Get good dividend while waiting for Emperor Capital (717.HK) to rocket up

I started to invest in Emperor Capital (717.HK) since early 2015 and I have made solid returns from it so far. It ever surged 43% in a day (on 13 April 2015) during its heyday in 2015 and I was vested then. However, after the big plunge in June 2015, the performance of this stock has lagged far behind Hang Seng Index and it is time we took a closer look at it, load up on it and bide our time to wait for its next big move while collecting its attractive dividends.

(1) Shrewd management with smart moves

I can see that the management of Emperor Capital has been shrewd and prudent from their moves so far.

They invited China Huarong Asset Management Co Ltd (2799.HK) in May 2016 to purchase 380 million new Emperor Capital shares at 66 cents apiece. China Huarong has now a market cap of HK$ 148.076 billion, and its share price has gone up 35.84% since the start of this year.

In late 2016, Emperor Capital invited another giant, China Taiping Insurance Holdings (966.HK), to purchase 613 million new Emperor Capital shares, also at $0.66 apiece. China Taiping Insurance has now a market cap of HK$89.132 billion and its share price has gone up 56.25% since the start of this year.

Both China Huarong and China Taiping Insurance have their businesses in China and they collectively own about 9% of Emperor Capital and they should be able to provide synergy to Emperor Capital now or in time to come.

If you buy Emperor Capital today, your price is only one cent more than the two giants’.

(2) Hot property market helping its mortgage loans to grow

The hot HK property market has helped Emperor Capital in boosting their mortgage financing business even long before the stock market started the run. Its EPS is expected to be 10 cents in FY2017 and 13 cents in FY2018.

(3) Many attractive factors for my purchase of 717 shares

I can think of the following attractiveness of Emperor Capital:

Taking 18 Oct 2017’s closing price of 67 cents, its rolling p/e is 7.67x and should be lowered to 5.15x next year. Its already attractive current p/b of 0.936x will be lowered further to below 0.73x next year. Its forward dividend yield for whole of 2017 should be more than 4%.

It has plunged about 71% from its height achieved on 27 April 2015. It ever surged 98.18% in a day, on 8 Dec 14, from $0.55 to $1.09, just that it had not been on my radar then. But at least I caught the second highest surge of 43% on 13 April 2015. I like its volatility at the picky time and I am prepared to catch the next crazy surge which I think is around the corner.

In HK market, stocks below HK$1 is considered penny and the probability of penny stocks to shoot up fast will increase as time goes by.

Next earnings announcement for Emperor Federal should be on 8 Dec 2017. It should be a solid result and higher dividends should be declared. The last time the major shareholder Albert Yeung Holdings Limited bought Emperor Capital heavily within a period was about half a year ago, with the highest price done then at $0.69, higher than the closing price of $0.67 concluded on 18 Oct 2017 when this post is written.

(4) Conclusion

Emperor Capital is in the midst of an exciting confluence of seemingly positive factors  --- Expected good growth, attractive dividend, shrewd management, a penny stock in second-half of a bull run, a laggard with explosive surge potential --- all driving towards one conclusion – My target price of $1 by 28 February 2018, an upside of 49% gain from here.

Superphang

https://superphang.blogspot.sg

Uptrend of China Vast (6166.HK) is intact

Click on the link below to read my earlier post on China Vast (6166.HK) dated 25 July 2017:

https://superphang.blogspot.sg/2017/07/solid-peg-ratio-and-rampant-insider.html

Wang Jianjun, Chairman of China Vast, kept buying his company shares before and after my post. Just 9 Oct, 10 Oct, and 11 Oct, in 3 consecutive days, he spent a total of HK$77.2163 million or S$13.35 million to purchase a total of 20.517 million shares at an average price of $3.763528 apiece, increasing his holding in his company shares to 68.94 per cent. 

There is no doubt that he has been highly confident of the performance of China Vast going forward. With the closing price of $4.31 on 13 Oct 2017, its rolling p/e is still a superb 6.008x even after the share prices has surged more than 62% since about two months ago.

I believe the next thing he could do is to privatise the company. He could also declare a bonus issue, or he could give fat dividends to himself and the shareholders like me. My imagination could be wrong but nobody can stop me from having a dream that is plausibly, if not highly, realistic.

I sold about 9% of my initial position and with these rampant purchase actions by the Chairman, I am more determined to hold my remaining shares for a higher target price now.

My hard work has brought me a total realised and paper gains of S$62,530 or 62.75% of my initial outlay, and this is achieved in two months and a day. Wow, spring has come early this year and definitely not bad an early angpao for me!   

Superphang

https://superphang.blogspot.sg/

Emperor Entertainment Hotel (296.HK) vs Emperor Capital (717.HK)

The insiders from the Yeung's family has been rampantly buying 296.HK quite recently and the highest price they bought was $1.90, very close to today's (13 Oct 17) closing price of $1.92.

The last time Yeung's family bought 717.HK heavily within a period was about half a year ago, with the highest price done then at $0.69, higher than today's closing price of $0.66.

Both stocks can be considered for long-term investment for their attractive dividend yields and p/e. But I will prefer 717.HK for its more explosive power of surge when the securities brokerage sector starts to move up after a period of sizeable increases in transaction volume on HKEx or Shanghai Stock Exchange.

The stage of the bull run has come to the second half which means second liners and penny stocks will be the BB's targets and 717.HK, from past experience, should be market’s darling soon.

I estimate earnings per share for 717.HK will be 13 cents for this financial year and this will translate its p/e to a superb 5.08x. I strongly believe that insiders of 717.HK will start buying the shares way before 8 Nov 2017 in anticipation of the good year-end earnings announcement.

I have started loading up on 717.HK and I am looking forward to a fat year-end angpao from this investment.

Superphang
https://superphang.blogspot.sg/