I previously wrote a post on GMG Global where I cursorily analysed the stock. Here is an update where I crunch the numbers.
The gross margin for HY06 was actually 45.34%, the operating margin was 28.71%, and the net margin was 23.28%.
Basically what is happening with GMG Global is that its cost structure has not changed. So once the weather returns to normal GMG will be able to benefit from the prevailing higher prices of rubber as part of the global commodities boom as driven by China and India. If operating conditions return to normal that means we can expect GMG's ROE to return to somewhere near a respectable 10%.
As we can see the company is relatively conservatively leveraged at Liab/Assets of 20%.The stock price at $0.11 was below NAV and P/E is for HY07 numbers. P/E will come down much more if we take HY06 numbers.