Monday, June 6, 2011

Some June news

I was talking about Guangzhao bio forest (G21 SGX) to some of the readers about the following a few weeks back. Their concerns were on the sudden price surge then. (My apologies, I should post it immediately after discussion):
  • Investors, including some well known ones have bought into the counter
  • CEO Song Xue Meng is a former lumberjack, post Arts degree at Beijing university turned finance and business whizz, CFO and GM of Shanghai Sihua plant gene engineering company and Heilongjiang Land Resource Co. (Heilongjiang is Northern China, near Harbin). 
  • The Chairwoman, Su Min has a degree in literature (Zhongshan university), Oriental medicine (Intnl martial arts medical university). She also completed a postgraduate degree in Ethics (Fudan university) in July 2003, just right before assuming the chairwoman post. Shes a former DGM of Shanghai Sihua.
  • I highlighted its doubtful asset valuations and its highly discretionary accounting? 
  • Poor cash flows and need to seek constant refinancing 
  • There was a shift to fertilizers business away from the timber, which sold little since start of firm
  • However firm also wanted a shift to Jatropha agriculture which 0 was heard thereafter
  • Firm also owes US$3.5m to the credit entity of Goldman Sachs
And today, auditors flagged some risks resulting in counter being suspended. In the long run, the market is indeed a weighing machine.

We also talked about Willas Array (W12 SGX), about the oddity of raising cash through rights only to pass it back as dividends. The other candidate is Fuxing China (DC9 SGX) which decision to go for a TDR just makes me wonder if the management is indeed focusing on the business operations or not. 

And guess what, our favourite topic Olam International (O32 SGX) is going to be placing out S$740m new shares at S$2.60 each. Thats the reason for the halt today. Will continue to keep that short up in the portfolio. 

Have a good week ahead.



Nice june news.

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