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Singapore’s Big Loser For The Week: Eu Yan Sang International Ltd.

Credit: hobvias sudoneighm

Eu Yan Sang International Ltd. (SGX: E02), or EYS, declined 8.2% to S$0.78. With the Straits Times Index (SGX: ^STI) down by 1.9% it makes EYS the big loser for the Singapore market this week.

The firm is one of the largest Traditional Chinese Medicine (TCM) groups in South East Asia. It offers more than 300 products under the Eu Yan Sang brand name and over 1,000 different types of Chinese herbs and other medicinal products. As of 30 June 2014, it had an extensive distribution network comprising 281 retail outlets in China, Hong Kong, Macau, Malaysia, Singapore and Australia.

On 26 September 2014, U.S. Food and Drug Administration warned that a product manufactured by Eu Yan Sang (Hong Kong) Ltd, Bo Ying Compound, carries potential lead poisoning risks. In response, EYS said on 30 September 2014 that it had appointed lawyers in U.S. to liaise with the local authorities to obtain more information on the finding.

The company went on to gave assurance that the product has passed the required tests of Hong Kong Department of Health for safety, including lead content, and is approved for sale in the country and Macau.

It also added, “All Eu Yan Sang products manufactured and retailed at our stores and authorised distributors in our core markets (namely, Hong Kong, Malaysia and Singapore) have been cleared by the health authorities in the respective countries and are safe for consumption”.

In Singapore, Health Sciences Authority clarified that the version of the product sold in our shores, is made from a different manufacturer and therefore, is safe for consumption.

EYS is trading at a historical price-to-earnings ratio of 23 and sports a dividend yield of 2.8%.

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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.