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China Shoto could drop divi

TIP UPDATE: Horrible trading leaves battery-maker in a fix over full year payout

China Shoto's battered shares slumped another 15 per cent after a warning that first half profits will be 12 per cent down year-on-year.

IC TIP: Hold at 175p

Last year's £25.1m of full-year pre-tax profit was split 25/75 per cent between the first and second periods, but word that trading remains "challenging" as telecom infrastructure project spending in China is cut back, implies that it will be tough to pick up the slack in the second half of this year, prompting the company to close a factory to crimp costs. The shares have slumped 60 per cent since April, but it now looks unlikely that a dividend will get paid at all this year, stripping away the final attraction of the shares.

What we said:

When: 19/02/10

Price: 315p

Performance to date: -44%

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