Share Name Share Symbol Market Type Share ISIN Share Description
China Wonder LSE:CWO London Ordinary Share GB00B030LW50 ORD 2.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 19.00p 0.00p 0.00p - - - 0 06:36:16
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Engineering 2.0 0.3 5.1 3.7 3.42

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curlly: so where is the share price likely to go from here?
themoneymonster2: I hear cheering news is on its way at China Wonder (CWO), now 22p. Apparently Uhlmann are very keen on doing a deal which will leave a lot of China Wonder left over and worth all of the current share price. This gives a hypothetical value for China Wonder of the order of 50p. -- Above from EK, just out at
monis: share price breaking out. imo.
tivoliworldgaming: The share price suggests we are. Although I know nothing, I can tell when a share is going to take off, and these are definately going to big time.
mark1000: Friday a day that makes sense no trades no change in price - hope the results show profits at 500K and they pay the 0.5p dividend with an OK 09 YTD tading statement what would that do for the share price 15p must be possible or am I dreaming?
themoneymonster2: I just emailed CWO and got a response in under 10 minutes! Here it is: Dear Mr F, I expect that the Audit will be completed shortly,if there are no queries we should get the Results out next month. I agree that the market likes newsflow.I can assure you that I do work on this but we do not have anything to put out at present. Thank you for your interest and do not hesitate to contact me again if I can be of assistance. Mark Chapman My email: Hi I am a shareholder in CWO and was just wondering when we can expect some news? When are the results ending December 2008 being published? The share price is depressed as investors do not like companies who do not communicate with them! I am actually thinking of buying more shares, but not until i have a reply! Thanks and regards Mr F
themoneymonster2: There was no news in December from this holding company of machinery, engineering equipment and component parts manufacturing businesses operating from China. With the company having reported a pre-tax profit of ,546 and basic earnings per share of 1.10p for the six months ended 30th June 2008, the current share price looks to materially undervalue such performance and a balance sheet which at that date showed net cash of ,505. Our stance remains buy. From a broker update yesterday!!
mark1000: Trying to think through the depressed share price I suppose the spooky point is the resignation of the chief executive and principal shareholder in November who combined this role with being a senior proffessor -I would like to think that the academic has given way to the more astute business man who can take the business to another level so I await the full year results with more than a little interest and hope the dividend will be paid.
anna faelten: I should declare that is a corporate client of Rivington Street Holdings (RSH), for whom I work, but I thought this note might be of interest; China Wonder (CWO) Limited – Initiation of coverage: buy at 12.5p with target price of 25p Key Data EPIC CWO Share Price 12.5p Spread 11p – 14p Total number of shares 18 million Market Cap £2.25 million 12 Month Range 8p – 17.5p Net Cash £250,000 NMS 500 Market AIM Website Sector Industrial Engineering Contact Mark Chapman, Chairman Tel: +44 (0) 1483 892 130 China Wonder Limited was floated on AIM in October 2004 after acquiring the Jinzhou Wonder Packing Machine Company ('Wonder Packing') from the Wonder Group. The acquisition of Wonder Equipment in February 2007, and the introduction of Wonder Moulding at the end of 2007, has seen the company leverage its manufacturing and engineering skills into different areas as it becomes a diversified manufacturing company. Incorporated in Jersey, but operating out of China, China Wonder is benefiting from the low costs of being a Chinese producer in and the export opportunities the Chinese encourage. The company was formed as a spin off from the Wonder Group, a large Chinese based diversified industrial company with businesses including starter motor and auto-meter manufacturer - Wonder Automotive, shock absorber manufacturer - Wonder Auto Suspension, and automotive airbag manufacturer - Wonder Safety Systems. China Wonder retains many contacts and business partnerships with the larger Wonder Group, which not only provides an existing client base, but also allows a smooth transition into the corporate arena for some of its new product offerings. China Wonder's floatation in 2004 raised approximately £120,000 through the issue of 500,000 shares at 24p per share, which at the time gave a market capitalisation of £2.5 million at the placement price of 24p. The company was the first Chinese company to list on AIM but its path on the junior market has