Featured Report: Kenanga On Sino Hua-An

Posted last night: Update On Sino Hua-An

I chuckled when I see the market liking the 'losing-less-money' factor.

Who cares it is losing money? Most important it is losing less money! - lol.. does this even sound logical?

Yeah but then this is the stock markets and in the stock markets, the spin masters can make anything bad sound good. Am I right or perhaps am I flawed?

I do not know.

However, my mind is telling me to use another perspective.

Imagine this...

Picture this little girl telling her mum.

Little Girl: "Mummy, I failed my Maths but on the bright side, I got less wrong answers!"

Now do you think the Mummy should reward the little girl for getting less mistakes or should a fail be a fail?

I do not know about you but what I do know is that a fail is a fail. Which means a bloody red mark is stained on the report book!

So should one jump up for joy that a company is losing less money?

I wrote on Hua-An exactly a year ago, last August, Regarding Sino Hua-An. In that posting I was bemused and puzzled by the following issue.

• The earnings are decent no? But there is NO Growth and now earnings margins is under massive pressure.
  
  And would this be one reason why potential 'investors' or buyers would be worried about?
  
  And what about the company's product? IMHO this is also a huge concern because the past couple of months, metallurgical coke and its by-products have had one MASSIVE bull run. Prices had been extremely favourable and logical reasoning would suggest that this favourable coke prices would have boosted Huann's bottom line. But as we can see above earnings table, this coke bull run did not translate to better earnings for Huann. Would this be a concern since we have here a company whose key product is having one hell of a bull run but yet the company produces flat earnings. What does this say about the Quality of the company and the Business? Not very good yes? Do you reckon such reasoning is flawed?

It was a bull run for the metallurgical coke and its by products.

However the bull run never resulted into huge fortune for Hua-An.

And the local pros are suggesting to buy based on a recovery story? You know this makes me wonder because when times were so good last year, Hua-An earnings slumped. Now they want us to buy Sino Hua-An???

Sure boh? How Hua-An is at 0.545 sen. Who wants?

And then it so ironic.

Back exactly a year ago, I had a copy of KN Kenanga report on Sino Hua An. Price of Hua-An was also at 0.545!

Dejavu. :P

Now on the previous day back in August 2008, Hua-An reported earnings of 36.916 million and half year earnings was at 72.484 million!

And this is what Kenanga wrote in their report.

Despite calling it a BELOW expectations, Kenanga still gave it a BUY rating and a target price of 0.88 sen.

Remember Hua-An year-to-date earnings were 72.484 million.

Last night Hua-An's lost some 13.279 million and year-to-date losses were 36.911 million.

And Hua-An stock price is also 0.545. :p2

Despite losing money, Kenanga insist that the prospect is bright! (losing less money is good eh?)



Viola!

Kenanga still have a buy on Sino Hua-An but with a lower target price.

Yeah.. losing less money is good. :D

So who wants Hua-An?