China Taisan (PE < 10)

A good dividend yield play for China Taisan?

At current price of $0.20, it is trading at FY07 PE of 3.8. Dividend yield for FY08 forecasted to be 9.5%.

Things I like about this stock:

1. Low PE and possible high dividend yield

Things I don't like / not sure about this stock:

1. Fabrics for sporting apparel? Does not seem like they have any good brand.
2. Does not have a well proven record. Just IPOed recently
3. Why pay out such a high dividend when just IPOed? Shouldn't they retain that money for growth? Or is the industry already saturated?

Will not enter into this stock for the time being. Maybe 5 -10 years down the road when it has a better track record.

I personally feel that it is should not be difficult for businesses that recently had their IPO to perform better than before. With a sudden influx of capital, if you are not able to improve your revenue and profits, the business is not worth listing in the stock exchange at all. An analogy: If some one were to give me $1 million dollars today (an influx of capital), surely I will be able to improve my passive income (profits) tremendously. Simply by putting it in the bank, my passive income compared to the year before will go up by leaps and bounds. If I use that money to buy into dividend yielding stocks or REITs, it would be even higher. Whether I am able to sustain that performance over the years is another issue. The same idea applies to a business that has just IPOed.