Yangzijiang Financial Holding

[Squirrel]

Then it would mean YZJFH does not have a clear buyback strategy.

Firstly, I notice the buyback volume has no pattern and is erratic. Second, the proportion of buybacks to trading volume has no pattern/ratio. Third during both up/down days, there are buybacks and at various price levels.

My sensing the recent level of lowered share buyback is due to the current buyback speed pushing them very quickly to the 10% mandate. The company may not want to hold a second EGM during the FY or cancel shares to continue utilisng its $200 million warchest

In my humble opinion, the strategy is clear. Buy in at a good price. If a crash happens and lowers prices further, then it’s even more earnings accretive. And I am afraid that’s not something that can be done mathematically. At most, a ceiling of say 25% of daily volume (just for example) can be in place. The remaining would be more day to day discretion.

From my perspective, it’s working great. They have bought back 5% of the company’s shares without pushing up share price. I hope they can buy back 50% of the company accumulatively at current prices. That would be insane! (And probably not much float left. Haha)

[CY09]

Who is interested in the GSS today.

At 0.35, the company is now valued at about 0.3 times its price book. In addition, i noticed during the last 2 days of the previous week, YZJ finance was tepid in its sharebuyback, purchasing only 1 million of shares. Hopefully there is no surprise today and shows they have bought a few shares at the historic low price.

The company is indeed undervalued, but I am beginning to form a thought that the mgmt feels prices are bound to fall lower and are slowing their pace of share buyback.

It dosent help that China is not doing well economically and the loan market there is struggling with growing dissent over the housing delays due to real estate bankruptices. I sincerely hope this does not derail YZJ Finance's plan of setting aside a full $1 billion here (excluding the current share buyback funds and provisions for year end dividends).

[Squirrel]

Who is interested in the GSS today.

At 0.35, the company is now valued at about 0.3 times its price book. In addition, i noticed during the last 2 days of the previous week, YZJ finance was tepid in its sharebuyback, purchasing only 1 million of shares. Hopefully there is no surprise today and shows they have bought a few shares at the historic low price.

The company is indeed undervalued, but I am beginning to form a thought that the mgmt feels prices are bound to fall lower and are slowing their pace of share buyback.

It dosent help that China is not doing well economically and the loan market there is struggling with growing dissent over the housing delays due to real estate bankruptices. I sincerely hope this does not derail YZJ Finance's plan of setting aside a full $1 billion here (excluding the current share buyback funds and provisions for year end dividends).

Bought back 7m shares today. Mind boggling. Another good chance to buy more, and I did. Honestly it’s getting a bit scary but I am trying very hard to see it as GSS.

[Squirrel]

The current price movements on YZJ FH is really interesting so I went to do some digging.

There has been some talk of T Rowe sales been the cause of the price drop from listing.

As per the following announcement, T Rowe had a total of 295,981,100 shares across multiple funds.

https://links.sgx.com/FileOpen/_Form%203...eID=716131

The following T Rowe funds reported holdings on YZJ FH across them with some smaller holdings that I didn’t sift out in their smaller funds. I can’t tally to the total, but I guess there are some holdings in non public funds? The following are for Mar 2022 and Sep 2022 holdings respectively showing a reduction to zero.

T. Rowe Emerging Markets Discovery Stock Fund – 73,546,600

https://individual.troweprice.com/static...hemvq1.pdf
https://individual.troweprice.com/static...hemvq3.pdf

T. Rowe Price International Discovery Fund – 53,653,600

https://individual.troweprice.com/static...hidfq1.pdf
https://individual.troweprice.com/static...hidfq3.pdf

T. Rowe Price International Value Equity Fund – 32,040,300

https://individual.troweprice.com/static...higiq1.pdf
https://individual.troweprice.com/static...higiq3.pdf

All the funds above indicate zero holdings as of 30 Sep. Assuming the funds follow a general house view and sells from all their funds together, they seem to be done with the selling of a very sizeable amount of shares (assuming all 296m, but we won’t know for sure since holders below 5% threshold does not need to report change in holdings).

