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Wednesday, July 3, 2013

Old Chang Kee: Almost 70c a share.

On 30 May, I mentioned that Old Chang Kee's shares at 56c a piece were not expensive and that with a PER of 11.29x, I thought Old Chang Kee fairly valued.

 Today, Old Chang Kee's shares hit a high of 69c before closing at 67.5c. It is now 20.5% higher than where it was on 30 May and 160% higher than my entry price.

 At 69c, PER is 13.9x. This does not sound cheap to me. However, chatting with someone who is vested in Breadtalk recently led me to wonder if I have been too conservative in my valuation of Old Chang Kee's stock.

 Breadtalk's full year EPS in 2012 was 4.263c. At 90c a share, its PER is more than 21x! Even though its EPS improved some 14.8% in 1Q 2013, annualised, we could still be looking at a PER of more than 18x. If we were to compare with Breadtalk, Old Chang Kee seems relatively cheap.

Assuming that Old Chang Kee's EPS stagnates, to reach a PER of 18x, its stock would have to trade at 89c per share. Is that going to happen? Your guess is as good as mine.

Related post:
Old Chang Kee: More free curry puffs on the way.

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9 comments:

  1. UnknownJuly 3, 2013 at 10:39 PM

    Just collect curry puffs

    ReplyDelete
  2. AK71July 3, 2013 at 10:41 PM

    Hi Matthew,

    Sounds like a plan. ;)

    ReplyDelete
  3. AK71July 4, 2013 at 11:26 AM

    I kind of suspected that the recent price movement could be due to a takeover bid in the making.

    The Board of Directors of Old Chang Kee Ltd. wishes to inform shareholders that the controlling shareholder of the Company has informed the Company that he and his associate have expressed an interest to enter into a possible transaction involving the shares of the Company, which may or may not lead to an offer being made for the Company by a third party.

    Source:
    http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_26522FC73D70618248257B9E0000957E/$file/Ann_on_possible_transaction_FINAL_4Jul2013.pdf?openelement

    ReplyDelete
  4. Tien Song ChuanJuly 4, 2013 at 11:27 AM

    This is a bull market. Everything also go up.

    ReplyDelete
  5. AK71July 4, 2013 at 11:34 AM

    Hi Tien,

    I was under the impression that it was a sea of red yesterday but thanks for the poke. :)

    ReplyDelete
  6. seefeiJuly 4, 2013 at 6:15 PM

    someone is buying up/ or investing in F&B relater company

    F&N, CMZ, OCK, breadtalk etc....

    good spot on OCK despite it in catalist...

    ReplyDelete
  7. AK71July 4, 2013 at 7:00 PM

    Hi seefei,

    Just lucky, I guess. :)

    If its share price goes much higher, it could be time to part with free curry puffs.

    ReplyDelete
  8. SnOOpy168July 4, 2013 at 7:14 PM

    AK have that golden touch, every counter also huat, whereas mine is always stagnate. :-(

    ReplyDelete
  9. AK71July 4, 2013 at 7:22 PM

    Hi SnOOpy168,

    Not every counter, remember Wilmar? Well, at least the color of palm oil is golden. -.-"

    So, I have been lucky. That's all. ;p

    ReplyDelete