China Sunsine Chemicals Holdings

[specuvestor]

Hi I am saying they are paying dividend out of holdco retained earnings. You will have to know how much the holdco will earn in 2017 to add to the figure. It is not the same as consolidated profit figures.

Hi Specuvestor,

Notes 22 indicated that the company retained profit at the end of 2016 was Rmb$84 million. In May 2017, rmb$33 million was used to pay up dividend of 1.5 cents. Are you saying that the company can only pay 2 cents of dividend in the future with the remaining rmb$51 million?



Specuvestor wrote:

"I refer to 2016 AR page 47. Shareholders get paid from retained earnings of the Holdco. As of end 2016 that figure is RMB84.1m. You can also refer to Notes 22 & 23 for more clarity on the movement and maybe a better guesstimate of how much dividend the company can pay"

[PkNanas]

Weijian

I am a shareholder of Sunsine and not ZIWO. Can you clarify where you are pointing towards? Thanks.


Weijian wrote

"For example along the lines of structure, i do find it weird that Chairman Xu is paid 3x more (in AR16) than the combined board and Top5 Mgt (although he is also paid roughly the same through the dividends from his 63% holdings) - It seems like he wields alot of power in CSC and could become the key singular criteria for successful investment of the OPMI. If this is the case, then i have to ask how well i know Chairman Xu and his true background. Since he is pretty rich, so I find it weird for him to buy an small unrelated tourism asset under the group? Finally, my big red flag on the structure would be Lead ID Benny Lim - He had been with ZIWO (another S-chip) for the past 9years, although he has resigned from there in April2017. Anyone who knows more about ZIWO, might understand where i am pointing towards."

Weijian,

I noticed that you did not reply to Young Investor's question.
I am a China Sunsine shareholder too.
I do not know Ziwo at all. However, its share price chart shows long term downtrend.
Hence, your linkage of Ziwo with Sunsine make me uneasy.

Would you enlighten what has happened to Ziwo, especially of that associated with ID Benny Lim?

[guitarist]

I noticed that there are several very knowledgeable China Sunsine shareholders in this forum.
I am not a China Sunsine shareholder.
The share price has risen quite significantly over the past months.
This pattern makes me uneasy.

Previously, I regretted. Would someone enlighten me what happened?

[Bluechipfan]

Why are you uneasy when you are not vested? And what's there to regret?

[Bluechipfan]

I have in early June 2017 opined that price will move up as 2Q17 coming to an end. Indeed the price has hit 95 cents a few days before the release of 2Q17 results. It has since corrected to closed at 86 cents on 28.7.17. I have also just reviewed the 2Q17 results. The NAV is now 63.97 cents as compared to 59.72 cents in end FY16. Net profit in 2Q17 increased by 52% to hit rmb74.5m (I have forecasted 45-55% increase). 1H17’s net profit now stand at rmb131.5m (as compare to full FY16’s 221m). If the trend continues, by 3Q17 the net profit could have surpassed FY16’s net profit! I now envisage that the price will revisit 95 cents and probably go beyond that by the time FY17 coming to an end.

Also worth of note is the amount of information made available by the company. I think they will move up the corporate governance ranking table. Among other things, it indicated who are their main competitors and their capacity and it give a good gauge where Sunsine stands. Without a doubt, Sunsine is the market leader and this should put it in good stead. Going forward, Sunsine is still expanding and being a market leader, coupled with high cash in hand (rmb408m), Sunsine has the pricing power. They can sacrifice margin to maintain market shares or even increase market shares. In so doing, their competitors may not be able to keep up due to lesser financial means. In such scenario, Sunsine could increase its market shares.

