On the fence

Happy New Year everyone I've just stumbled across this company and feel it has potential long term. Downsides: high gearing at 43.5%, book value at 34c/share, EV/EBIT at 23. Upsides: operating at high margins, 57.5%, with net profit margin at 18%, MC at $103M (all from FY2016). The company has also emphasised that only 2% of sales is directed to China so low chance of another Bellamys happening. Interesting that the current SP has drifted below listing price. Management seems very competent and also a bonus that they have a lot of shares held personally. Will wait and see how the market reacts to release of financial reports.