To date, the company has bought back 239,111,100 shares at a total proceeds of $91,949,032.68, which is per share average of $0.3845 and highest price paid at > $0.50.

That leaves 155m more shares to buy back with an estimated $54m at current price of $0.35. That still leaves a lot of money for further buy backs. This time though, the overhang from T. Rowe gone.

I don’t really try to do any technical studies, but just trying to get my head around why prices have tumbled so far.

[BlueKelah]

The current price movements on YZJ FH is really interesting so I went to do some digging.

There has been some talk of T Rowe sales been the cause of the price drop from listing.

As per the following announcement, T Rowe had a total of 295,981,100 shares across multiple funds.

https://links.sgx.com/FileOpen/_Form%203...eID=716131

The following T Rowe funds reported holdings on YZJ FH across them with some smaller holdings that I didn’t sift out in their smaller funds. I can’t tally to the total, but I guess there are some holdings in non public funds? The following are for Mar 2022 and Sep 2022 holdings respectively showing a reduction to zero.

T. Rowe Emerging Markets Discovery Stock Fund – 73,546,600

https://individual.troweprice.com/static...hemvq1.pdf
https://individual.troweprice.com/static...hemvq3.pdf

T. Rowe Price International Discovery Fund – 53,653,600

https://individual.troweprice.com/static...hidfq1.pdf
https://individual.troweprice.com/static...hidfq3.pdf

T. Rowe Price International Value Equity Fund – 32,040,300

https://individual.troweprice.com/static...higiq1.pdf
https://individual.troweprice.com/static...higiq3.pdf

All the funds above indicate zero holdings as of 30 Sep. Assuming the funds follow a general house view and sells from all their funds together, they seem to be done with the selling of a very sizeable amount of shares (assuming all 296m, but we won’t know for sure since holders below 5% threshold does not need to report change in holdings).

To date, the company has bought back 239,111,100 shares at a total proceeds of $91,949,032.68, which is per share average of $0.3845 and highest price paid at > $0.50.

That leaves 155m more shares to buy back with an estimated $54m at current price of $0.35. That still leaves a lot of money for further buy backs. This time though, the overhang from T. Rowe gone.

I don’t really try to do any technical studies, but just trying to get my head around why prices have tumbled so far.

well done on your research. From what I can see YZJFH just transferred a big shot of shareholder wealth to T. Rowe Price fund via sharebuyback using what cash the company has.

?? Why is only 1 fund selling out and right at IPO??? Will more funds join in?

The t.rowe price funds are discovery and value funds, shouldnt they be HODLers rather than sellers? Its not like those are venture cap funds that are selling at IPO to recoup investment.

[Squirrel]

The current price movements on YZJ FH is really interesting so I went to do some digging.

There has been some talk of T Rowe sales been the cause of the price drop from listing.

As per the following announcement, T Rowe had a total of 295,981,100 shares across multiple funds.

https://links.sgx.com/FileOpen/_Form%203...eID=716131

The following T Rowe funds reported holdings on YZJ FH across them with some smaller holdings that I didn’t sift out in their smaller funds. I can’t tally to the total, but I guess there are some holdings in non public funds? The following are for Mar 2022 and Sep 2022 holdings respectively showing a reduction to zero.

T. Rowe Emerging Markets Discovery Stock Fund – 73,546,600

https://individual.troweprice.com/static...hemvq1.pdf
https://individual.troweprice.com/static...hemvq3.pdf

T. Rowe Price International Discovery Fund – 53,653,600

https://individual.troweprice.com/static...hidfq1.pdf
https://individual.troweprice.com/static...hidfq3.pdf

T. Rowe Price International Value Equity Fund – 32,040,300

https://individual.troweprice.com/static...higiq1.pdf
https://individual.troweprice.com/static...higiq3.pdf

All the funds above indicate zero holdings as of 30 Sep. Assuming the funds follow a general house view and sells from all their funds together, they seem to be done with the selling of a very sizeable amount of shares (assuming all 296m, but we won’t know for sure since holders below 5% threshold does not need to report change in holdings).

