Sino Grandness

(12-12-2014, 05:17 PM)leeeta Wrote:

(12-12-2014, 01:17 PM)Tiggerbee Wrote:

(12-12-2014, 10:55 AM)leeeta Wrote: Dont think it is UOBKH as a whole but some individuals

1. if SinoG is fake, then Mr Huang is a very skillful conman. Too skillful that he is even able to con old hand Mr Mahagitsiri who is in the business for donkey years..and not only that, he must have cast some strong spells to get them lock up shares for 10yrs. The lo quat juice spell must be very potent that even Mr Mahagitsiri made up his mind to invest after a sip.

With the placement (approx. $40M if offer price is 50cts), SinoG now would have an enlarged shares of 670M and they have to fork out $10M dividend every year as required. $10M a year for $40M one time - not a good business deal. So whats the catch - Could there be a JV in the making? Expansion to Thailand or SEA or even business network ..Nestle comes to mind..???!!! Is Huang looking for further growth/expansion through this partnership?

2. Ok, lets say they manage to fake it in China because whole China is fake. But to take this to another level - Hong Kong, I dont think they can succeed if they are fake. I dont see how they can get past Wellcome HK which is controlled by Dairy farm and Hinsang, a listed company in HK , their appointed distributor. Dont these guys do checks as well? By the way Wellcome have stores also in China, they would have gotten information on the products and the sales figures.

3. The ipo process... - I bet that the IPO Mgr has read the shortseller report and would have done triple checks. Dont you think he or she is stupid? He/She would have resigned by now if there are any fraudulent figures. More info on the IPO here.. http://www.nextinsight.net/index.php?opt...5&Itemid=1

There are so many s chips that are suspended. Did their ipo underwriter carried out their due diligence? On the other hand, you can't assume all s chips are dubious due to a few black sheep. That's why we should be very careful and do our due diligence when investing in stocks with a short listing history. A fraudulent company is unlikely to withstand the test of time. I prefer investing in companies with at least 10 years of listing history.

For me, Sino Grandness has very poor corporate governance so I avoid this stock no matter how cheap it is. It also score "poor" in its ability to manage its cash flow.

i hope you are not into companies like IPCO, Creative, Uniber etc..they hv withstood the test of time but share price keeps on spiraling down. IPCO was a blue chip before..but share price kaput.

Perhaps you can enlighten me why you say that they hv poor corporate governance, I may change my position if its really true.

I like the fact that The CEO flies down to SG for every Qtrly financial report briefing, How many of S-chip's ceo does that? and he was here the next day after the shortseller report was out to calm investors confidence.

You are right that cash flow is a problem but shareholders were briefed that they are growing rapidly and they needed cash for expansion. So whatever they earn is pile back. With the placement to the Thai's, they have more now for cash in the pocket. Cash from Thaicoon are not meant to pay off the CB holders..understand during the briefing that if the IPO is delayed of does not go through for whatever reason they will get a bank loan to pay off CB holders when CB is due.

Never had I once bought any shares of the 3 companies you mentioned as they do not deserve my attention. I'm only interested in good companies that deliver more than 10% ROE consistently over time and maintain their profit margin, and will only invest in them when their stock prices are beaten down. Then again, I'm a trader investor so I take position when the technical signals are right, even when valuations are not that cheap. But I made sure that I adhere to my profit taking and cut loss targets. Currently, all the stocks in the Sg market are only good for short term trades in view of their high valuation (based on projected CAGR historical valuations). Those stocks that are cheap like Sino Grandness are cheap for a good reason.

Why I said Sino Grandness has very bad cash flow management? The management is fully in control of their own investing cash flow needs, and is full aware of their poor operating cash flow issues, but they choose to place all their hopes on the Garden Fresh ipo to fill the gap in their financing cash flow needs. They did not have a contingency plan in place in time, and ended up having to issue new shares at a steep discount to fullfill their cash flow needs. They could have avoid this misstep if they had plan properly for their cash flow needs.

