Chen Hsong [57] announced its annual results for the year ended 31st March, 2000. The net profit amounted to $54.1 million, down 27.0%. Earnings per share were HK$0.0888 and a final dividend of 2 cents was declared per share.
CSC Research Comment:The net results are below our expectations. However, the decline in profitability is primarily due to the inclusions of two non-recurring items. The two items are the HK$46 million full provision for diminution in value of a long-term investment in a Taiwan company, and the HK$11 million loss on disposal of a factory building resulting from the relocation of production to mainland China. Excluding non-recurring items, net profit after tax but before minority interests has increased by 40%. The recent consolidation has provided investors a golden opportunity to accumulate this quality industrial stock. ACCUMULATE at below HK$1.35.
CSC Research Comment:The net results are below our expectations. However, the decline in profitability is primarily due to the inclusions of two non-recurring items. The two items are the HK$46 million full provision for diminution in value of a long-term investment in a Taiwan company, and the HK$11 million loss on disposal of a factory building resulting from the relocation of production to mainland China. Excluding non-recurring items, net profit after tax but before minority interests has increased by 40%. The recent consolidation has provided investors a golden opportunity to accumulate this quality industrial stock. ACCUMULATE at below HK$1.35.
