by andyc » Tue Sep 16, 2008 10:14 am
Was jus browsing when I chanced upon this thread. Hope you guys dun mind...
Seriously, which company is not hit by rising CGS and soaring expenditures? By focusing on this, we are missing the whole picture: Turnover has been up 137% to Rmb271.7 million and gross margin is still double-digit at 21%.
Recently, Youcan has annouced a mandatory acquisition of their factory premises at Hangzhou. It is reported that Youcan will move to a newer and bigger premise. This is in line with the company's long-term plan. This counter is interesting for a couple of reasons:
- It is tapping into China's consumption (as the Chinese gets more affluent, they are moving away from traditional starch-based tit bits/food items and into milk and milk-based products). Potential is tremendous!
- There is direction (You know that they will grow their ice-cream business. Frozen food is just a 'tag along' because when consumption of ice-cream falls during the winter months, the freezers, cold rooms, etc. can be used for frozen food (dumplings) as well.
The only down 'down point' is the lack of trading interest. Basically, their 'anchors' are strategic investors not interested buying and selling. This has resulted in a lack of liquidity and marketability. Maybe something should be done to address this issue...