China Merchants Holdings Pacific

[jovialger]

Can it be from toll fee hike?

[Jacmar]

Will the bonus shares be entitled to the dividend declared too?

Short answer is NO. Go see the announcement.

I am a bit disappointed with the div. Need to tell mgt that you reward shareholders with higher div and not bonus issue. Bonus issue just divides the cake and gives us the crumps. now have to deal with all the odd lots.

Other than that result as was expected, great. Just need to patiently wait for their next acquisition and enjoy the div yield.

[ahyu02]

http://infopub.sgx.com/Apps?A=COW_CorpAn..._Issue.pdf

At 2.1, it mentioned "Fractional entitlements will be disregarded and will not be allotted to Shareholders but will be aggregated and disposed of or dealt with in such manner as the Directors in their absolute discretion deem fit for the benefit of the Company."

Does it mean company will not allotted entitled bonus issue of less than 100 unit?

[kikababoo]

i think u will get five shares? which makes it an odd lot.

[Nick]

http://infopub.sgx.com/Apps?A=COW_CorpAn..._Issue.pdf

At 2.1, it mentioned "Fractional entitlements will be disregarded and will not be allotted to Shareholders but will be aggregated and disposed of or dealt with in such manner as the Directors in their absolute discretion deem fit for the benefit of the Company."

Does it mean company will not allotted entitled bonus issue of less than 100 unit?

Fractional shares means < 1 share if I understand it correctly i.e. if you own 1010 shares, you are entitled to 50.5 shares but since there is no such thing as 0.5 share, you will just get 50 shares.

[ahyu02]

Thank kikababoo n Nick for the clarification. I got confused with the term fractional entitlement.

[Jack31]

Will the bonus shares be entitled to the dividend declared too?

Short answer is NO. Go see the announcement.

I am a bit disappointed with the div. Need to tell mgt that you reward shareholders with higher div and not bonus issue. Bonus issue just divides the cake and gives us the crumps. now have to deal with all the odd lots.

Other than that result as was expected, great. Just need to patiently wait for their next acquisition and enjoy the div yield.

I actually like bonus share as cmp price has remain stable for the past few years. Allow them to preserve cash as well. With 100 share per lot now, it isn't so difficult to deal with odd share unlike previously when it was 1000s per lot. If fact if they were to implement scrip dividend, I will take it. Mmm.. Wonder if they did consider this b4.

[valuebuddies]

Well though the bonus issue comes with certain cost (to CMPH), it actually cause no harm to the existing shareholders. Benefits wise we could see more trading liquidity, firstly from the enlarges public float and secondly from the marking of "CD, CB" in SGX site may caught attention from those who have not vested. With the share price steadily moving upwards, the move to introduce bonus issue is understandable.

[greengiraffe]

Bonus issues is a financial engineering move that adds no value to shareholders' wealth. There is no doubt that trading liquidity will improve but usually bonus issue is an signalling tool on part of management - typically should absolute dividend amount remains the same, in this case CMP is indicating to market that FY15 dividend rate will be raised by 5%.

http://www.cmhp.com.sg/about-milestones

Management probably took into account the outstanding CBs before deciding on the move. Given that this is the first ever bonus issue since Chinese linked company took control of CMP way back to 1993, i personally think that management is taking steps to come out of their shell following the M&A in recent years.

While their ambition to grow the company is far from finished, this could be the beginning of another episode in CMP's history.

Will also be interesting if CMP management decides to grant the media another rare interview - the last of which with The Edge was done way back in 2011.

GG

[weijian]

http://infopub.sgx.com/Apps?A=COW_CorpAn..._Issue.pdf

At 2.1, it mentioned "Fractional entitlements will be disregarded and will not be allotted to Shareholders but will be aggregated and disposed of or dealt with in such manner as the Directors in their absolute discretion deem fit for the benefit of the Company."

Does it mean company will not allotted entitled bonus issue of less than 100 unit?

Fractional shares means < 1 share if I understand it correctly i.e. if you own 1010 shares, you are entitled to 50.5 shares but since there is no such thing as 0.5 share, you will just get 50 shares.

Bonus issues are tricky financial engineering as GF mentioned - It gives one an illusion of extra wealth and at the same time, for the major shareholder+Mgt to subtlely 'squeeze out' the minorities (without majority of them knowing). Rational folks know it is BS when the anyone tries to justify it as 'increasing liquidity'. An astute investor will prefer 'hot and promising' stocks to be in a (positive)cornered situation - in which they will themselves provide the liquidity for new shareholders to buy into.

In China, bonus issues are destructive as they are taxed for foreigners because it is a transfer from 'retained profits' to 'share capital' and this act is considered a distribution of profits. As such, the withholding 10% tax applies. . For example a ‘7 for 10 bonus issue’, if par value for 1 share is RMB 1, it is deemed a distribution of RMB 0.7 per share, and with 10% withholding tax, RMB 0.07 per share. Not too long ago, the Webb site had a blasting discussion on a couple of Chinese companies on this, as they were deemed to be doing 'national service' by paying the Chinese Gov tax, while shareholders did not receive any real cash (dividend) and ended up with an unchanged % ownership of the company.