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Posted: Tue Oct 02, 2007 3:04 pm Post subject: Load sinostar now !!!

this report dtd in late september and I always trust DMG report, very zhun. This stock is for long term keeps. Cannot paste all- very looooooooong report and I recvd in PDF, just some of the key points

Sinostar (SSTAR SP) Destined For Success

One of the largest downstream petrochemical producers and suppliers. Sinostar has a capacity to process a total of 350,000 tonnes of raw LPG to produce propylene and LPG, and 50,000 tonnes of polypropylene per annum.
With such a large capacity Sinostar has an advantage over competition as barriers of entry are high.

Strategic affliation with Dongming Petrochem Group creates competitive advantage. Sinostar's strategic affiliation with Shangdong Dongming Petrochem Group and its affiliated companies is vital, as Dongming Petrochem Group is one of the largest privately-owned crude oil refiners in the PRC, which ensures Sinostar a 20 years contract of secured supply of raw LPG.

Strategic location of Sinostar production facilities. Sinostar's
production facilities are strategically located within Zhongyuan Oilfield,
one of the largest oilfields in the PRC which is rich in energy resources.
The close proximity to energy resources, access to efficient transportation
networks and major highways attracting customers within a 400km radius.

China's market shows strong economic growth which provides long term demand for Sinostar's products. The demand for Sinostar's products is expected to increase as China's economy begins to sustain its current growth. With improving living standards and increase consumer spending, Sinostar expects to ride with the wave and profit from the current demand of its three main products (LPG, propylene, and polypropylene).

Future plans of a joint venture. Through this IPO, Sinostar has announced its vision to enter into a joint venture with one of its strategic suppliers, Dongming Zhongyou, to construct a heavy oil conversion facility with a maximum capacity to process 600,000 tonnes of raw LPG and other derivatives. Through this joint venture it will expand its current output of 350,000 tonnes of raw LPG per annum.

Sinostar is destined for success because competition within this industry is not relevent. The demand of LPG, polyprylene and polypropylene is so great that not even Sinostar and its competitor can meet its domestic cosnumer's needs. Every year domestic demand for propylene and polypropylene surpasses domestic supply.

Its strategic alliance with dongming Petrochem Group is vital because they provide a cost competitive advantage, ensuring a stable and ling term supply of raw LPG which is need to produce LPG, propylene and polypropylene. Sinostar has a 20 year contract with dongming Petrochem Group that insures Sinostar 100% raw LPG output.

Sinostar is one of the largest petrochemical suppliers within a 400km radius with the ability to produce 350,000 tons. This reveals why barriers of entry in this industry is so high. Therefore we believe this creates longer term success for Sinostar.

Sinostar's debt ratio is a major incentive with a ratio of 0.1x for FY04, 0.2x in FY05, and 0.6x in FY06. Simply put, Sinostar is a cash cow.

Posted: Tue Oct 02, 2007 3:48 pm Post subject:

Joined: 21 Jun 2007 Posts: 1961 Location: 熊猫村

Joined: 20 Apr 2007 Posts: 1767

Just looked at the prospectus. NTA is 11.46cts!, EPS 2006 : 3.91cts PE: 19years.

Rev: 1000M RMB: Profit : 97M RMB. Interestingly, 2005 and 2006 profit jump 6.4 times...The ipo price of 38cts is artifically as mkt just came out of the sharp correction in July/Aug....imagine China Energy was issued at ipo of 82cts and when it hit $1.10 few pple dared to buy thinking it would drop to 90cts but it moved to $1.40 stayed there and even hit a high of $1.93.....same for Sinostar hovering at 55 to 59cts ..many want to buy at 50cts..but today at 76cts with such high vol ..BB are collecting hve to push >$1 so that its mkt capitalisation will be big enough to qualify for funds under QDII to buy