Xidelang Holdings Ltd (+ve)

SHARE price of Xidelang (Fundamental: 1.3/3, Valuation: 1.5/3) attempted a rebound last week but fell 7% to 13.5 sen yesterday. This came after its major shareholder cum managing director disposed 138 million shares or 10.5% equity interest on the open market at 13 sen per share last Thursday.

Earlier in May 2015, the China-based sports apparels manufacturer proposed a 1-for-3 bonus warrant issue, which went “ex” yesterday. 

For 1Q2015, net profit slumped 71% y-o-y to CNY 4.0 million, representing the fifth consecutive y-o-y fall in quarterly profit. Revenue saw a 16% decline to CNY 102.5 million, primarily due to lower sales volume and intensifying competition from foreign brands.

Xidelang has a net cash position of CNY 526 million (equivalent to RM321 million), 1.5 times its market capitalisation of RM205 million. However, no dividend was paid for 2013-2014.

Xidelang trades at a trailing 12-month P/E of 8.5 times and 72% below book value.

This article first appeared in The Edge Financial Daily, on April 27, 2015.