK$4.00 target.


Source: Dow Jones Newswire

[gizmo_toh]

So just to check at price of hk3.12 is it ok to buy now?

[winston]

Not vested

DJ MARKET TALK: Bawang Set To Fall On FY10 Profit Warning

0850 [Dow Jones] Despite its shares having fallen 59% from a 52-week high of HK$6.55 (set April 16, 2010), Bawang International (1338.HK) is set to fall today on the announcement that it "may record a loss" for 2010 due to lower sales and additional marketing costs aimed at restoring consumer confidence on product safety.

This is a negative surprise given a Thomson Reuters survey of six analysts tip a FY10 net profit of CNY201.8 million. The Chinese herbal shampoo maker says in its announcement that its revenue from July to December is estimated to have fallen 48% on year due to product safety questions.

The stock was flat at HK$2.68 Friday; the 52-week low of HK$2.40 hit January 17 is likely to be tested again.


Source: Dow Jones Newswire

[oldwilly]

Is it possible for P&G to acquire Bawang Group? Bawang's share price has taken a big hit since the cancer report and is now even below its IPO price. P&G could derive some synergy particularly in the China market with a buyout. What do you think?

[winston]

Hi oldwilly,

Welcome to investideas !

It's a possibly but it really depends on whether the current owners want to sell at such a low price.

In addition, any acquisition needs regulatory approval and that's a big hassle. Just look at the Huiyuan deal...

Take care,
Winston

[oldwilly]

Ad killer Jackie Chan's excellent report card: Endorse Subor (小霸王), Sudor goes out of business; endorse Aiduo VCD player (爱多VCD), the CEO goes to jail; endorse Fenhuang cola (汾湟可乐), Fenhuang cola disappears; endorse Caddy cars (开迪汽车), Caddy cars only sell 900 around the country; endorse Bawang shampoo (霸王洗发水), its exposed to contain a cancer-causing agent. Today, have you had your product endorsed by Jackie Chan?

[winston]

Hmmmm.... Jackie Chan also endorsed those dumplings from Synear, that's listed in Spore. And those dumpling shares has been in the "dumps".

[winston]

Not vested

DJ MARKET TALK: BaWang Down 4.5%; Earnings Visibility Low - KE

1129 [Dow Jones] BaWang International (1338.HK) falls 4.5% to HK$2.11, but may not
re-test its 52-week low of HK$1.98 set on February 17, with today's low at HK$2.04.

The shampoo maker expects to post a FY10 loss of up to CNY130 million because of a "substantial decline" in sales of shampoo products. Still, its poor FY10 results are well flagged given an expected sales decline and additional marketing costs following a HK media report in July that said some of BaWang's shampoo products contained unsafe levels of a cancer-causing chemical.

Kim Eng doesn't expect the market to react much to this announcement given the company has made a profit warning previously; it suggests investors to avoid the counter "until we see more earnings visibility."

The house adds Vinda (3331.HK) remains its top pick in the household and personal care sector, given its undemanding valuation and strong earnings growth prospects.

Source: Dow Jones Newswire

[winston]

Not vested. But I'm still using their shampoo ...

DJ MARKET TALK: Bawang Off 0.8%; Sales Recovery Lackluster - MS

1434 [Dow Jones] Bawang (1338.HK) is down 0.8% at HK$2.37, adding to its 0.4% fall Monday after the company announced its results, showing a net loss in FY10 from FY09 profits.

"As sales recovery of the core Bawang and Royal Wind brand (90% of 2010 sales) appears lackluster, we feel it could take longer for consumer confidence to come back and for Bawang to regain market share from other brands," says Morgan Stanley.

While Bawang could be a recovery play with its healthy balance sheet, the house prefers to stay on the sidelines until there's more visibility or evidence of stabilization in sales. It keeps the stock rated Underweight with a target of HK$2.10.


Source: Dow Jones Newswire

[winston]

Not vested

Why did this counter soared 8% today ?

No news on HKSE website.

Short-Covering ?