I missed Perennial (HK:725) when I posted the scorecard for portfolio companies that reported their annual results for the December 2010 financial year end:
Perennial (HK:725): while it was a good result and the company looks very cheap on the surface in terms of trailing PE, trailing dividend I have some concerns. Although gearing is moderate, with small caps I am generally more comfortable with companies which have either very low debt or, better, none at all. Also, although the company actually managed to improve its gross operating margin, the margin is still relatively modest in the context of a company which is vulnerable to both inflationary pressures and RMB appreciation.
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