I am of the view that intrinsic value of Sunsine should be well over $1. EPS could hit 13-15 cents by FY17 if the current strong trend did not abate. Dividend will be at least 3 cents if EPS hit 15 cents. Is this achievable? Well, EPS as of 2Q17 is 5.68 cents and extrapolate it then full year EPS will be 11.36 cents but that is too simplicity. However, we should note that the EPS is 57% more than FY16 at the same stage (3.61 cents as of 2Q16) and 3Q17’s figure should provide good indication whether EPS of 15 cents is achievable. Clearly, the proceeds from the sale of treasury shares (sgd17m or rmb83m) has not been factored in this set of results and rightly so as per earlier discussion.

Action - Ignore the price volatility. Do nothing and try to collect more if possible.

[budgetier]

Weijian

I am a shareholder of Sunsine and not ZIWO. Can you clarify where you are pointing towards? Thanks.


Weijian wrote

"For example along the lines of structure, i do find it weird that Chairman Xu is paid 3x more (in AR16) than the combined board and Top5 Mgt (although he is also paid roughly the same through the dividends from his 63% holdings) - It seems like he wields alot of power in CSC and could become the key singular criteria for successful investment of the OPMI. If this is the case, then i have to ask how well i know Chairman Xu and his true background. Since he is pretty rich, so I find it weird for him to buy an small unrelated tourism asset under the group? Finally, my big red flag on the structure would be Lead ID Benny Lim - He had been with ZIWO (another S-chip) for the past 9years, although he has resigned from there in April2017. Anyone who knows more about ZIWO, might understand where i am pointing towards."

Weijian,

I noticed that you did not reply to Young Investor's question.
I am a China Sunsine shareholder too.
I do not know Ziwo at all. However, its share price chart shows long term downtrend.
Hence, your linkage of Ziwo with Sunsine make me uneasy.

Would you enlighten what has happened to Ziwo, especially of that associated with ID Benny Lim?

Good morning, Weijian

Will you be replying to Young Investor and PkNanas, regarding the "big red flag" that you mentioned in your posting? Would appreciate it very much if you would because I am also a China Sunsine shareholder and would like to know what happened at Ziwo that was a concern to be your big red flag on China Sunsine's structure . Thank you.

[Sfsh12]

Came across the link below which has a good summary notes of 2Q17 results briefing which took place at SGX on 28 July.

https://www.investingnote.com/posts/147017

[weijian]

Good morning, Weijian

Will you be replying to Young Investor and PkNanas, regarding the "big red flag" that you mentioned in your posting? Would appreciate it very much if you would because I am also a China Sunsine shareholder and would like to know what happened at Ziwo that was a concern to be your big red flag on China Sunsine's structure . Thank you.

Good morning budgetier,
Apologize for the late response. The share price of ZIWO has been trending lower as forumer PKNanas mentioned - it is mainly trending with its revenue and profitability. I am an outsider but I suspect that certain portions of its top/bottomline had been inflated in the good years leading to IPO and so "reversion to the mean" is inevitable. Inflations may include churning products to customers (with long dated kick backs) resulting in subsequent revenue reductions and expenses are subsequently loaded back to the listed company.

The company made a penalty payment to some customers for defective products in 2015. Recently, it is making placement to raise more cash from the market. All these sound familiar compared to some other companies like China Fibretech/Eratat Lifestyle? (take note that I am not making any linkages between any of these companies to Sunsine)

Defect claims in 2015: http://infopub.sgx.com/FileOpen/Ziwo%20-...eID=372273

Generally, i think an ID is there for the money or the reputation. ZIWO has a suspected reputation as a business based on what I mentioned above. By staying there for 8years as its business performance/stock price tanked, I will need more convincing that Benny Lim will be able to do a robust and consistent job to uphold the rights of OPMIs as lead ID at Sunsine.

[Bluechipfan]

Honestly I don't know what you are driving at. Initially you made reference to the LD, Mr Benny and tried to link the 2 (Ziwo and Sunsine). Now in your reply to budgetier are you saying Sunsine cook it's book because that's the impression I get? Do you mind clarify further?

[weijian]

hi bluechipfan,
thanks for your reminder, I was responding to forumer about ZIWO but forgot to link it back..let me update my post to be more specific.