DFM -> Clear buy -> going to $1.50 (50% upside)

Pros ->
* CHEAP -> PE of 4.97
* No Debt
* CEO says aim to increase Earnings 10% this year (just paid $81m for an acquisition which will add $6m AUD)
* NET profit with the above will be approx $100m
* Dividend payout last year was only 25% of NPAT.
* Dividend at current price = 5% yield - respectable, but remember that is leaving the company with $75m of cash to grow. In my opinion they should/could increase the payout ratio to 40-50% and then have a 10% yield at this price
* IPO price was $1, and that was with lower earnings. You are basically buying in here at the IPO price.
* market share is only 3%, lots of room to grow.#
* they just came out and said the current storms have not impacted them

Cons
* Chinese - a few staff in Australia
* freefloat is <20%, 80% is owned by the chairman.
* 100% of revenue is generated from sept-dec.. therefore when we get the interim results for the first 6 months - expect to see no revenue.
* CNY currency is weak, and therefore when transferred into AUD we could see up to 5% currency headwind.

Neutral
* 100% of revenue is from china so you are buying into the china growth story
* Why float? they didn't need the cash, but I think it was more for exposure

So - > Overall, I think its good risk/reward here with upside. The stock has dropped from $2.50 and has room to move up. A higher payout for dividend and/or revenue increases will help the shareprice. The stock gives exposure to Chinese food inflation which is growing due to a richer middle class. I think a lot of institutions are stuck from investing due to the small freefloat, but that shouldn't discourage retail investors.

Technically, RSI is 18 (over sold) and macd has just crossed which could take us higher to seller exhaustion.

Goodluck all.