Eratat Lifestyle

skeptic u r right, when dealing with china biz hv to be very careful, cannot just see n beleive. i heard many sporean kena con bcos they saw got black n white written so beleived.

To Momoeagle, elbert, chinsoonyuen, skeptic, rock, and greenrookie

Let’s put it this way

Facts
1) LJC + mother/brother in laws were net sellers (but were at higher price) – the share prices were higher then
2) YSC had sold all of his stake at 13.8 cents
3) Eratat has issued bond/warrant at effective 24 % interest rate (after offsetting tax)
4) LJC has pledge all his shares to secure the issuance of the bond/warrant.
5) The market agreed it didn’t make sense to borrow at such high cost.
6) The market didn’t like YSZ selling out his stake
7) Therefore, the market has punished the “share price”.
The share price has fallen from around 13.8 cents to 8.8 cents

Questions: The above were HISTORIC facts which the market knew. And based on the above KNOWN facts and its current fundamentals - at what prices (8 cents, 7, 6, 5, 4, 3, 2, 1 cent) would you invest in Eratat? Or never invest at all?

Base on those facts, it is already sufficient that I won't invest in this counter at all.

The time value of $$ is much more important. Sure, there might be a 100% or 200% realisation of value ONE DAY. But by then, a safer 15% compounded over few years would have yield similar gains, if not more. Going by this and what I know, why would I even want to invest in this company?

So how about you? How much percentage of your portfolio is in Eratat at all? Are you even considering to buy now?

Of course, if you are looking for a punt based SOLELY on share price, go ahead. I have no comments.

If you are trading the counter based so closely on the difference between 1 cents to 8 cents, I have no comments too. I'm looking at a horizon of years.

Of course if it goes to 30 cents, good for all buyers here, and I am happy for small retailers who gained. But for me, I rather give it a miss and stick to safer ways which has the potential to yield just as well. If Eratat ever does reach 1 cent, I believe there will be even less people who dare to buy.

Momoeagle, what % are u in cash n stock now?

hi UB40,

from the way you phrase the qn, I think you are trying to tell us that the market has already priced in the bad news, so how bad can it be?

I will not invest in the company regardless of the price, Simple, I have doubts about the authenticity of the business, so all valuation is meaningless.

Put in simply, if Eratat business is without doubts (I am not suggesting any monkey business, but I have doubts due to KNOWN, HISTORICAL red flags), valuation is too low for this company even at 16 cents.

If Eratat business is not what it seems, whats the point talking about numbers.

What cause doubts?
-Hugh insider selling
-Still high receivables
-exorbitant interests
-Have not deliver on the promise of new distributors
-Have not deliver on higher margins of "brand building"

The weak price do not cause doubts, I look at business first, then price

What can clear my doubts?
-If I live in China, I know the shops are there, I know my friends are buying and saying things good about that.

If there is doubts, it must be cleared, otherwise all business assumptions make no sense.

If business assumption make no sense, the valuation I have of company is zero.

You can make of the valuation as you like, if you can prove the business is really making inroads in China, I can tell you 20 cents is cheap.

For me, I invest, I dun gamble. Did you went down and see the shops? Only those at Shanghai? You went to several shops at several provinces? Talk to the salespersons? You ask someone to go for their recruitment?

If you have done things like those, or something to that effect, you would be screaming with joy about the price, you would be buying more and more when prices go down.

If Eratat is 4-5 cents now, will you be ready to buy more? If you hesitate, you are not sure yourself. I am quite sure if the fundemental does not change, I will buy all the counters i Owned if they are at half price.

UB40 I'm not sure what significance the fact that Lin's family sold at a higher price (12.5 cents) is. If you tell me they had been net buyers at 12.5 cents, which is substantially higher than the current price, then okay that means something. But that's certainly not the case. What's more, do you even see Lin or any insider buying at the currently very low price? No. Even when the price went to as low as 5.5 cents in March 2009, they did not buy.

Did you know that in April 2008, when Eratat IPOed, one year before Lin's family became net sellers of Eratat at 12.5 cents, Eratat actually IPOed at 30 cents?! Yet one year later, they were more than happy to sell at a mere 12.5 cents, 60% below IPO price!

This and many other factors don't give me any confidence to invest in this company.