Sino Grandness

NAV is about RMB$3.20 which is about S$0.66.
EPS is about RMB 4.4 cents. Which is about S$0.09 .

Let say full year EPS is about S$0.04 cents , PE is about 6.25x base on current price of 25 cents.

SINGAPORE – 15th May 2018 – Mainboard-listed Sino Grandness Food Industry Group Limited 中华食品工业集团有限公司 (“Sino Grandness” or “the Company” and together with its subsidiaries, the “Group”), a Shenzhen, China based integrated producer and distributor of own-branded juices and canned fruits and vegetables today reported its unaudited results for the first three months ended 31 March 2018 (“1Q18”)

 In 1Q18, net profit attributable to shareholders for the Group decreased 18.3% to RMB 43.1 million compared with RMB 52.8 million in the same period last year (“1Q17”). The decrease in net profit was mainly due to higher distribution and selling expenses and lower gross profit margin in 1Q18 when compared to 1Q17.

Earnings per share (“EPS”) in 1Q18 decreased to SGD 0.9 cents from SGD 1.6 cents in 1Q17 while net asset value (“NAV”) per share increased to SGD 67.5 cents as at 31 March 2018 from SGD 66.5 cents as at 31 December 2017. (EPS calculations in 1Q18 and 1Q17 based on weighted average number of ordinary shares of 979,410,000 and 691,801,000 respectively. NAV calculations based on 979,410,658 shares. Exchange rate used SGD1=RMB4.74)

 Chairman and CEO of Sino Grandness said, “I am pleased to see that demand for our own-branded products have remained strong in 1Q18, especially our beverage segment which reported double-digit growth in sales. In order to extend and diversify our product range, we have continued to invest resources to develop and launch new beverage products such as mango juice, coconut milk, apple vinegar and lactobacillus drinks. These efforts have yielded positive results as we now derive sales from a wider range of beverage products in addition to loquat juices.”

  “Our net profit in 1Q18 was impacted by lower gross profit margin and higher advertising and promotion expenses as we need to continuously invest in growing our distribution channels, brand value and brand visibility. However, we exited the quarter with a stronger balance sheet with cash and cash equivalents rising to RMB 924.0 million as at 31 March 2018 from RMB 693.6 million as at 31 December 2017 due to positive net cash generated from operating activities in 1Q18.”

The Group’s gross profit in 1Q18 increased by 6.6% to RMB 265.0 million from RMB 248.5 million in 1Q17 as a result of higher sales in 1Q18. Gross profit margin (“GPM”) for the Group in 1Q18 decreased by 2.7 percentage points to 36.4% from 39.1% in 1Q17 due to a decrease in GPM of beverage and overseas canned products segments, partially offset by an increase in GPM of domestic canned products segment. The decrease in GPM of beverage segment in 1Q18 was mainly attributable to the change in product mix and lower average selling prices for a limited range of products as a result of our price adjustment exercise to maintain market competitiveness. The increase in GPM of domestic canned products segment was mainly due to lower cost of raw materials in 1Q18 when compared to 1Q17.

Outlook

 To capitalize on the growth opportunities ahead, the Group will continue to invest in various advertising and promotional activities as well as sales and marketing initiatives in order to enhance its brand visibility and expand its online and offline distribution network.


In March 2018, the Company entered into a strategic agreement with Baixianwang Intelligent Technology (“深圳市百鲜网智能科技有限公司”) and Tomcat Culture (“深圳市 童猫文化产业有限公司”) to distribute the Company’s full range of own-branded products, including 鲜绿园 (“Garden Fresh”) beverage product, 振鹏达 (“Grandness”) canned food and 福食特 (“First”) snack food through a distribution network using intelligent technology. This include unmanned convenience stores which offers convenience and are highly visible and accessible to consumers. Barring unforeseen circumstances, the Group remains optimistic about its operating performance in FY2018.

TA wise, looks bullish!
It is on a nice reversal play after touching the low of 19 cents in 3rd April 2018.
The current price of 25 cents is staying above its SMA line which is rather positive and may likely see it re-attempt the recent high of 25.5 cents.

Breaking out of 25.5 cents with east + good volume that may drive the price higher towards 28 then 30.5 cents.

Not a call to buy or sell.

Please do your own due diligence.