InvestIdeas

Chenming Paper drops before debut
StephanieTong; Wednesday, June 18, 2008

The mainland's largest paper maker Shandong Chenming Paper Holdings (1812) is tipped to join a growing list of IPO flops on its trading debut today.

"Unless Hong Kong stocks surge a lot, shares in Chenming are likely to plunge below its offer price by about 10 percent," said Prudential Brokerage associate director Kingston Lin King-ham.

In gray market trading yesterday, Chenming closed at HK$8.20, down 8.9 percent from its offer price of HK$9 per share. It hit a low of HK$7.94 and not once rose above the offer price. Investors holding 500 shares have already booked a paper loss of HK$400 based on the gray market close.

Not vested.

STOCK ALERT - Shandong Chenming Paper higher in HK on H1 earnings guidance

HONG KONG (XFN-ASIA) - Shandong Chenming Paper Holdings Co Ltd shares were sharply higher after the company projected up to 150 pct growth in first-half net profit.

At 10:36 am, the stock was up 0.25 hkd or 3.82 pct at 6.80, while the Hang Seng index was down 217.67 points or 0.97 pct at 22,640.93.

The mainland-based paper maker said it now expects first-half net profit to have risen by 100-150 pct year-on-year under Chinese accounting standards, upgrading an earlier forecast.

It said it revised its previous forecast of 50-100 pct growth as new production lines entered operations accompanied by higher than expected sales volume and prices in the second quarter.

In the first half of 2007, the company booked a net profit of 388.93 mln yuan under Chinese accounting standards.

Chenming Paper (1812): Relatively lower valuation
10:36

Chenming Paper (1812) is trading at a relatively lower value with its peers. It lures the buyers this morning. It jumps 16% to $5.47, with turnover of $19M.

Not vested. From Dr. Check:-

One stock you may want to evaluate is Shandong Chenming Paper (1812) whose wide range of products includes newsprint and paperboard.

It listed last June at HK$9. After that the stock fell to HK$8.25.

Chenming retreated to a record low of HK$1.93 in October before recovering to HK$6.21 last month.

It closed on Friday at HK$5.80. At a price-earnings ratio of 8.8, the stock looks attractive.

Not vested.

DJ MARKET TALK: Chenming Paper +2.0%; Profit Alert Expected-VCCEF

1230 [Dow Jones] Chenming Paper (1812.HK) +2.0% at HK$6.16, but off early high of HK$6.30; company's positive 1H10 profit alert likely largely expected following peer Samson Paper's (0731.HK) fiscal year to March results earlier this week with net profit +224.4% on-year.

Chenming expects 1H10 net profit around CNY600 million, based on China accounting standards, equal to 250%-300% on-year rise; still, that only represents around 46% of FY10 net profit forecast based on Thomson Reuters, meaning street already expecting good growth in FY10 due to lower base of comparison last year.

"The stock's recent rise (+7.1% over past week) has already reflected strong growth for the first half of the year, following strong results from its peer Samson Paper earlier this week," says Louis Tse at Value Convergence CEF. June 22 high of HK$6.48 likely a near-term cap.

Source: Dow Jones Newswire