Soon cash amount with additional cash from sale of land could be reaching close to 20c per share.
Some of the business proposals include building a mall on the land that was sold,goldmine in Australia and many more.
Building of mall was rejected because the required investment was RMB 600 million,it will take some time to build the mall and need to navigate the Chinese bureaucracy and company has not much experience in real estate.Have to wait very long for the completion of the Mall and see returns. Goldmine in Australia was rejected because of the high risk, distance and cultural barrier.
There is also a proposal by one of the top 20 shareholders of China Fibretech I believe it must be Pu Wei Dong from Triumph Capital asset management who is also the CEO of Sinopipe.
Management is evaluating all proposals and the Independent directors are also vetting the proposals to make sure they are in order and exercise proper risk management. Independent directors emphasized that good rate of returns from new investments and safeguarding and proper utilization of the cash in bank are their highest priorities.They too want to see the shareholder value uplifted through sound investment and good rate of returns on investment.
I believe China Fibretech is in sweet spot during this economic downturn in China because during downturn cash is king. You can buy assets at beaten down prices as the demand is slow supply is high due to no takers.
China Fibretech maybe able to buy over a company at a beaten down price.The management is also considering taking over a company with an experienced management set up.
As the CEO is not English speaking most of this information was disseminated in English with consultation with the CEO by the side during the EGM. The independent director MR Lim Yoke Hean who is Singapore based,chaired the whole meeting giving more credibility to the information received as most information was already discussed with the CEO during the Board of Directors meeting.
I again want to emphasize the cash is very real as during the EGM I did query very harshly about the cash and the Independent Director Lim Yoke Hean vigorously defended and said that just few days ago he had personally visited the bank to verify the deposit and for more than a year they have a system where the directors ,the auditor and Senior Financial Manager do random check online with the bank just like internet banking but not authorized to withdraw the money.The money is placed with one of the top 3 banks in China.
Company is conserving cash at the moment so that they can have more options for their diversification but CEO has indicated he will look into share buy back for the current quarter. Besides the share buyback the main emphasis is to embark in a new business with good returns that will more vigorously prop up shareholder value.
Its very good that Mr Lim Yoke Hean is an independent director in the company as he has many years experience in the financial market . He was a CEO of Pheim Asset management.
Mr Lim Yoke Hean Profile
director / advisor
Aljo Consults (Singapore) Pte Ltd
July 2010 – Present (4 years 4 months) Singapore
ALJO works with clients to improve operational efficiency and profitability.
As a specialist, ALJO Consults’ contributions to the resource optimisation initiatives of businesses in various industries have left sustainable productivity improvements at small and medium firms as well as multinational organisations. Some of these companies spread throughout China, Hong Kong, Taiwan, Philippines, Thailand, Malaysia, Singapore, Indonesia and Australia include:-
Volex, UGA Home Appliances, Warners Electronics, Beckers Shanghai, Taiping Insurance, Hsin Chu Bank, Zuellig, CP Group, Siam City Cement, Khrung Thai Insurance, Summit Auto,National Utilities Board, Petronas, Sunway Group, Mardec, Megapower Cables, Guppy Industries, Dayatera Roof, Sembawang Group, Mammoet, UIC Group, Pertamina Group, Salim Group, Bimantara Group, Sinar Mas Group, Asean Fertiliser, B&W Hypermarket (Sweden), Nestlé (Denmark), Matshushita, Ajinomoto, Brothers, TDK, Sharp, Foster, Omron, Sony, Fujitsu.
To demonstrate the confidence in our value add service to clients, ALJO offers all its clients the option to terminate our service with one week's notice without financial penalty.
Director
World Precision Machinery Limited
July 2010 – Present (4 years 4 months) Jiangsu, China
World Precision is SGX listed.
Serves as one of its 3 independent directors and chairs the nominating and remuneration committees
Direcrtor
China Fibretech Limited
July 2012 – Present (2 years 4 months) Fujian, China
China Fibretech is SGX listed.
Serves as one of its two independent directors and chairs the audit committee.
CEO
Pheim Asset Management (Asia) Ptd Ltd
June 2012 – June 2013 (1 year 1 month) 43, Duxton Road
Tasked to provide stability and leadership to the shop. At the same time, reviewed and revamped operational and compliance procedures.
At the point of departure in June 2013, AUM was USD120m and year to date fund performance was some 10% above benchmark index.
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