On corporate governance, they failed miserably on the principle of disclosure and transparency.
1) They do not provide regular updates on the progress of the Garden Fresh ipo to stakeholders.
2) Their IR portal is as good as not having one as they don't update it at all.
3) Their response to the short seller report is way below satisfactory level. Has the stock price rebounded after their response?
4) Where are company share buy backs when the share prices fell to such "attractive valuations"? Why approved the share buy back mandate in the first place? And why did the CEO stop buying shares?

Now that the stock price is so beaten up, they will be at the mercy of the banks and their prospective investors.

Well said TigerBee . I can only say The Best of Luck to those who are still vested in Sinograndness . Hope your money will not be wasted ...

Tiggerbee Wrote:Never had I once bought any shares of the 3 companies you mentioned as they do not deserve my attention. I'm only interested in good companies that deliver more than 10% ROE consistently over time and maintain their profit margin, and will only invest in them when their stock prices are beaten down. Then again, I'm a trader investor so I take position when the technical signals are right, even when valuations are not that cheap. But I made sure that I adhere to my profit taking and cut loss targets. Currently, all the stocks in the Sg market are only good for short term trades in view of their high valuation (based on projected CAGR historical valuations). Those stocks that are cheap like Sino Grandness are cheap for a good reason. Why I said Sino Grandness has very bad cash flow management? The management is fully in control of their own investing cash flow needs, and is full aware of their poor operating cash flow issues, but they choose to place all their hopes on the Garden Fresh ipo to fill the gap in their financing cash flow needs. They did not have a contingency plan in place in time, and ended up having to issue new shares at a steep discount to fullfill their cash flow needs. They could have avoid this misstep if they had plan properly for their cash flow needs. On corporate governance, they failed miserably on the principle of disclosure and transparency. 1) They do not provide regular updates on the progress of the Garden Fresh ipo to stakeholders. 2) Their IR portal is as good as not having one as they don't update it at all. 3) Their response to the short seller report is way below satisfactory level. Has the stock price rebounded after their response? 4) Where are company share buy backs when the share prices fell to such "attractive valuations"? Why approved the share buy back mandate in the first place? And why did the CEO stop buying shares? Now that the stock price is so beaten up, they will be at the mercy of the banks and their prospective investors.

I've learnt over the years and from my investing experience to be highly doubtful of companies which are in industries where there are low barriers to entry, or which have not much of a competitive moat. This can be done through a qualitative assessment of the industry a Company is in (e.g. retail, fruit juices, consumer goods etc) or purely from the numbers alone (high ROE and ROIC usually do imply the presence of a franchise or moat, but not always).

A simple screen should suffice to determine whether a Company even looks attractive enough to be considered for further research.

Qualitative Aspects

1) Five-Forces Model
2) SWOT Analysis
3) PEST Analysis

Quantitative Aspects

1) ROE/ROIC
2) Margins
3) FCF Generation
4) Revenue and NPAT Growth

If a Company looks unattractive on these metrics, there's really no reason to waste time by diving deeper unless you feel that i) it is an asset play (i.e. undervalued assets) or ii) there is an event-specific catalyst independent of the poor financials/fundamentals.

I would like to add that an experienced investor is also one that is in business in order to understand the business cycle which is normally a reflection of how stock market will perform. Otherwise it's mostly talking strategy on paper. For example how much do you know about food business when you are not in the f&b business. If through reading AR or visit the restaurants or read the background of the mgmt can make you a f&b expert investor, then one is fooling himself.

^^ You just need to understand the business model properly and thoroughly. Practical experience definitely helps but fine details are not really needed.

"I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside. There would, of course, be the occasional bad crop, and prices would sometimes disappoint. But so what? There would be some unusually good years as well, and I would never be under any pressure to sell the property. Now, 28 years later, the farm has tripled its earnings and is worth five times or more what I paid. I still know nothing about farming and recently made just my second visit to the farm."

http://fortune.com/2014/02/24/buffetts-a...vestments/

(14-12-2014, 04:24 PM)Tiggerbee Wrote: Why I said Sino Grandness has very bad cash flow management? The management is fully in control of their own investing cash flow needs, and is full aware of their poor operating cash flow issues, but they choose to place all their hopes on the Garden Fresh ipo to fill the gap in their financing cash flow needs. They did not have a contingency plan in place in time, and ended up having to issue new shares at a steep discount to fullfill their cash flow needs. They could have avoid this misstep if they had plan properly for their cash flow needs.

