We have been following this stock since it is at level of HKD 8 and above for sometimes. This stock has a great foreign fund support and its solid fundamental. Due to CSI index beaten down as Chinese government is doing a series of monetary policy to contain inflation. Chadoa (In English) has been also beaten down to HKD 4-5 level.
But thats not hurt, rumour that Chadoa has over reported its argriculture land by a Hong Kong media prove to be destructive. Though Chadoa denied with a possible legal action. The price has been further tumbled to HKD 2.8-2.9 level as of todate. We entered the stck at level of HKD 4.80, HKD 3.60 and HK 3.00 and will still adding this equity. But we are not alone, all major international funds also increasing their hold on this counter.
Weak HKD giving a good opportunity to enter this share and we believe the return is huge when market stabilized. We cannot use regional PE peers to calculae its reasonable price but we do believe target price of HKD 4-5 is an easy step. That giving minimum return of 30% for the next 12 months.
We still believe food is getting less in supply worldwide, a buy call and we will add in anytime from now further for our portfolio.