Analyst

Steve Zhou, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/eclat-textile-company-ltd" target="_blank" data-smartkarma-citation="entities:13209:1" rel="noopener">Eclat Textile Company (1476 TT)</a> is a vertically integrated textile company, with around 20% net profit margin, similar to <a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a>. </li>
<li>The company just reported 3Q23 results, with sales down 26% yoy and net profit down 28% yoy.  Starting the next quarter 4Q23, the company is expected to return to growth.</li>
<li>The company now trades at 23x 2024E earnings.  I believe the valuation is reasonable as growth returns, and there are potential upside catalysts. </li>
</ul>



Eclat Textile Company (1476 TT) is a vertically integrated textile company, with around 20% net profit margin, similar to Shenzhou Intl Group Holdings (2313 HK). 
The company just reported 3Q23 results, with sales down 26% yoy and net profit down 28% yoy.  Starting the next quarter 4Q23, the company is expected to return to growth.
The company now trades at 23x 2024E earnings.  I believe the valuation is reasonable as growth returns, and there are potential upside catalysts. 


Eclat Textile (1476 TT):  Start Of Upcycle

Chairman, sgtradex

Tan Chin-Hwee

Chairman

Thematic (Sector/Industry)

Two years ago I recalled during May/June period, put premiums were at double digits for the biggest china financial stocks. It was dirt cheap at low valuation pricing (3x p/e; 0.8x p/b) pricing in worse cases scenario. Clear Buy. In the last two months, US$1.7 trillion having been added to China&rsquo;s stock market capitalization with some Chinese valuations now look excessive (according to CLSA, China&rsquo;s nine largest listed stock brokers have a combined market cap US$319bn). Market is indeed hot, as an investor in a start-up P2P china financial portal-an additional 1 million new subscribers signed up in last 3 months! &nbsp;Overall, the influx of foreign money will be a great time for the SOE sector to deleverage and the banks to recapitalize and write down their debt.

Two years ago I recalled during May/June period, put premiums were at double digits for the biggest china financial stocks. It was dirt cheap at low valuation pricing (3x p/e; 0.8x p/b) pricing in worse cases scenario. Clear Buy.  In the last two months, US$1.7 trillion having been added to China&rsquo;s stock market capitalization with some Chinese valuations now look excessive (according to CLSA, China&rsquo;s nine largest listed stock brokers have a combined market cap US$319bn). Market is indeed hot, as an investor in a start-up P2P china financial portal-an additional 1 million new subscribers signed up in last 3 months! &nbsp;Overall, the influx of foreign money will be a great time for the SOE sector to deleverage and the banks to recapitalize and write down their debt.

A herd of fine horses are starting to head back to their home market

China

Shenzhou International Group Holdings Ltd manufactures and processes textiles.  The Company produces, dyes, finishes, prints, embroiders, cuts, and sews knitwear.

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Shenzhou Intl Group Holdings (2313 HK)

Eclat Textile (1476 TT): Start Of Upcycle

Eclat Textile Company (1476 TT) is a vertically integrated textile company. Growth is expected to return in 4Q23, and the current valuation is...

Steve Zhou, CFA

A herd of fine horses are starting to head back to their home market

Two years ago I recalled during May/June period, put premiums were at double digits for the biggest china financial stocks. It was dirt cheap at...

Tan Chin-Hwee

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Eclat Textile (1476 TT): Start Of Upcycle

​Eclat Textile Company (1476 TT) is a vertically integrated textile company. Growth is expected to return in 4Q23, and the current valuation is...

Steve Zhou, CFA

A herd of fine horses are starting to head back to their home market

Two years ago I recalled during May/June period, put premiums were at double digits for the biggest china financial stocks. It was dirt cheap at...

Tan Chin-Hwee

Eclat Textile Company (1476 TT) is a vertically integrated textile company. Growth is expected to return in 4Q23, and the current valuation is...