mysyu 2006-12-15 00:02
2600
It is a great opportunity to buy 2600 yesterday, when it resumed trading and the price fell to below $6.1, not from hindsight, but on the following grounds:
1. When the stock was suspended from trading, it was priced at $6.25. During the period the China Enterprises Index has risen a lot. The price of 2600 was fallen behind, compared with other resources stocks like 358 and 347. There is potential for it to rise 5-10% in the coming two weeks, unless there is a dratic upturn in the market.
2. As the stock has been suspended from trading for weeks, people who wished to sell the stock to get cash will do so as soon as it resumed trading yesterday, at whatever cost. This is particularly so if those people have bought it at a lower cost. That is why 2600 fell quite deeply yesterday.
3. The price of 2600 could not rise as high as the other resources stocls in the past months because people took into account the repeated drop in the price of aluminium products. I read however from an article (forgot where) that 2600 deliberately lowered the price of aluminium products in order to curb the stock price at a lower level. This would make its privatisation of its subsidiaries less costly. Now that the consolidation is completed and over. Such risk is now cleared.
Can we buy 2600 now? Yes, for the following reasons:
1. the price of 2600 has fallen comparatively behind. It will soon catch up. Its P/E is still at a reasonable level.
2. the company has made steady growth in its annual profits, and it is expected that such growth will continue.
3. the demand for aluminium products in China remains strong.
4. there is no sign of drastic drop in the aluminium price wordwide.
5. Tony Mason (who I reswpect as a very stable investor) in his column in the Next Magazine also commented that the price of 2600 is low and reasonable and recommended buying it.
I have to declare that I have at present only 20,000 shares of 2600. I should have bought more of it yesterday had I not commited all my money to placing new IPOs.
2600 has gone up to $6.30 today. Let's see how it performed in the coming week!!
Sorry I have to post this in English as my Chinese typewriting is poor.
skywide 2006-12-15 02:32
Seems that you have made the right choice! Is there any other 'good' stock you would like to recommend to us? :victory:
mysyu 2006-12-15 10:24
[quote]原帖由 [i]skywide[/i] 於 2006-12-15 02:32 AM 發表
Seems that you have made the right choice! Is there any other 'good' stock you would like to recommend to us? :victory: [/quote]
Based on past profit turnout and P/E ratio, and business trend, I would like to invest more on 358 Jiangxi Copper. The demand for copper is still strong in China, and the world copper price is beginning to rise.