China Taisan Technology Group Holdings

[dydx]

Just some observations -

1. For a manufacturing company, it's ROE and operating profit margins are surprisingly high at 27.05% (ttm) and 24.59% (ttm)! Just curious how this compares with the industry average?

2. There was a placement of 30 million new shares in May 2010. Following the issue of the Placement Shares, the number of issued and paid-up ordinary shares of the Company had increased to a grand total of 957,900,000 ordinary shares.

3. The company issued another 125 million new shares in Sep 2010 for the TDR listing. Following this issue of the New Shares, the number of issued and paid-up shares of the Company is now an astounding 1,109,587,735!

Before looking at profits and ROE, perhaps it is important to also look at the level of Trade Receivable. Based on China Taisan's latest Q3-FY10 results announcement, the Trade and Other Receivables balance of Rmb365.72m is equivalent to 1.14x of Q3-FY10's Revenue of Rmb322.16m.....
http://info.sgx.com/webcoranncatth.nsf/V...8003CA9B7/$file/ChinaTaisan3Q10.pdf?openelement
It doesn't make good sense that the company should provide its customers an average trade credit of >100 days!

Quite obviously, notwithstanding the recovery in revenue and profits in the 1st 3Qs, China Taisan's issuance of a total 155.0m new shares - and its dilutive impact on EPS and earnings - has had a negative impact on its share price so far. When we compare the share price evolution in the last 12 months of China Taisan and that of Foreland Fabrictech - which has not done any share placement or TDR - it is even more obvious that Mr Market has reacted very differently for the 2 counters.....
http://finance.yahoo.com/q/bc?t=1y&s=B0I...l&c=F2X.SI