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Three Shares that Lost to the Market Today

The Straits Times Index (SGX: ^STI) has moved up 1% to 2,988 today. Among its 30 constituents, 24 had made some headway in the trading session while only five suffered losses.

Outside the index though, were some bigger casualties. Let’s take a look at a number of shares that did worse than the Straits Times Index.

Dukang Distillers Holdings (SGX: GJ8) collapsed by 17.3% to S$0.215. The maker of baijiu (a Chinese alcoholic beverage distilled from grains like sorghum, rice, and wheat etc.) warned investors yesterday that it “expects its overall revenue and earnings to be significantly lower for the three months ended 31 Dec 2013” as compared to a year ago. Dukang had brought in RMB 738m in sales and RMB 144m in profits in the last quarter of 2012.

During the company’s latest first quarter earnings release on 14 Nov 2013 for the three months ended 30 Sep 2013, it had already seen quarterly revenue fall 4.2% year-on-year to RMB 389m while profits were slashed by more than half from RMB 64m to RMB 30.5m.

In that particular earnings release, Dukang had foresaw a slowdown in China’s baijiu sector as the country’s austerity measures had a negative impact on the sales of wine and spirits there. The company also wrote of its plans to “aggressively market” its cheaper products as well as expand capacity in accordance to sales performance.

That didn’t work out well judging from the profit warning announced by the company yesterday. Dukang cited higher marketing expenses and a “decrease in average selling prices and sales volumes of Luoyang Dukang and Siwu products” due to the aforementioned austerity measures as reasons for its shrinking top and bottom-line. Investors would get a clearer picture of its figures when its second quarter results are released on 14 Feb 2014.

Mushroom and fungi cultivator Yamada Green Resources (SGX: MC7) slipped 1.6% to S$0.18. The company had revealed yesterday evening that it would be releasing its second quarter results “on or after” 13 Feb 2014.

Yamada’s latest first quarter results, which were announced back in Nov 2013, saw its revenue jump 21% year-on-year to RMB 40m while profits were unfortunately reduced by 36% to RMB 645,000. The company had managed to sell more of its processed food products in the quarter, but a large spike in depreciation expenses from the completion of a new logistic centre had dinged its profits.

Phosphate miner AsiaPhos (SGX: 5WV) rounds up the trio with a 1.9% decline to S$0.157. The company had listed on the Catalist stock exchange on 7 Oct 2013 at an offering price of S$0.25. It proceeded to climb up to S$0.40 per share on its listing day for a 60% gain before closing slightly lower at S$0.395.

Unfortunately, the company’s share has more or less been in the dog house ever since, considering that it’s now 37% lower than its listing price. If anything, it goes to show that IPOs are not a sure-fire bet to making quick gains as anyone who bought the share near its peak of S$0.40 would be sitting on a considerable paper loss now.

It’s times like these where the sage words of Benjamin Graham come to mind: “In the short run, the market is a voting machine but in the long run it is a weighing machine.” Be it an IPO or a company that has been public for the last century, it will be the focus on its business fundamentals that counts in the end.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn’t own shares in any companies mentioned.