G. K. Goh Holdings

how did u work out the cash pile to 90cents a share?

Took their cash and cash equivalents (from their last quarterly report) plus proceeds from the sale of E & O and divide by the total no of shares. Just looked at their cash flow statements and noted that a sizeable amount are from creditors- am not sure what or who these creditors are but suspect they are customers who have deposited their funds with the company for management. The company is in a net cash position of about $31 mil which when added to the cash that will accrue from the sale of E&O shares will be about $0.41/share (barring further devaluation of the ringgit). This is still a significant amount. If I am not mistaken, if one bought the shares at $0.65/share, it means that he would be getting the rest of the business for only $0.24.
Sorry I have to make a qualification that I am no finance expert or investment guru here. Am not sure if the matrix applied here is valid, perhaps there is a different and more sophisticated way of looking at finance companies (GK Goh sold off their brokerage business some years back to CIMB). I hope somebody could educate me on this.
Interestingly, there is an article which appeared in the Star yesterday:http://biz.thestar.com.my/news/story.asp?file=/2011/9/3/business/9420126&sec=business

i couldnt seem to get your post event net cash of $0.41. my calculation (correct me if wrong) is as follows:
Q2 cash holding: $187,818,000
cash proceeds from this event: $99,100,000
Q2 debt level: $18,703,000
net cash per share (based on 317,178,805 shares) = $0.845

(04-09-2011, 04:42 PM)pianist Wrote: i couldnt seem to get your post event net cash of $0.41. my calculation (correct me if wrong) is as follows:
Q2 cash holding: $187,818,000
cash proceeds from this event: $99,100,000
Q2 debt level: $18,703,000
net cash per share (based on 317,178,805 shares) = $0.845

a lot of its cash and cash equivalents is for its future & forex margin requirement, not its money.

so net cash should use cash & cash equivalents minus all its liability.

probably would be around 40+ cents.

The question will be whether GK Goh will distribute part of its proceed or retain all for future investment. if the latter, god bless. its past record is not good.

(05-09-2011, 07:20 PM)freedom Wrote: a lot of its cash and cash equivalents is for its future & forex margin requirement, not its money.
so net cash should use cash & cash equivalents minus all its liability.
probably would be around 40+ cents.
The question will be whether GK Goh will distribute part of its proceed or retain all for future investment. if the latter, god bless. its past record is not good.

thanks that something new i learnt today..i didnt know those cash holdings booked under its current asset in the balance sheet doesnt belong to gkgoh..

(05-09-2011, 09:11 PM)pianist Wrote:

(05-09-2011, 07:20 PM)freedom Wrote: a lot of its cash and cash equivalents is for its future & forex margin requirement, not its money.
so net cash should use cash & cash equivalents minus all its liability.
probably would be around 40+ cents.
The question will be whether GK Goh will distribute part of its proceed or retain all for future investment. if the latter, god bless. its past record is not good.

thanks that something new i learnt today..i didnt know those cash holdings booked under its current asset in the balance sheet doesnt belong to gkgoh..

it belongs to G K Goh, but it also has corresponding liability to repay its clients in its trade creditor. It is just a different way to calculate net cash (can't just simple cash minus debt) rather cash minus its all liability.

I don't think they're that bad as investors. The fact that they're making $51 mil on this one is not bad all. They may be just a little conservative. So have to be patient with this counter- that's what value investing is all about in the 1st place.

(05-09-2011, 09:55 PM)VestedInterest Wrote: I don't think they're that bad as investors. The fact that they're making $51 mil on this one is not bad all. They may be just a little conservative. So have to be patient with this counter- that's what value investing is all about in the 1st place.

I can't agree with you.

for the gain on Eastern & Oriental, E&O was still traded far below Sime Darby's acquisition price. Seems that market does not agree with Sime Darby's valuation. Whether Sime Darby will be the sucker, only time will tell.

As for its other investment, its short/long term investment incurred huge loss/impairment in 2008 - 2009. I don't see huge profit or huge write-back of previous impairment in 2009 - 2010 (a lot of average people made huge profit or recovered quite a lot in 2009 - 2010). So how to justify it is a good investor?

I concede that it has not been that good in deploying its cash in the past but what I am actually implying is that it may not be as bad an investor as you make it out to be. A bad one would be Auric Pacific or Osim (2 years back). In any case, I would not complain too much if the coy is sitting on a huge cash pile, especially in this kind of market. Opportunities will arise and I am sure GK Goh will be in an enviable position this time around with all the cash. Of course, I'd be happy if they distribute some of the cash as well.
The E & O transaction- there is a greater fool in this one. And I don't think it is GK Goh. Have to give them some credit. They could have bought any of the nearly 20 (I think) listed developers in Malaysia but chose this Penang-based one.

The company has make an announcement today to sell its property located at 21 Tanjong Pagar Road, Singapore 088444.

I wonder if is a wise move.