not been smooth. Last year, its then Nomad Blue Oar, resigned citing a need to cull its smaller clients. The company moved swiftly to appoint WH Ireland as its new Nomad. Wonder Packing and Wonder Equipment each provide about 50% of China Wonder's profits, with the newly formed Wonder Moulding company set to contribute towards 2008 figures. Wonder Packing is an established supplier of packing machines to the Pharmaceutical industry where it offers 13 product lines. A newly designed integrated packing unit has proved highly successful and now accounts for approximately half of all sales. Wonder Equipment was acquired in early 2007 and is located close to the Wonder Packing factory. The company offers customised engineering solutions to any application, but recent work has centred on the automotive, steel and education sectors, where it has several long established links. Established at the end of last year, Wonder Moulding produces the moulds for automotive pressings, an example of which is where a reinforced piece of metal is required to strengthen the join between the suspension unit and chassis of a vehicle – Wonder Moulding produces the mould for that reinforced joint. China Wonder is looking to expand both organically and through acquisition which could take the form of the purchase and relocation of a Western company, product or idea. The company believes that the competitive manufacturing advantage its factories in China provide allow it to compete in a wide variety of markets. Despite the booming Chinese economy as a whole, vast sections of the country remain underdeveloped and provide great opportunities. Wage inflation in the Liaoning Province remains minimal and the government is very supportive of industrial investment with China Wonder receiving generous tax concessions and favourable terms on its factory. China Wonder has net cash on its balance sheet, worth 1.4p per share and is set to deliver impressive earnings growth as Wonder Moulding starts to make a positive contribution. The shares currently trade on an ex-cash multiple of 6.7 times calendar 2007 earnings and just 4.4 times current year forecast earnings which fails to discount the growth being delivered. Our valuation of China Wonder uses a multiple of 10 times 2008 forecast earnings which looks undemanding for a company with a strong balance sheet, which is growing organically and which has the potential to increase its rate of earnings growth with bolt-on acquisitions. On that basis we initiate our coverage of China Wonder at 12.5p with a target price of 25p and a stance of buy. Forecast Table Year to 31st December Sales (£ Million) Pre-tax Profits (£ Million) Basic Earnings per share (p) Price Earnings Ratio Basic Dividends Per Share (p) Dividend Yield (%) 2005A 1.22 0.23 1.57 7.32 0.0 0.0% 2006A 1.06 0.21 1.41 8.16 0.0 0.0% 2007A 2.34 0.31 1.65 6.97 0.0 0.0% 2008E 3.00 0.57 2.50 5.00 0.25 2.0% --------------------------------------------- Operations China Wonder has two wholly owned subsidiaries – Wonder Packing and Wonder Equipment – and the recently established Wonder Moulding business. Wonder Packing The Jinzhou Wonder Packing Machinery Co Ltd company (Wonder Packing) was founded in 1998 with the aim of developing and manufacturing packing machines for a variety of applications. With the support of the Chinese government's National Ministry of Science and Technology creative project fund, Wonder Packing has turned its focus to the pharmaceutical machine market, for which it achieved the ISO9001:2000 accreditation standard in 2002. Its current business involves the research, design and manufacture of pharmaceutical packing machines and complete sets of equipment which are compliant with the hygiene and safety requirements of the drug industry. Wonder Packing operates as a stand-alone 100% owned subsidiary of China Wonder, but naturally benefits from the group's wider experience and operational efficiencies. Wonder Packing offers 13 unique products in 5 categories, including the DPH series of Roller-Planking machines, the DPP and DPFP series of Flat-Planking machines, the DXDK series of Soft Material Packing machines and the DW series of Pill-Dripping machines. Demand for an all in one packing machine has seen the company develop an integrated unit which performs the complete end-to-end process of taking the individual pills or tablets and producing a blister-packed, wrapped and boxed end product. The blister-pack machine is available as an individual unit, or as part of an integrated unit. The higher margin integrated unit currently accounts for 50% of sales, but standalone components of the integrated unit are available, for example the blister-pack machine can be bought individually. Wonder Packing already exports around 20% of its production to Spain, Belgium and Germany but it believes that there is great potential to open up new sales opportunities throughout the