Wednesday, September 08, 2010

Vodone purchased

This morning I added handset manufacturer Vodone (82) to the private portfolio paying HK$2.36 per share. At first glance the stock appears rather expensive, selling on a trailing PE of around 44x. However, this is misleading. A crude annualisation of interim result, drops the PE for the current year to around 26x (which is still expensive). However, revenues and earnings are expected to increase significantly following the completion of a recently announced acquisition of a mobile handset design house (Shenzhen Tastech) through a JV.

The balance sheet is clean with no material debt as at the last accounts date.

No comments: