Xinquan

Listed in July 2009. Classified as M-Chips by borrowing reference name from S-Chips (referring to China Companies listed in SGX). These small to mid size (by China definition) China Companies has difficulty to list in neither Shanghai Stock Exchange nor Hong Kong Stock Exchange. SGX has seized the opportunity to lure these China Companies to launch their IPO. These China Companies could easily qualify for mid to large cap stock in South East Asia's stock exchange. At peak, there were more than 200 China Companies listed in Singapore. However, after a few round of fun fare, good companies start to diminish. Second grade or rather low grade companies were also lure to list. These low grade stocks have eventually led to a few bad apples that shock the investment community in Singapore. The most infamous shocks include misappropriate of public funds and fictitious accounting practices. The revelation of this crisis made the investors and authorities become cautious on these companies. After a few year, the Malaysian investment banks and Bursa fill the gap by luring these companies to Malaysia. Eventually led to a few China Companies listed at Bursa. Those are Xinquan, Multi Sports, XDL and so on. However, the performance of these companies remain lackluster.

Financial Performance
PAT Jun 2010 = 105mil
PAT Jun 2011 = 118 mil (during the mark-down phase)
PAT Jun 2012 forecast = 35X4=140mil
Current Market Cap=256mil
2011 PE = 256/118 = 2.2
2012 PE = 256/140 = 1.8

Yes, 2012 forward PE of 1.8x. You only find this in M-Chips. For traders, this is excellent opportunity to trade until the perception of "rotten M-Chips" is unfolded. Otherwise, money will flow into this stock gradually. The Low PE signify the Fear factor is still high due to lots of horror story of M-Chips.

Insider move
No significant movement by major shareholder for the last one year








TA Observation
1. The stock has completed the four phases - Accumulation, Mark-up, Distribution, Mark-down.
2. Breakout of MA50 for the first time in the Mark-down phase
3. Selling climax in first two weeks of Dec 2011 with extremely high volume during the Mark-down phase.
4. Key now is price is required to hold above MA50.

Action
Keep watching. Retracement to to MA50 will be a good level to accumulate be the pioneer of the Accumulation phase.