rest of Europe and the Americas. The company has five major global competitors in the manufacture of blister-pack machines for the pharmaceutical industry – two other Chinese, two Italian and one German. Although China Wonder's product marginally lags the German and Italian products at a technical level, the company's competitive advantage is through its low cost base and efficient manufacturing methods. The factory from which Wonder Packing operates is a state of the art facility in the Jinzhou Economic and Technology Development Zone, a purpose built technology park established in 1992 for the explicit goal of advancing Chinese industry to Western standards and beyond. The zone, in the North East of the country, has its own power plant to ensure the cheap and consistent supply of power to all factories, while various government incentives provide unrivalled support to the company. A high speed train links Jinzhou to Beijing, providing access to the capital in a little over 3 hours of travel time. Wonder Equipment China Wonder acquired Jinzhou Wonder Machinery Equipment Co Ltd (Wonder Equipment) in February 2007 for £842,500, made up of £100,000 cash and the issue of 5.5 million shares at 13.5p each. With its own factory located in the same Economic and Technology Development Zone as Wonder Packing, the company specialises in the manufacture, test and inspection of components, parts, equipment and assembly technology predominately for the automotive, steel and education industries. The company is divided into the 6 functional divisions of product development, technology and engineering, production and manufacture, quality assurance, sales and general office. A long established relationship with the Liaoning Institute of Technology (LIT) sees the company providing the research subject base for LIT's engineering master's degree, while benefiting from the sharing of ideas and a steady stream of qualified recruits. In addition, a designated research team provides customised solutions to industrial design problems and the development of non-standard equipment. Examples of some of the bespoke products developed are blanking devices for tubular materials and bars, forming devices for tubular materials, special welding machines, automotive test components and various kinds of production lines for assembly and welding. The recent development and manufacture of machinery for joining high pressure steel pipes has great potential in the booming oil and gas markets, and with oil rigs visible from the company's factory there is existing demand both from within and outside of China. Wonder Equipment prides itself on providing quality and suitable equipment in a timely manner through simple, highly efficient and automated processes. With a range of off-the-shelf products together with the ability to modify existing, or create new, machinery, the business will benefit from China's rapid industrialisation and booming export market. Wonder Moulding 75% owned by China Wonder, Wonder Moulding was established at the cost of around £125,000 towards the end of 2007. Having obtained its trading licence in January 2008, Wonder Moulding designs and manufactures the mouldings for various industrial applications. Currently the business is based at Wonder Packing's main facility, but will likely move into the Wonder Equipment factory as it the business ramps up production . Current contracts focus on the automotive sector and in particular the stamping of suspension components. Initially the majority of its output will be purchased by the Wonder Group's 'Wonder Auto Suspension' business, one of the top Chinese shock absorber manufacturers supplying a number of multinationals including Ford and Fiat. --------------------------------------------- China A communist state but with a market-oriented economy since 1978, China has recently started realising the potential that its population and geographic location gives it. With a rapidly growing private sector and an increasingly decentralised governance system, China continues to open its borders to increased international trade and foreign investment. Politically stable, the Chinese Communist Party rules the country with minimal opposition from such organisations as the Falungong spiritual movement and the China Democracy Party. The national currency, the Yuan, or Renminbi as it is sometimes known, was pegged to the US dollar until 2005 when it was revalued and pegged to a system which references a basket of currencies. The Chinese economy has grown faster than that of any other country over the past 25 years, with an average growth rate of over 10% per annum. The International Monetary Fund (IMF) has forecast economic growth of a little over 9% in 2008, climbing to around 10% by 2010. Such growth is centred in the larger urban areas which have seen massive migration from the rural hinterlands. Operating out of the smaller Jinzhou