Group Sense Recommendation: Sell Brokerage: G K Goh Group Sense manufactures electronic dictionaries, translators and organisers. These are designed and developed in-house and are mostly under the group's brand names. The biggest selling item, the Chinese-English dictionaries, are sold in Hongkong under the Instant-Dict brand name. Listed in January at $1.02, the shares have performed strongly and trade at $2.42. This price puts the stock on 15.3 times historic earnings - too high for a high-risk industrial stock. Lam Soon Food Recommendation: Buy Brokerage: Smith New Court After a quick run in Lam Soon Food's share price from $3 to $3.85 within the past weeks, the counter came into the current consolidation, coinciding with investors' growing cautiousness towards China-concept stocks. While the market is generally concerned with China's economic prospects, the cool down of investors' enthusiasm does allow them to be selective on those so-called China plays. We believe Lam Soon Food's excellent earnings prospects should make the group a high-quality China play. The defensive nature of the food industry should provide the group natural shelter from the impact of future economic ups and downs. MC Packaging Recommendation: Sell Brokerage: Crosby Securities The group is principally engaged in the manufacture and sale of two-piece aluminium cans, three-piece tin containers, plastic bottles and plastic containers. The group's products are sold to customers in the beverage, edible oil, lubricants and chemicals industries and the majority of its products are sold in Hongkong and China. While we like the group for its management, products and market strategy, the stock is fully valued. The growth market is China, with sales expected to grow by 20 per cent to 30 per cent per annum over the next three years. These additional sales will be obtained as a result of link-ups with local manufacturers which will have an impact on earnings. Net profits are only expected to rise by 12 per cent to 15 per cent in 1993. By 1994-95, the new operations should be operating effectively and profitably. But the stock is expensive on a P/E of 21 times which represents an 80 per cent premium to the market.