Sinotel – Fundamental and Technical Analysis

Sinotel – Fundamental and Technical Analysis

Fundamentally

IPO price was 0.51 in November last year

Sinotel stock price hit a high or 0.755 post IPO but went down in tandem with broader market correction even though it reported strong earnings growth in FY07

FY07 EPS was 6.1cents

At 0.245, stock price is trading at 4x FY07 earnings

UOB initiated coverage on 28 Feb 08 with a target price of 0.43 based on 5.4x FY08 PE.

Strong order book so far : On 31^st January 2008, Sinotel announced that it has order book of RMB230m which is 65% of UOB revenue forecast for FY08.

Technical analysis – Has turned POSITIVE for the near term

Parabolic SAR

After being in negative zone since 28^th feb, Sinotel parabolic SAR signal just turned positive on 26^th march so short term trend is UP

Bollinger Band

The Bollinger band is contracting – this is a signal that the stock price may move faster in a particular direction soon

Aroon indicator

Moved into positive zone on 25^th march – short tern signal is POSITIVE

Directional index

Just cut up into positive zone on 26^th march to signal a POSITIVE change in direction

MACD

MACD trending indicator moved into positive zone on 25^th march – short term trend is POSITIVE

Stochastics

In POSITIVE zone

Moving averages

Medium term signal is still NEGATIVE since 13EMA is below 26EMA

Short term is POSITIVE as 5EMA cuts up 9EMA for the first time since 28^th feb

Summary

All short term signals for Sinotel have just turned positive

Cut loss point

I would consider cutting loss if it closed below 0.22

Mozart

p/s : The information provided is not an inducement to BUY or SELL. Please do your own homework or consult your broker before deciding.