region means China Wonder should experience lower input cost inflation, while still benefiting from the economic growth in its sales markets in the rest of the country. --------------------------------------------- Strategy Profitable and established in its current markets, China Wonder is actively seeking product or business acquisitions. With access to technologically advanced facilities and an unrivalled level of production capacity and cost efficiencies, the company aims to take new products and ideas from all over the world and commercialise them through its Chinese production plant. Although looking to diversify its product line, China Wonder will continue to leverage its manufacturing experience, operational efficiencies and favourable business environment to deliver quality products at very competitive prices. A commitment to high standards and continuous innovation will ensure that the company remains competitive while benefiting from an increased globalisation of trade. --------------------------------------------- Management Chairman – Mark Chapman, aged 55. Chapman's background as a fund manager and corporate advisor provides the skills to execute his strategic management and investor relations responsibilities at China Wonder. With over 15 years of experience in Far East investment, Chapman is well qualified to balance the interests of a Chinese operation with Western investment. Previous roles have included head of the investment team of Chartfield Investment Management Limited, Director of Powerhouse Resources Inc, co-founder and investment manager of LMM Limited (now CYC Holdings plc), and Chief Executive of Sinovation Plc. Chief Executive Officer – Zhao Qing Jie, aged 50. Chairman and principal shareholder of Jinzhou Wonder Industrial (Group) Co Limited, the original Wonder company from which China Wonder was spun off, Zhao Qing Jie is responsible for the overall management of the China Wonder group. A senior professor and teacher of the Master's courses in the automotive department of the Liaoning Institute of Technology (LIT), Zhao Qing Jie has worked in academia, research and enterprise. With over 19 years of management experience in both state-owned and private automotive and packing businesses, together with the current chairmanship of Wonder Auto Technology Inc and directorship of the Jinheng Auto Safety System Holding Co Ltd, Zhao has a broad range of practical, managerial and organisational skills. Operations Director – Miao Guo Jun, aged 35. Having progressed from the Head of the Technical Department at Wonder Packing to assistant General Manager, then General Manager at the company by 2002, Miao Guo Jun has a combination of practical and managerial skills. One of the chief designers for the company's successful bubble cap packer (DPH130) and bag packing (DXDK900) machines, Miao Guo Jun has been instrumental in establishing the procedures that led to Wonder Packing achieving the ISO9001 accreditation. Non-Executive Director – Zeng Qingdong, aged 44. Holding a masters degree in Automotive engineering from Jilin University, Zeng Qingdong has over 10 years of management experience in both large state-owned and private holding companies. Previous appointments have included deputy director for the Jinzhou Shock Absorber Main Plant and general manager of Jinzhou Wonder Auto Suspension System Co Ltd. Zeng Qingdong is currently a director on the boards of several Hong Kong Stock Exchange listed companies. Non-Executive Director – Sun Xiao, aged 44. With over 10 years of managerial experience in large medical and chemical state-owned companies, Sun Xiao has an in-depth knowledge of Chinese industry and an extensive network of business contacts at many of the top organisations. Holding a Bachelor of Science (Engineering) and a Masters of Economics, Sun Xiao's previous appointments have included executive president of Shandong Zinhua Medical Instrument Company, minister's secretary at the Ministry of the Chemical Industry and office director of the State Bureau for Light Industry. Sun Xiao is currently deputy president of Hong Ta Financial Investment Co Ltd and Hong Ta Venture Capital Investment Co Ltd, and director of Sweet China Plc. With excellent commercial English language skills Sun Xiao has been working with British companies for 15 years. Non-Executive Director – James Wolfson, aged 52. A qualified solicitor in both the UK and South Africa, Wolfson has an extensive knowledge of local and international tax trusts for both businesses and private clients. Prior to his appointment as a China Wonder director in 2006, Wolfson was acting as in-house legal counsel to a major private bank on the Isle of Man. --------------------------------------------- Shareholders There are currently 18 million shares in issue with an additional 500,000 options outstanding at an exercise price of 24p with an expiry date of 30th September 