STAR PHARMACEUTICAL LIMITED: A Star in SGX ?

STAR Pharmaceutical Limited is an investment holding company. The principal activities of the subsidiaries are those relating to the development, manufacturing and trading of pharmaceutical products. The Company operates in the development, manufacturing and trading of pharmaceutical products segment. The Company and its subsidiaries are engaged in the manufacture and sale of both western and Traditional Chinese Medicine (TCM)-formulated prescription drugs. The Company's range of pharmaceutical products include antibiotics, cerebrovascular drugs and cardiovascular drugs, and other specialized drugs manufactured in-house in various dosages and administration forms from powder injections, lyophilized powder injections, liquid injections to tablets, capsules and granules. It has approximately 820 distributors to hospitals, clinics and pharmacies. The Company has a manufacturing facility based in Qionghai City, Hainan Province of People's Republic of China. 
( Taken from Thomson Reuters)

Listed in 2006 at $1.75 ( Adjusted for share consolidation of 5 into 1 in 2015)

Investment Merits:

1) Its margin for its business is decent.

Figures for first 3QFY2017
Gross Margin (TTM) (%)44.12
Operating Profit Margin (TTM) (%)14.59
Net Profit Margin (TTM) (%)12.05

2) NO debt

Current as reported in 3QFY2017, Star Pharm do not have any debt.

3) Net Cash Position

It has a cash of RMB$77 million.

Its current payable is only RMB$23.9 million.

Assume we use the cash to over its payable, Star Pharm is sitting on RMB$53.1 million or S$10.6 million.

Thats S$0.228 or 83% of its last done price of $0.275

Effectively getting all its other assets of RMB$110 million(S$0.47) for S$0.047 per share(at 90% discount)

4) Low PE of 7x

5) Share buyback by company

I would say it is rare for s-chips to do share buyback on SGX.
I am confident that they do have the cash resource to do it.

The last share buyback was in Sep 2017, at S$0.22 which is its cash level.

This provide a base for the share price.

*disclaimer: i am vested in Star Pharm