Klee must be fare making comment. How come I can earn more than 100% after seeing moneykj recommend Sendai in 2016. What price you in? At peak 1.40? Sure kantoi la...haha
I guess this counter, or rather all chinese counters are all about the trust considering there are so many fraud/scandals uncovered, if trust is not an issue, i believe everyone would agree with me that it should trade at least above its net-net value RM0.23, even though they are making losses.
So let's just focus on why i trust the management.
1. All promises thus far since IPO has been fulfilled
2. Audited by BDO since IPO, but recently changed to Afrizan Tarmili Khairul Azhar (Parker Randall), which is also the newly appointed auditor for 1MDB, they are here to discover frauds in 1MDB and by auditing XDL should give it a boost in confidence in accounting.
3. Both OSK and HwangDBS Research visited their manufacturing plant, so they are not operating some non-existent factories.
4. No change in management
5. No dilution in shareholding
6. Adequate director fee at less than 5% of gross profits
7. Insider keep accumulating, even exercised tonnes of warrants at RM0.16
8. Some ppl recall they made a rights issue in 2014 (their most difficult year) to finance the construction of another building even though they have huge balance of cash in hand, if u look closer, the remaining proceeds from the rights issue is merely sufficient to cover their annual working capital, without it, they would've constructed the building but left with insufficient cash to finance daily operations.
9. Another hiccup is during 2012, they mentioned that they are in talk with Navis Capital Partners for an investment deal at 1.2 times NAV. I can see the management's intention in influencing the share price here, but i can understands that, as the management has always been frustrated by the weak share price performance, they even done all sorts of things to improve it to no avail, bonus issues, giving warrants etc., recently they even need to reduce the par value of their shares to keep it below the share price. So everyone should be able to see the management also wants the share price to perform good.
10. Some concerns on it being registered in Bermuda, i would understand it as a multi national company, it'll be a easier to manage finances and taxes and to facilitate listing in another countries i supposed.
On a side note to the trust issues, the management has been actively throughout the years to improve the biz (although they dun really work), they went big for marketing during 2014 while controlling the costs at par with the competitors', now they reducing it since it didn't help much (still on par with competitors tho). They have also been talking bout e-commerce, recently they finally incorporated a company for that purposes, another promise fulfilled.
All in all, i gave my trust, appreciate if anyone been to their AGM can share.
-Net-net value RM0.22~0.24 -If take into account fixed assets should trade at RM0.94, which is the NAPS -However, considering many ppl not looking good at their profit prospect, it may not trade at NAPS, at least take into account their unimpressive profits, it should worth RM0.26
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Wong Kah Wei
786 posts
Posted by Wong Kah Wei > 2018-03-29 10:41 | Report Abuse
macam game over