2009. Those holding more than 3% of the issued share capital are: NAME SHARES HELD (#) PERCENTAGE HELD (%) Zeng Qingdong 3,759,000 20.9% Zhao Qingjie 1,875,000 10.4% Cheng Yingguang 1,505,000 8.4% Liang Hailin 1,375,000 7.6% Fei Jianxin 1,375,000 7.6% Miao Guojun 1,077,000 6.0% Shi Lizhi 742,000 4.1% Han Tieshi 718,000 4.0% Tang Shudan 574,000 3.2% TOTAL 18,000,000 100% --------------------------------------------- Recent Financial Results On June 6th 2008, China Wonder published its results for calendar 2007. Sales increased from £1.064 million to £2,337 million with organic growth running at 10% and the bulk of growth coming from the newer companies in the group. Gross profits increased from £534,245 to £840,050 while pre-tax profits increased from £209,449 to £306,951. The tax charge for 2007 fell to 13% from 25.7% and earnings per share increased from 1.41p to 1.65p with the weighted number of shares in issue increasing from 11 million in 2006 to 16.16 million. The company flagged that the tax charge paid by its operations in China is likely to increase towards 25% going forward. The company ended the year with cash on its balance sheet of £603,931 and with short terms loans due of £69,086. However we believe that the cost of establishing Wonder Moulding means that net cash is now around £250,000. At the period end current assets stood at £2.285 million and current liabilities were £1.199 million with net assets at £3.148 million or, excluding intangibles, at £1.726 million. Of some concern was the sharp negative movement in working capital and this meant that the cashflow generated from operations was just £131,121. As it stands, if the status quo is maintained, China Wonder requires no further external capital, however if the company looks to acquire another business, further funding is highly likely. --------------------------------------------- SWOT Analysis Strengths China Wonder operates in a very favourable environment with state of the art facilities, various tax concessions, a low cost of labour and a very supportive government. Combining these factors affords the company a very competitive cost base, while having excess capacity and further room to expand. Historically profitable and with a number of repeat customers, China Wonder has laid a solid foundation for growth. As Chinese production becomes increasingly acceptable around the world, the company's profitable history and solid revenue streams will facilitate the raising of capital necessary to expand. As China Wonder broadens its revenue base an increasingly diversified range of products will continue to lower the cost base as skills can be shared and central overhead spread over a wider area. While this is generally applicable to most companies, the cost savings are more pronounced for a smaller company, and is perhaps more visible at China Wonder due to its UK / China split. China Wonder, although an obvious Chinese company, enjoys strong Western connections and is actively seeking to profit from this enviable situation as it combines the favourable manufacturing environment of the East with the wealth and business opportunities in the West. The company has a credible Western senior management team. Weaknesses The stigma of a made in China product, although ever diminishing, can still be an issue for higher quality / value goods. The fact that Asia produces and exports so many products these days means that it is inevitable that when a product is recalled more often than not it will have been made in the East. High profile recalls have a negative impact on the region as a whole and unfortunately the majority of quality producers get tarnished with the same brush. In the market for customised solutions, such as those offered by Wonder Equipment in particular, communication is critical. The obvious language and custom differences that exist between the East and the company's expansion targets in West, could present problems even if in perception only. It is crucial that China Wonder and its operational subsidiaries address this potential issue if it is to succeed internationally. The company's results for calendar 2007 showed a significant adverse movement in its working capital position. While this is a concern, we have been assured that a delay in a major packaging line customer's payment is due to be settled shortly and will not affect working capital which is adequate for current operations. Opportunities China Wonder is aggressively seeking new acquisitions and given the competitive advantages its production environment affords, the range of potential profitable acquisitions is broad. With a flexible production platform it is conceivable that any Western manufactured product could be produced at a fraction of the price at one of China Wonder's facilities. Expanding its existing market into more European countries, not to mention those in the Americas and other parts of the world