To date, the company has bought back 239,111,100 shares at a total proceeds of $91,949,032.68, which is per share average of $0.3845 and highest price paid at > $0.50.

That leaves 155m more shares to buy back with an estimated $54m at current price of $0.35. That still leaves a lot of money for further buy backs. This time though, the overhang from T. Rowe gone.

I don’t really try to do any technical studies, but just trying to get my head around why prices have tumbled so far.

well done on your research. From what I can see YZJFH just transferred a big shot of shareholder wealth to T. Rowe Price fund via sharebuyback using what cash the company has.

?? Why is only 1 fund selling out and right at IPO??? Will more funds join in?

The t.rowe price funds are discovery and value funds, shouldnt they be HODLers rather than sellers? Its not like those are venture cap funds that are selling at IPO to recoup investment.

Whoa, chill dude. You are getting a bit fast and furious with your allegations. Making them sound like questions doesn’t remove the intent.

The T.Rowe funds held YangZiJiang Shipbuilding prior to the spin off. So I would coin them as “unwilling holders” of the spin off entity. There could be 10 reasons why they are selling it, be it the company not meeting specific investment mandates within the company or other rationale. Overall even after selling their shares in YZJ FH, they are doing well in the YZJ complex as a whole. In an implied manner, if they believe in the YZJ SB business, they should believe the balance sheet from accumulated profits is real as well.

This is one of the factors resulting in many people rushing for the same small door when a cinema catches fire. I believe that creates an opportunity.

Of course, I understand you sit on the other side of the fence and respect your opinion.

The company has spent $91m so far, and still have much more to go. I am pretty shocked that you would go to the extent of suggesting the company providing T Rowe with a quick exit to invest in other vehicles. And in your words, imply that it’s before “the company goes sideways”.

Of course, there are conspiracy theories that can be true. But in an open forum like this, I do think it would be prudent to make statements only when you can back it up. No point getting embroiled in legal matters for hasty comments.

[Squirrel]

Btw, just a clarification. I believe the announcement by T. Rowe is for aggregated holdings across all its funds. The 3 funds I managed to track down did not account for all the shares, but all 3 had exited their positions as of 30 Sep, leading me to believe that T. Rowe might have exited all YZJ FH positions across their funds, if they hold a consistent house view. They probably have to sell out out pro rata across the funds in order to not disadvantage one fund or the other.

I am not sure what BlueKelah is referring to when he says why sell only 1 fund and not all?

[weijian]

@BlueKelah,

I have reviewed your post and it has to be moderated. This is probably the 2nd time it has happened as I remember Squirrel has called this out previously once. Let there not be a 3rd time.

We can learn things the hard way by paying for the lesson ourselves, or to let others pay for it while we learn from the sidelines. You are wise enough to know which is a cleverer way.

Moderator

[CY09]

Hi Squirrel,

My view is that the magnitude in fall being larger than Singapore market is due to the slowing share buyback by the company. Let me explain it with a reference to the share price movement.

I have been observing YZJFH rather closely as it is a core position. What i notice is that YZJFH does not support share prices much. In the past few days, it is likely it place a single 1 million share purchase block, at the start of the day, 1 bid below opening price. Even if prices breaks through it, YZJFH does not do much after which, maybe buy one or two more blocks

YZJFH has not been actively supporting the share prices this month. The pace of share buyback has slowed despite prices on a decline. People are intrepreting that YZJFH is no longer finding its own company worth its investments. This is the analogy of a chef who does not eat his cooking (in this scenario, the chef is eating less of his cooked food). Its not a good sign when the chef eats less of the his food. Makes people wonder what else is he eating

[brattzz]

Can it be that the Chef is full already, or find it not worthwhile to pay for his own dishes at the current market prices....