CHINA ANIMAL HEALTHCARE didn’t quite roar today on its dual-listing debut on the stock exchange of Hong Kong, ending down 2 cents, or 5.1%, at 37.5 cents in Singapore, the lowest for the day. Highest: 41 cents.
In Hong Kong, the stock closed at HK$2.36, or about 40 Singapore cents.
About two weeks earlier, Kevin Scully, the executive chairman of NRA Capital, in yet another accurate call, had raised the possibility of a dismal showing.
On Dec 9, on his blog, he had noted:
i) Midas Holding had traded down since its dual listing in HK on Oct 6.
ii) Stretched valuations - China Animal Healthcare has to deliver at least 50% earnings growth in 2011 to achieve prospective PER of 13 to 15 times, which in the first place is not exactly chip for a S-chip.
iii) At 40 cents, the stock is just 5% from his price target of 42 cents.
“Investors should take some profit on the way up at S$0.40 and above,” he had advised.
“I am therefore removing China Animal from my Stock Picks more because its share have risen 48% since we included it in the portfolio but because the upside is probably about 20% in an optimistic scenario and 5% based on my conservative scenario.”
However, brokers have higher targets for the stock, ranging from S$0.48 to S$0.52.
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