STOCK WATCH ~ HLN TECH (CURRENT PRICE $0.340)

BACKGROUND

HLN Tech offers a wide range of industry solutions covering precision rubber components, polymeric die-cutting, precision machined and turned parts, name-plates and aluminium parts.The group organizes its business structure into three business unites to serve its customers, which are primarily located in Southeast and North Asia.

NAV : $0.202
Current price: $0.340

HLN Tech upgraded to SGX mainboard on 22 Jan 2008.

I believe some of you remember when HLN Tech price suddenly surged up to $0.495 on 12 Dec 2007 (it even hit $0.58 on 28 Dec 2007). After closing, there was a SGX query regarding trading activity. You can see their response from http://www.sgx.com/ which basically mentioned that they have been approached by a party expressing verbal interest in the company.

They also requested a trading halt on 13 Dec 2007. They made announcement that the company is still in discussions with a third party in connection with a potential acquisition of the entire issued ordinary share capital of the company. :) Interesting right?

Then what happened next? The Board of Directors made a clarification regarding an article "HLN in talks with potential buyer" published in The Edge Singapore, which the article commented that there is a buyout offer on the table but the CEO was not interested to sell. HLN again emphasized that there are only preliminary discussions with the third party. What does it mean? Is buyout offer still possible?

* HLN targets to be China's largest alumunium service center by 2010.
* HLN announce that their 3rd Q sales set to soar with S$20m orders (exceeded 80% of FY2006 revenue)
* There was a placement at $0.55, Blackhorse Asset Management, JL Capital and Schroder Investment were some of the subscribers. (Current price $0.34 is about 40% discount)
* HLN expected to hit $50m revenue for FY2007. By saying that, they were confident even though HY2007 revenue was just $22.4m. Can they achieve that?

Considering all the factors above, do you think this company is worth buying?

STEADY BULL RECOMMENDATION

Fundamentally, it's not really cheap as currently there are so many fundamentally good stocks with an attractive price stocks around. Even though they can achieve $50m revenue for FY2007, the PE is still around 7x.

The only thing make this HLN interesting is the discussions with third party. When the discussion end? Will there be a buyout offer? So, can we speculate on this now?

SB recommends to BUY if there is any surge in price and volume which mean it breaks $0.355 with a volume at least 2m. HUAT ARH!!!!!!!!!!!!!!!!!!!!!!!!! GONG XI FA CAI 2008