Cacola Furniture

[learn2win]

Using the technical point of view, Cacola achieved a gap after the result announcement on Tuesday. Closed @ 33 cents and opened @ 34 cents yesterday. With it closing @ day high of 36.5 cents, it might just be another Mercator in the making. Mercator gallop up close to 20 cents after its recent result announcement and a gap that is similar to Cacola.

[bertyeo]

indeed a traditional break-away gap.....

anyway sgx just announced that its stores in chengdu not affected by earthquake...and plans to open chongqing megastore still in place..

[learn2win]

Announcement Title * EARTHQUAKE IN SICHUAN PROVINCE

Description
In response to the reports on a powerful 7.8-magnitude Earthquake that hit Sichuan Province on Monday, 12 May 2008, the Board of Directors of Cacola Furniture International Limited (the “Company”) would like to provide an update on the status of its operations in Sichuan Province.

The Group’s 7 licensee stores which are located within the affected areas (mostly in Chengdu) are not affected by the earthquake. Most of these stores are operating business as usual.

The Company’s plan in opening a new mega store in Chongqing in 3Q2008, is not expected to be affected by the earthquake.


Note:

The initial public offer of the Company's shares was sponsored by Boulton Capital Asia Pte. Limited (the “Issue Manager"). The Issue Manager assumes no responsibility for the contents of this announcement.

[winston]

Not vested. From OCBC:-

Cacola Furniture International Ltd: Continued to impress in 1Q08

Impressive 1Q08 results supported by broad-based growth. Cacola Furniture International Ltd (Cacola) continued to impress with its 1Q08 results. Revenue rose 37.8% YoY to RMB188.5m, while net profit surged 71.7% YoY to RMB44.9m. The group’s strong showing was supported by broad-based growth across all its segments.

Its sofa segment posted the strongest growth, recording a 50.0% YoY increase in revenue, followed by the mattress segment, which posted a 35.0% growth, and then the panel furniture segment with growth of 33.4%. The group attributed its growth to firm demand for its products both domestically and overseas. Sales in the PRC swelled by 36.1% YoY, while export sales grew 45.8%.

Margin improvement in 1Q08 set to extend into 2H08. Despite global inflationary pressures and rising raw material costs, Cacola managed to sustain its gross profit margin at 33.8% (+0.6ppt YoY; -0.6ppt QoQ) thanks to its ability to pass rising costs to its buyers. Its net profit margin improved to 23.8% (+4.7ppt YoY; +4.6ppt QoQ) due to tax holidays. We are confidentthat Cacola will be able to sustain its gross profit margin at around 33% thanks to its cost-plus pricing model. In addition, management expects the group’s overall margins to improve in 2H08 when it introduces new products with higher gross profit margins.

Unshaken by the quake. Quelling fears over the recent Sichuan earthquake’s impact on its business, Cacola clarified that it has not been adversely affected by the quake. It maintains that it has been business as usual at all its stores, including the 7 stores in Chengdu. As for its upcoming mega store in Chongqing, works are still underway and unaffected by the
quake. Management is confident of launching the mega store in July as scheduled.

Unstoppable growth. Even without getting a push from its enlarged capacity and new mega store, Cacola’s 1Q08 earnings has already met 28% of our FY08 estimate. We are expecting 2H08 to be even stronger, supported by its capacity expansion, which will raise the sofa and mattress segments’ output by 84% and 105%, respectively by 2Q08, and the launch
of its mega store in Chongqing in July, which is expected to drive sales and reap higher profit margins. Nevertheless, we have decided to retain a conservative stance and are keeping our estimates intact.

We maintain our BUY rating on Cacola, and our fair value remains at S$0.75, pegged at an undemanding 8x FY08 PER. (Lee Wen Ching)

[learn2win]

Way to go Cacola.

vested.

[bertyeo]

chartwise, 20ma crossover and stayed above 50 ma.
45-48 is 1st line resistance

[bertyeo]

man wah and cacola moved together leh

[Blackjack]

Does Cacola have a good branding in China? I realised there are a lot of furniture companies in China, though they may not be listed. In terms of size, I don't think they are that prominent as well. This must be one industry with really low barriers of entry. Depending on how their IKEA megastore strategy turns out, this may or may not be a potential growth engine in future.

[qxing78]

At $0.31, PE of only 4.4 times, the market is not pricing in a high valuation or expect high growth rates.
For short term trade, fundamentally speaking, it is quite low.
But then, it is not a leader stock, by the time, its 'queue' no. is called, the US mkt may have gone thru ano. correction.
However, 29~31c looks quite ok for med term investor, provided there is at least 10~15% growth

[Winterflame]

As their 70% of their revenue come from China itself, they are not affected by U.S downturn much, also, their sichuan mega store was unaffected by the earthquake and was open on July, the revenue from there should add to the profit