On corporate governance, they failed miserably on the principle of disclosure and transparency.
1) They do not provide regular updates on the progress of the Garden Fresh ipo to stakeholders.
2) Their IR portal is as good as not having one as they don't update it at all.
3) Their response to the short seller report is way below satisfactory level. Has the stock price rebounded after their response?
4) Where are company share buy backs when the share prices fell to such "attractive valuations"? Why approved the share buy back mandate in the first place? And why did the CEO stop buying shares?

Now that the stock price is so beaten up, they will be at the mercy of the banks and their prospective investors.

Good points, and duly taken. They could have done much better and would not end up in today's position.

I have just 2 points to add to the discussion:

1) While short term "investors" are banking on the IPO to unlock value, I am not sure if the success of the IPO is crucial to the survival of the company.

2) Look at the clause in the EGM notice below:

Quote:approval be and is hereby given, for the purpose of Rule 811(3) of the Listing Manual,
for the Company to allot and issue to the Subscribers 86,000,000 Placement Shares
at:
(a) S$0.50 per Placement Share; or
(b) the volume weighted average price per Share traded on the SGX-ST on the last
market day immediately preceding the date of Completion,
whichever is the lower (“Issue Price”) in accordance with the terms and conditions of
the Subscription Agreements dated 1 October 2014 (as amended by the Supplemental
Deeds dated 29 October 2014) between the Company and the Subscribers; and

I think stakeholders are probably saving ammunition for the last market day (very weird clause in my opinion), which will determine the fate of this transaction.

Again, I do not think whether the deal go through or not will determine the company's survival, because the company seems well position to make more bank loans given its current cash flow and debt level.

All these, assuming their books are real of course.

(vested)

(14-12-2014, 04:24 PM)Tiggerbee Wrote:

(12-12-2014, 05:17 PM)leeeta Wrote:

(12-12-2014, 01:17 PM)Tiggerbee Wrote:

(12-12-2014, 10:55 AM)leeeta Wrote: Dont think it is UOBKH as a whole but some individuals

1. if SinoG is fake, then Mr Huang is a very skillful conman. Too skillful that he is even able to con old hand Mr Mahagitsiri who is in the business for donkey years..and not only that, he must have cast some strong spells to get them lock up shares for 10yrs. The lo quat juice spell must be very potent that even Mr Mahagitsiri made up his mind to invest after a sip.

With the placement (approx. $40M if offer price is 50cts), SinoG now would have an enlarged shares of 670M and they have to fork out $10M dividend every year as required. $10M a year for $40M one time - not a good business deal. So whats the catch - Could there be a JV in the making? Expansion to Thailand or SEA or even business network ..Nestle comes to mind..???!!! Is Huang looking for further growth/expansion through this partnership?

2. Ok, lets say they manage to fake it in China because whole China is fake. But to take this to another level - Hong Kong, I dont think they can succeed if they are fake. I dont see how they can get past Wellcome HK which is controlled by Dairy farm and Hinsang, a listed company in HK , their appointed distributor. Dont these guys do checks as well? By the way Wellcome have stores also in China, they would have gotten information on the products and the sales figures.

3. The ipo process... - I bet that the IPO Mgr has read the shortseller report and would have done triple checks. Dont you think he or she is stupid? He/She would have resigned by now if there are any fraudulent figures. More info on the IPO here.. http://www.nextinsight.net/index.php?opt...5&Itemid=1

There are so many s chips that are suspended. Did their ipo underwriter carried out their due diligence? On the other hand, you can't assume all s chips are dubious due to a few black sheep. That's why we should be very careful and do our due diligence when investing in stocks with a short listing history. A fraudulent company is unlikely to withstand the test of time. I prefer investing in companies with at least 10 years of listing history.

