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Longcheer, will it move on the acquisition and disposal news?

For the first half of 2014, although STI moved up, it is much weaker than US market which continued the strength of 2013 and made many times of new all time high again and again. Many may noted that a big portion of the opportunities in Singapore stock market for the first 2 quarter lays in two categories: either acquisitions and disposals or properties and REITS or both. Recently, the uptrend of properties seems weaken already, but stocks with acquisition and disposal news are still active in the market and hopefully may main as market darling for the next a few month

Longcheer is a stock that has acquisition and disposal news and has not move much yet. Recently it released a news that one of its subsidiaries may be deposited to another company for RMB 240M. As the net asset of Longcheer is only RMB 670M, means it will get back 35% of its net asset from this deal. It is likely to make profit from this potential transaction. Besides, according to the recent quarterly statement released on 12 May, the NAV of Longcheer is RMB 1.89/share, which is almost S$ 0.38 but the share is trading below 0.3 now. It seems that the current price is at a 25% discount and makes it a relatively safe investment. In addition, the report also shows that the net profit for the past 3 quarter increased 70% as compared to the previous financial year, indicating that the upcoming full year statement is likely to report an increase in annual profit growth for at least 40-50%. The potential good result makes the investment even safer. From technical perspective, Longcheer is in a long term uptrend and investors may also consider buy on weakness during pull back to ride the uptrend with relatively low risk. In conclusion, both fundamental and technical perspectives shows that Longcheer got a good potential with low risk at current price level and investors may consider accumulate in the value zone when the acquisition and disposal news yet to push up the stock to higher level.

Robin Han
Robin Han

Dr. Robin Han, a graduated from NUS with a Ph.D in Department of Chemical and Biomolecular Engineering, has been actively trading in Singapore stock market since 2007. His passion has let Dr. Robin to become a full time trader since 2010. He has extensively share his experience with his fellow investors on trading Singapore stock market using both technical analysis and fundamental analysis.

Dr. Robin is a regular guest speaker for radio 95.8 on financial program. He also has been invited by different companies and societies to conduct educational seminars on stock investments, including Shares Investment, Wealth Directions (Founder: Dennis Ng), Traders Round Table, SIM, Raffles Business International, Online trader's club and Alpha Alliance. He is also contracted by N2N (a listed trading software provider in Malaysia) as their overseas educational speaker in stocks.