Falling Knife of the Week: Dukang Distillers

dukangProducer and seller of baijiu China, Dukang Distillers Holdings Limited (SGX: GJ8), fell 21.8% so far, closing at $0.215 on Thursday.

Dukang has a range of baijiu products sold and marketed under the Dukang and Siwu brand names. Its product series include “Jiuzu Dukang”, “Guohua Dukang” and “Siwu Old Cellar 1949”, among others.

On 5th February 2014, the firm announced that it expects its overall revenue and earnings to be much lower for the second quarter of 2013 (2Q2013) as compared to the previous year.

The reasons provided for that are due to Chinese austerity measures impacting sales of wine and spirit and this caused a decrease in average selling prices and sales volumes of Luoyang Dukang and Siwu products; and a higher advertising and promotional expenses due to increased advertising and promotional activities.

The company will release its latest earnings on or before 14 February 2014 and more details will be provided then.

Dukang is currently trading at a historical PE ratio of 2 and it does not pay out any dividends.

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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 contributor Sudhan P doesn’t own shares in any companies mentioned.