Using Pareto Principle to analyse stockRead about this company business here
According to its annual report, 73% of its revenue is derived from the 3 attractions in China.
And it has closed down 3 of these attractions , read here .
So, using the 80/20 principle , if a company generates 80% (in this case is 73% to be exact) from 20% portfolio and there are no other streams of revenue coming in during this period, then this company is in trouble.
Rent is ongoing though there might be some concession from the Chinese Government. However, with the closure, it is like a sitting duck in the river , awaiting for short sellers to shoot it down.
From the chart, since reaching a peak at 1.115 in 2015, it has been registering lower high and lower low price movement, a bearish signal. An important support at 0.685 is broken recently on 2 Dec 19 and it is now sitting on the 2nd level of support at 0.57.
I know this is one of the favourite among many dividend investors as it generates a 6% dividend. But would this still holds in current circumstances ?
Nobody knows how long will they get to reopen their attractions and having missed the festive season - Chinese New Year , they had potentially lost tons of money from the closure.
I am of the opinion that this stock will still heads south , perhaps towards 0.445 or even lower in the forthcoming weeks and months.
