Changtian Plastic & Chemical

From Third Quarter Financial Statements Ended 30 September 2011 : Q32011


Cash-asset value = cash - all liabilities (000 RMB) :
Cash-asset value = 811,225 + 92,982 - 43,623 - 7,000 = 760,692

Cash-asset value per share = 904,207,000 / 660,000,000 = 1.37 RMB or about 0.274 sgd.

Share closed at 0.06 sgd as at 4/11/2011.

Wow, it's a net-net.

Not vested

Can someone explain the pros and cons (towards the investor) of companies incorporated in Bermuda? Thanks!

Does looks interesting and worth exploring deeper. If cash is real, then it is a 4-bagger on cash alone. However, on a glance, it seemed like their business is quite bad while management don't seem to have any initiative in creating value for shareholders - notice that all their announcements are just result release.

Just thinking out loud but for a potential fraud, it seemed like there is always a need to inject in cash (e.g. share placement, second listing elsewhere, etc). If CPC doesn't do that, maybe it might be possible that the cash is real. Anybody vested and attended their AGM before?

don't read too much into the Bermuda thing. I reckon lots of other companies are registered there too. I think if it's a fraud then no matter what, it will be hard for retail investors to detect. For CPC's case, I think more important to compare upside gain against downside risk. Assuming cash is real, a potential problem can be the business burning off spare cash before it is given as dividend to shareholders

i'm also interested in knowing why most s-chips are registered at funky far-flung islands.

i think almost all of the small cap s-chips are trading at extremely low book value. while there's no easy way to know if the cash is real (apart from conducting special audits), there are ways to figure if they're cooking the books. if a company calls cash frequently, holds unwise amounts of debt, do not declare dividends, or generally behaves like it is a cash-poor company when it should be cash-rich, you should be wary. a number of s-chips have been reporting losses, maybe they're paring down their inflated cash levels?

i think in general it helps to look at as much numbers as possible and see if they make sense in relation to each other. d.o.g. has recently unearthed a few inconsistencies in qingmei.

as for changtian's attractiveness, i think there are other non s-chips which are trading at 60-75% discount to book value. just looking at the valuation numbers alone, there are definitely better (or safer) options out there.

(08-11-2011, 09:22 PM)karlmarx Wrote: a number of s-chips have been reporting losses, maybe they're paring down their inflated cash levels?

I noticed that too. Besides paring down the cash, they are probably trying to clean up their books.

Xiamen company some more

Theres an S-chip called Fujian Zhen Yun. It was once in trouble with their accounting and seemed to have solved it to some extent. You guys may want to check it out. The company have a huge horde of cash compared to its market cap. It recently announced an interim dividend. Could the cash be real? I'm not sure still!

If my coy is trading at 1/3 of its cash level, I would be an idiot not to privatize it ! Even if the offer fails (due to 10% blocking), at least it shows my intention to the market and gives confidence to the financial statements and the company as a whole. I think there are better S Chips with much healthier growth and dividend history.

(09-11-2011, 01:13 PM)Nick Wrote: If my coy is trading at 1/3 of its cash level, I would be an idiot not to privatize it ! Even if the offer fails (due to 10% blocking), at least it shows my intention to the market and gives confidence to the financial statements and the company as a whole. I think there are better S Chips with much healthier growth and dividend history.

Nick possible to provide some examples of S Chips?

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(09-11-2011, 01:25 PM)Behappyalways Wrote:

(09-11-2011, 01:02 PM)secretinvestors Wrote: Theres an S-chip called Fujian Zhen Yun. It was once in trouble with their accounting and seemed to have solved it to some extent. You guys may want to check it out. The company have a huge horde of cash compared to its market cap. It recently announced an interim dividend. Could the cash be real? I'm not sure still!

FYI
http://www.valuebuddies.com/thread-549.html

Let me do a survey just out of curiosity. If there's a potential that the company might be fraudulent in their accounts or had been fraudulent in the past but somehow 'solved' the problem, would you, as a value investor, buy it even at extreme low prices (i.e market price at 1/3 cash (net of all debts)).

VB members have previously done their research on this "gem". But interestingly no one has continued their update.

In its latest Q3 report, Changtian is still profitable but that is not the key point. On its B/S, it has 31.96M RMB long term deposits and 963.758M RMB of short terms deposits and cash!!! That is 210.8Million SGD cash !!! Its current share price is only 0.045 cents/share, giving a market cap of 29.7M.

<Do note I am being sarcastic>

The group has been doing well since Q32011.

Data from Q32014 financial results : http://infopub.sgx.com/Apps?A=COW_CorpAn...uddies.com
Cash is burgeoning to 963,758 RMB. At company level, the cash is nil.
Cash-asset value = cash - all liabilities (000 RMB) :
Cash-asset value = 963,758 - 22,162 - 7,000 = 934,596

Cash-asset value per share = 934,596,000 / 660,000,000 = 1.41 RMB or about 0.3 sgd.
Current share price is 0.045 sgd.

If I were the controlling shareholder, I would have privatised the company long ago.
Don't know what to say liao for such "undervalue" stock.

Sorry, I overlook that 31.96M RMB long term deposits.

<not vested>