SGX is a also a business-driven company, I seriously doubt SGX has the means or the will to protect the sharesholder,it is really investor beware.
1) Look at China Sky, there is still no proper closure, the only thing SGX can do is ensure that shares stayed suspended, they initial a lawsuit but back out of it.
2) When news/ rumors start that QIngmei has ceased its operations in CHina, i send an email to SGX, alerting them to the article and that the fact that there is no announcement from QIngmei. Their reply is: we take prompt announcement seriously, maybe you can check with their investor relationship.. Hello, who is the regulator here??
Looking that the prosepctus of some the IPOs listing in SIngapore recently, such as REligare,they allow listing of companies with pending lawsuit against the land of which one of the hospital is located. If you read some forums anaylsied the recent greater maple china reits, u will realised there are many issues and risks such as property still under devlopment and under-ultilisation of shops area.
For SGX, as long as companies state upfront what are the risks and there are no unlawful/suspected unlawful activities involved, they will just let the company list.
The investing world is like a jungle, at least SGX operates like the rules of the jungle, those who wish to hunt must do their homework and equip themselves with the right skills. If you can't stomach the risk of losing everything, stay clear of s-chips. If you can stomach losing everything and have a sound plan, the rewards might be immense. But 1 thing is for sure, you are on your own, forget about SGX or ID watching your back
Now back to chinafibreT:
Besides the red flags such as non dividend payment, departure of CFO etc, you honestly have to ask yourself why:
Interest payment for deposits is only 1.9 million when that have 400 million cash???
Given that they have no immedate plan for capex, and plain simple 1 yr fix deposit with no risk of whatsoever should yield at least 2-3% (checked deposit interest in china online ). If they put half the money 200 million rmb into fixed deposit yielding 2.5%, they will still have a very big buffer of working capital and 240 million rmb. And the other income no matter how patry should add to be at least 5 million rmb a year, not 1.9 million. What are they not even doing this?
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3 to 5% interest yield is quite common in China even on 30 days basis. If it is the case of 1.9 million for 400 million that is less than 0.5% return???
Personally i think many of the information give here are facts given that
1) The CFO really have left the company.
2) There is no dividend declared despite the 400 mil cash
3) Ton of money sitting in the bank, not deployed and not properly utilized, leaving in the bank with close to zero return while we have high inflation rate in China.
4) While we do not say that there is any unlawful activities, it is clearly the case that management is not performing up to expectation.
Thank you for your kind reminder, I will be more careful with my words, and have removed offensive remarks. I, however, did not pluck the figures from the sky, I quote from their full year results report below:
Otherincome
Other income increased by 11.7% from RMB5.2 million in FY2011 to RMB5.3 million in FY2012
which was mainly attributed by higher rental income arising from increase in number of tenants
and rents as compared to FY2011.
Despite the increase in cash and bank balances, the slight decrease in interest income from
RMB2.0 million in FY2011 to RMB1.9 million in FY2012 was due to lower bank saving interest
rate revised by the PRC government beginning July 2012.
If you look further, and compare more quarters reports, you will understand better. I did not hint of illegal activities, if there is construed by readers, my apologies. But theie is no denying of fact that hugh cash is not put into optimising use
Since the debate is getting heated up maybe we all should shoot a letter separately to SGX to probe into the company and the rationale behind company's decisions like how they deploy the cash,share buybacks,dividend policy,the effectiveness or how independent are the independent directors. Whether the company's financial officer doing his job right in advising the company to do the common sense or logical thing like share buybacks at this ridiculous price or put the money in fixed deposits which will benefit all loyal shareholders.
Share buyback in the case of this company will give very high return. Better than running the business.you are buying 21c per share NTA at 4c.17c profit per share.10milion shares buyback will give $1.7million profit.Does the Chief Financial officer know about it or what?When the share price goes up the company can place back the shares in the market at higher price for a profit in the future and bringing in good returns to cash.
If you did not need the money urgently why earlier did not put the money in Fixed deposits which would have probably brought the company to profitability in the last quarter. After so long only now the company has decided to put some cash in fixed deposit.
Why is the company still having a loan of Rmb 50million and pay high interest rate on loan when they hv the means to pay back and don't hv urgent need for cash. Even this action could hv brought the company back to profitability in the last quarter.
What has been the CFO doing all this while not looking at how effectively can the cash be deployed even during the downturn? I agree that during a downturn cash is king but letting it idle is silly when there are opportunities to safely deploy it like cheaply buying back the shares or putting in fixed deposit.
This simple logic you dont need to be an accounting graduate to understand it. Why didn't the CFO give the CEO the right advice?
Anyway based on the last quarter financial report and the prospect given during AGM company is expected to do well for the current quarter.
Company processed 839 tonnes for the month of March which was the highest monthly sales volume since June 2011 when they were very profitatble and higher than total combined processing for January and February of 761 tonnes.
Company have 8 new customers who had contributed 17.5% of total revenue.
Average processing price has also gone up by about 10% due to introduction of new products.
Said CEO Mr Wu: "The local authority is not issuing new licences for this industry and existing operators have to comply with more stringent anti-pollution regulations. Many small ones will be weeded out and this will be beneficial to our company."
"I see a pickup in business and expect it to continue for the NEXT THREE YEARS. "
Cash or RMB 439 million which is above 17c per share is very real and verified by external auditors and monitored regularly by the audit committee and independent directors.
If the momentum of March continues or even accelerate further we can expect to see a significant turnaround in the profitability.
Hopefully, at least the fundamentals will start pushing the share price up and whoever silently collecting at this ridiculously low price will use it as an excuse to push the price up.
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