S-Chips

S chips are underperforming the market due to uncertainty in China's economy with an average pe of 6 relative to STI's pe of 12.

valuation getting attractive but risks still intact. Listed below are some favored s-shares.

F&B: raw cost affected by inflation (sector / risks)

Synear

• tg 58c (based on forward pe)
• 08F PE 8.5
• 07 ROE 24%

Chemical: margin squeeze and poor performance due to reliance on crude oil

Li Heng

• tg 73c
• 08F PE 4
• 07 ROE 92%

Retail: fundamentals intact but risk of peaking as consumption slows

Beauty China

• tg 83
• 08F PE 5
• 07 ROE 29%

China Hongx

• tg 48
• 08F PE 9.8
• 07 ROE 19%