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China Minzhong: Emerging from a down trend.

Saturday, September 15, 2012

The last time I blogged about China Minzhong, I said that the longer term downtrend was still intact. Has this changed? Yes, it broke out of this downtrend middle of August and briefly went under the trend line in early September.



Both MACD and MFI have formed higher lows. Breaking the down trend with stronger positive momentum is good news for the bulls. Now, all eyes would be on 78.5c, the recent high of 23 August as well as the declining 200d MA at 80c. If price action is able to break these resistance levels and move higher, we could see a move to test a band of resistance between 88c to 94c.



In case of further weakness, I see support at 66c, provided by the 50d MA. Stronger support is at 63c, the top of a 5 months base formation (March to August 2012). I would be accumulating on weakness.

------------------------

We expect higher operating cash flow and less Capex in FY13, thus the first positive free cash flow in three years. We cannot rule out the possibility that Minzhong will pay dividends or buy back shares in FY13. Although we have not put in any dividends payments or share buyback forecast as our base case, we believe such actions will boost the valuation if they eventuate. (Kim Eng, 28 August 2012)

Related post:
China Minzhong: Pushing higher.

5 comments:

Xiu Hui said...

there seems to be alot of sell down..

11:20:15 0.740 2,000 Sell Down
11:19:42 0.745 11,000 Buy Up
11:19:35 0.740 15,000 Sell Down
11:19:35 0.740 13,000 Sell Down
11:19:35 0.740 20,000 Sell Down
11:19:35 0.740 2,000 Sell Down
11:08:30 0.745 40,000 Buy Up
11:05:31 0.745 3,000 Sell Down
11:05:31 0.745 8,000 Buy Up
11:05:31 0.745 8,000 Sell Down
11:05:31 0.745 10,000 Sell Down
11:04:41 0.745 2,000 Sell Down
11:04:41 0.745 8,000 Sell Down
11:04:41 0.745 2,000 Sell Down
11:04:25 0.745 3,000 Sell Down
11:04:25 0.745 10,000 Sell Down
11:04:25 0.745 17,000 Sell Down
11:03:43 0.745 13,000 Sell Down
11:03:43 0.745 5,000 Sell Down
11:03:43 0.745 13,000 Sell Down

AK71 said...

Hi Xiu Hui,

Some people are locking in gains, I guess. :)

JCK said...

On the move again!

:)

AK71 said...

Hi JCK,

Nice! :)

AK71 said...

Investors may be rushing into Chinese upstream food companies, such as China Minzhong, Sino Grandness and People’s Food, due to concerns over China’s food inflation, Maybank-Kim Eng says.

Minzhong is a direct beneficiary of the recent rise in China’s fresh vegetable prices, up 24% on-year in August, it says. Minzhong gets 38% of its revenue from cultivation, mainly serving the domestic market, and directly benefiting from vegetable price surges, while 62% of revenue is from the mid-stream processing business, with the company able to pass part of the cost pressure to downstream customers, it says.


Kim Eng, 19 Sep 2012.

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