LIIHEN Stock Chart as at 16-08-2013

Dear valued members, 

You should be realistic about your goals. 

"In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten." Peter Lynch 

Disclaimer: Please be informed that the following mentioned stocks / symbols are solely for the purpose of education only; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your dealer representative or remisier or financial adviser. Please buy at your own risk. Final decision is yours. 

The 9th stock I wish to select for second half of 2013 is LIIHEN. 

My trading plan 
This stock is an up trending stock (daily, weekly and monthly). 
The stock price was hitting new high (current) at 1.75 on 19/7/2013 and 29/7/2013. The price goes through a correction and closed at 1.71 on 6/8/2013. 
Major resistance is 1.75. 
Major support is 1.58. 
Target price = 2.64. 
Margin of safety = 35% 
Potential profit gain = 53% 
Cut loss at 1.58 = 8.1% 
Risk reward ratio at 1.58 cut loss = 1 : 6.6. 

My target price of 2.64 is based on my Technical Analysis calculation. 

Technical Chart. 
A very nice up trending stock formed. There will be a good chance to hit our target price of 2.64 if the major resistance at 1.75 is crossed convincingly. 

Conclusion 
Recommend to buy (LIIHEN) at 1.72 on 6/8/2013. 

LIIHEN IV Calculation

Total Net Profit Years 10/10

Total Positive Operating Cash flow Years 9/10

Total Dividend Payout Years 10/10

Total Positive free Cash flow Year 7/10

Growth%
10 Years Average Turn Over 185196
Latest 4 quarters 346291 86.99%

10 Years Average Net Profit 7864
Latest 4 quarters 22864 190.74%

2011 2012 2013 Growth%
EPS (Cent) 18.57 35.71 38.11 6.72%
PER 9.75 5.07 4.75 6.30%
ROE 9.26 15.92 16.22 1.88%
NTA 2.01 2.24 2.35 4.91%
Dividend 6.5 12

2011 2012 2013
Net Profit 11145 21423 22864
Equity 120354 134578 140954
ROE 9.26% 15.92% 16.22%

Price CAGR % (Buy and Hold)
Average Return History -0.85%
3 yrs Return 9.73%

Method 1
EPS 0.38
g 7.00
Y 7.0
IV= (EPS*(8.5+1.5g)*4.4)/Y 4.55
Current price 1.81
Margin of Safety 60.23%
Potential gain 151.46%

Method 2
Discounted Cash Flows Calculator
Discount rate 12.00%
EPS 0.38
Earning expected to grow (annually) 7.0
for the next (? Years) 3.0
before leveling off to an annual growth 3.00
Calculate Stock Value per share 3.80
Current price 1.81
Margin of Safety 52.37%
Potential gain 109.94%

Method 3
ROE 16.22%
Rr 8.00%
NTA 2.35
IV= ROE/ Rr*NTA 4.76
Current Price 1.81
Margin of Safety 62.01%
Potential gain 163.24%

Method 4
(22.5*EPS*Book value per share)^0.5
EPS 0.38
Total equity 140954
Number of shares 60000
(22.5*EPS*Total Equity/share)^0.5 4.49
Current price 1.81
Margin of Safety 59.67%
Potential gain 147.97%

Thank you. 
Ooi