Chen Hsong Holdings 0057

[winston]

Not vested

Gems remain as concerns over rising wages on the coast overblown
Friday, September 03, 2010

The rise of factory workers' salaries in China's coastal provinces has raised concern that many international manufacturers will relocate to lower-cost countries such as Indonesia, Vietnam and Cambodia.

But as China has built an efficient transport network, and its massive population provides a good market for consumer goods, multinational firms would like to maintain their exposure there. These companies will be able to absorb the relative small labor cost increase.

But a labor shortage will intensify in parts of China, especially when many find jobs nearer their hometowns as factories move inland.

With these factors in mind, I recommend Chen Hsong Holdings (0057). The 50-year-old company which makes plastic injection moulding machines is expecting more orders from its top clients.

They include Foxconn (2038), TPV Technology (0903) and VTech (0303).

Chen Hsong's net profit rose 78.9 percent to HK$154 million for the year year ended March.

Standard Chartered Securities targets it at HK$4.25. Closing yesterday at HK$2.90, Chen Hsong now looks like a good buy.


http://www.thestandard.com.hk/news_deta ... 00903&fc=8

[winston]

Not vested. From Dr. Check, The Standard HK:-

In September, I said the average monthly salary of factory workers in mainland coastal areas had soared 300 percent in the past 15 years.

So factories will certainly buy more machinery to cut costs.

I had recommended Chen Hsong Holdings (0057) as I believed its earnings would recover to the 2007 level, when it made HK$300 million.

The stock has jumped 30 percent in the past three months, not affected by the slump in the general market.

[winston]

Not vested. From Dr. Check, The Standard HK:-

Many quality picks have recovered sharply in the past few days.

However, laggards such as Chen Hsong Holdings (0057) remain my favorites.

Last June, the stock hovered around HK$3. Yesterday, it closed at HK$3.99, up more than 30 percent.

From June to now, the Hang Seng Index has risen only 10 percent. The maker of plastic injection molding machines is set to benefit as firms throughout China buy more equipment to cut down on rising labor costs.

Electronics goods makers such as Foxconn (2038), TPV Technology (903) and VTech (303) are Chen Hsong's top clients.

By the end of this month, its manufacturing capacity will rise to levels similar to where they were before the onset of the 2008 global financial crisis.

The firm will reveal its annual results in July when its price-earnings ratio is tipped to fall to single digits. The stock is currently down 18 percent from its peak. So I think it is a bargain.

[winston]

True grit can mean big rewards
Thursday, June 23, 2011

There may be no need to dump a stock to cut losses even when it tumbles.

Look at machine tool maker Chen Hsong (0057). It revealed yesterday that net profit for the year to March 31 soared 124 percent to HK$343 million from the previous 12 months, and the stock now trades at 6.8 times historical earnings with a dividend yield of 7.3 percent.

Chen Hsong shares had fallen from HK$4.69 in April to HK$3.30 on Tuesday. Yesterday, however, they rose to HK$3.76.

Schroders, the UK investment house, has a 7.35 percent stake in the firm, having bought at HK$3.05 per share.

So if you are an existing shareholder I would urge you to hold on to it.

http://www.thestandard.com.hk/news_deta ... 10623&fc=7