For me, Sino Grandness has very poor corporate governance so I avoid this stock no matter how cheap it is. It also score "poor" in its ability to manage its cash flow.

i hope you are not into companies like IPCO, Creative, Uniber etc..they hv withstood the test of time but share price keeps on spiraling down. IPCO was a blue chip before..but share price kaput.

Perhaps you can enlighten me why you say that they hv poor corporate governance, I may change my position if its really true.

I like the fact that The CEO flies down to SG for every Qtrly financial report briefing, How many of S-chip's ceo does that? and he was here the next day after the shortseller report was out to calm investors confidence.

You are right that cash flow is a problem but shareholders were briefed that they are growing rapidly and they needed cash for expansion. So whatever they earn is pile back. With the placement to the Thai's, they have more now for cash in the pocket. Cash from Thaicoon are not meant to pay off the CB holders..understand during the briefing that if the IPO is delayed of does not go through for whatever reason they will get a bank loan to pay off CB holders when CB is due.

Never had I once bought any shares of the 3 companies you mentioned as they do not deserve my attention. I'm only interested in good companies that deliver more than 10% ROE consistently over time and maintain their profit margin, and will only invest in them when their stock prices are beaten down. Then again, I'm a trader investor so I take position when the technical signals are right, even when valuations are not that cheap. But I made sure that I adhere to my profit taking and cut loss targets. Currently, all the stocks in the Sg market are only good for short term trades in view of their high valuation (based on projected CAGR historical valuations). Those stocks that are cheap like Sino Grandness are cheap for a good reason.

Why I said Sino Grandness has very bad cash flow management? The management is fully in control of their own investing cash flow needs, and is full aware of their poor operating cash flow issues, but they choose to place all their hopes on the Garden Fresh ipo to fill the gap in their financing cash flow needs. They did not have a contingency plan in place in time, and ended up having to issue new shares at a steep discount to fullfill their cash flow needs. They could have avoid this misstep if they had plan properly for their cash flow needs.

On corporate governance, they failed miserably on the principle of disclosure and transparency.
1) They do not provide regular updates on the progress of the Garden Fresh ipo to stakeholders.
2) Their IR portal is as good as not having one as they don't update it at all.
3) Their response to the short seller report is way below satisfactory level. Has the stock price rebounded after their response?
4) Where are company share buy backs when the share prices fell to such "attractive valuations"? Why approved the share buy back mandate in the first place? And why did the CEO stop buying shares?

Now that the stock price is so beaten up, they will be at the mercy of the banks and their prospective investors.

Agree that there are room for improvements and certainly will convey to them at the EGM on the need to improve. But there is no doubt...they are a going concern with real growth. Only price sucks for now...and time will tell.

If the company has communicated so well with the investment community, the price wont be what it is today. Most of the other s chip and h chips, inclduing those i have vested, also have same problem and that mostly explained why the prices are so depressed despites having low pe, low pb, hi roe, consistent cash flow and min debt. Im fine with this actually, so long as the management is focusing on growing the business rather than spending time doing road shows and talking up the company's prospect on every opportunity.

The market is a voting machine today, and u and me are voting for it, weighing machine in the long run. So if you buy a diversified portfolio of these cheap chips, and if just 5 out of 10 of them have done well on a longer run, im happy, becuz when they did well, they really fly high high.

After looking into their Qtr Report and AR, this company looks financially sound especially it's NAV seems to be higher than market valuation...

One thing i'm concerns will be that:
1) How will the placement shares affect the entire shares holding especially to it's price and value of the coy?
2) How will failure of the IPO of the garden branch affect it's holding?

Hi!

I was looking into sino grandness top 20 shareholdings.

Don't seem to be able to see the Chairman's name in it. But when i scroll down, it is said he have a direct interest of 40.13%?

Anyone knows how how does it work out?

Thanks!