are obvious avenues for growth. For example, sales in the global pharmaceutical industry were estimated at over $600 billion in 2006, and with tablets and pills making up a large portion of the delivery method, Wonder Packing has a very large potential market, not to mention the inelastic demand for medicine regardless of economic conditions. Threats With its cost base predominantly in Yuan, an increasing share of revenue in Euros (and other currencies), and its reporting requirements in Pounds, currency risk is evident. The company's hedging strategy could have significant impact on actual and reported profits and hence how China Wonder's performance is perceived. Chinese government intervention is a risk in that unforeseeable market activity restrictions can occur apparently at random. The last occurred in December 2006 when the authorities decided to control the supply and price of medicines which had a flow on effect to the demand for Wonder Packing's specialist packing machines. Although these restrictions are infrequent, the fact that they can swiftly be imposed with little or no warning makes it difficult to prepare for such disruptions. China has a history of corruption and other economic crimes as we would define them in the West. The government is actively seeking to eradicate such activity, but the sheer scale and degree to which it is ingrained in the culture could take generations to resolve. The company's competitive advantage is in part based on the favourable tax regimes it enjoys and this may change. It is more dependent on the supply of relatively cheap labour. To date the Liaoning Provence has experienced minimal wage inflation but elsewhere in China that is not the case with wage inflation in some provinces now running at 10% per annum. It cannot be guaranteed that China Wonder's competitive advantage based on low wages will not be eroded. --------------------------------------------- Forecast and Valuation China Wonder has an established record of profitability, access to state of the facilities in a low cost and supportive environment and the means and experience of developing new production opportunities to a global market. While there is no doubt the company is on the hunt for acquisitions, there remains a strong commitment to quality and innovation in the existing businesses. Upside for the company is provided by new acquisitions and the development and broadening of the current range of products at Wonder Packing, Equipment and Moulding. Profits in the current years should increase rapidly as a result of China Wonder gaining a full (and near full respectively) year's contribution from Equipment and Moulding. On the back of a forecast increase in sales in 2008 from £2.34 million to £3 million we expect pre-tax profits to increase from £0.31 million to £0.57 million. Although the tax charge may increase, at current exchange rates (13 RMB / GBP) we still expect earnings per share to increase from 1.65p to 2.5p and on that basis we would expect China Wonder to propose a maiden final dividend of 0.25p. The shares currently trade on a multiple of just 5 times 2008 forecast earnings. In our view this over-discounts the perceived risks of investing in Chinese AIM listed companies, and is likely related to the fact that microcaps are unloved and long memories of some of China Wonder's past problems. The rating fails to discount the fact that China Wonder is profitable, has net cash, has already delivered strong earnings growth and that this growth should accelerate over the next 24 months. Of course it is impossible to compare a microcap based in China to more established UK enterprises, but it is worth noting that the Industrial Engineering sector of the LSE / AIM markets, in which China Wonder is classified, trades on a 2008 PE of more than 30 and on a PEG of 3. China Wonder trades on a PEG of 0.09 and is currently valued on an enterprise value of less than current year forecast sales. We are initiating our coverage of China Wonder at a target price 10 times current year forecast earnings - that is to say of 25p. At 12.5p our stance is buy. Anna Faelten Rivington Street Holdings
radarlove: park1n, I believe the CWO share price will start moving upwards during April. The Sweet China IPO will make people aware of CYC and in turn other Chinese companies that they are involved with. There is strong media interest with China, at present, so this sentiment will help things too. The CWO results will also place the spot-light back on the share price and as we already know, they are going to be very good including news of an acquisition. The problem with the CWO share price is, that it behaved rather like a premature ejaculation! All the action occurred in the first 20 seconds. The photo header doesn't help. :))
China Wonder share price data is direct from the London Stock Exchange
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