|DUKANG DISTILLERS managed to make RMB 1 million profit in Q2 2016 (ended 31 Dec 2015) from improved revenue and gross profits.
Its YTD 6 months results were at almost breakeven, with a small profit of RMB 232,000.
What is interesting is that after its share consolidation of 10 shares to 1 share in Nov 2015, its theoretical ex-consolidation price which should be S$1.00, now has declined to S$0.68.
Its NAV per share based on its current equity and consolidated number of shares of about 79.8 million is S$3.82.
The share price is now trading at 82 percent discount to its NAV!
Any private equity firm should be able to take over the company with S$55 million cash plus an attractive premium offer to all shareholders.
But not many know how to run Dukang's unique business in China. And the assumption is that its balance sheet numbers are fairly presented and reliable.
If the company manages to make consistent profits and pay dividends, this stock may be a value buy.
Prior to his retirement, Chan Kit Whye (left) worked more than 30 years as Regional Finance Director, Financial Controller and Manager in a multinational specialty chemical business. He has played an active role in CPA (Australia) Singapore Branch, taking up positions in its Continuing Professional Development and Social Committees. Kit Whye is a Fellow of CPA Australia, CA of Institute of Singapore Chartered Accountants and CA of the Malaysian Institute of Accountants. He holds a BBus(Transport) Degree from RMIT, MAcc Degree from Charles Sturt University and MBA from Durham Business School.