2 companies caught my attention.
Pacific Healthcare and united fiber.
Both are loss-making, YET
United fiber
Attract falcon capital to subscript to the shares (worth 178 millions) for plan of a further aquisition of a mill.
Contruction Poh lian, the wholly subsidary of united fiber is still able to win building many contracts, the most recent one from HDB, with the HDB announcing more flats to be build in the coming years, demand should remain bouyant, it also secure contracts for construction of private condos
Most of the loss pertiaing to its pulp and mill business is due to paper losses from revaluation of their assests with no impact on their cash flow
Indonesia ruppee is rising against US dollars, from the management words, this should improve valuation of their assests in indonesia. US dollars is not expected strengthen anytime soon with fed comtemplating more monetary easing policy.
Pacific Health care
Attract 2 investors, affluent healthcare holdings (approx 5.81 million)and al-faiz (8 million dollars).
setting up a cancer hospital with the lastest equipment next year, manu new centers such as breast care unit and thyroid, neck and head unit launch in2009, makes JV to bangkok
heathcare sector set to grow with the ageing population and medical tourism should remain robust with record vistors arrivals.
loss in revenue mainly due to the fallout in the investment of singapore heart, stroke and cancer center.
However, these 2 stocks are not for the faint hearted,
united fiber has a lawsuit against it, although they are contesting it and falcon capital has step in to help
there is no gauarantee that the many expansions plans of pacific will start generating profits soon.
With the high risk, comes possibly high returns, one just have to remember the many loss making companies that turnaround, and the correspond increase in shares price, besides the tech companies as example, one need just to reminded about OSim to decide if its worth the risk
If u ask me, the turnaround story of this company should be in justbeforeJan when it wins a letter of demand against it's subsidary. the Q2 has already turn a profit but the stock didn't seem able to take off. I am sorry, I urge caution with this counter. If the Q3 results do well above expectations we might see a rally. However looking at the last 2 quarter reports, there is no significant increase in inventory and their cash cycle is about 100 days. So I don't foresee a Hugh improvement in earnings in Q3. In terms of net assets and cash holdings I agree that this stock is cheap. However as this an s chip there is some discount effect on it. The financial situation is somewhT similar to another stock china paper which I wrote about. Hugh cAsh Hugh discount to assetS yet china paper hardly move, in fact it's prices drop after I mentioned it in another forum despite having strong expansion plans . That's the problem with s chip
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