Sino Grandness

[BlueKelah]

CY09 IF this really a fraud I think you'd be really pissed hahaha

-- via Xperia Z1 with tapatalk

[specuvestor]

I will highlight the dangers of investing into china stocks. If many will remember, we had a stock called China Eratat. It looked a very legit company; gave constant dividends, real shop front which sold Eratat products and was a sponsor for a Chinese TV program. So things may seem real and even can be bought in China, but still what is reflected on B/S was faked. Other warning signs of Eratat was its High receivables (more than 90 days of revenue), high cash and yet raised more capital and the sudden renovation subsidy to its customers.

Actually the most telling sign that end of Eratat was near was that it issued a super high yield bond when it was so "loaded". The bond was managed by none other than SHK.

Garden Fresh IPO is going to be a binary event.

[CY09]

Agree that the IPO is the key binary event as I have mentioned earlier. In addition, because the HKSE is at one of its peaks, its a good time for an IPO, if SFIG does not do an IPO; it is raising alarm bells.

In addition, even if SFIG submits IPO application but falls short to list in time, the penalty incurred by bondholders is reduced. Therefore, business sense, it is better to submit paperwork which will save time a few tens mil of RMB. Not doing any IPO application at all will raise doubts that SFIG does not want regulators to snoop into their business

[weijian]

I will highlight the dangers of investing into china stocks. If many will remember, we had a stock called China Eratat. It looked a very legit company; gave constant dividends, real shop front which sold Eratat products and was a sponsor for a Chinese TV program. So things may seem real and even can be bought in China, but still what is reflected on B/S was faked. Other warning signs of Eratat was its High receivables (more than 90 days of revenue), high cash and yet raised more capital and the sudden renovation subsidy to its customers.

Some of the traits are again reflected in the SFIG case, I am vested but just issuing some warning for rather new investors.

Addition stuff to clarify: SFIG shares are held by TTA and not the Thai Tycoon himself. Therefore TTA holds 9% of SFIG currently.In turn, the Thai holds less than 50% of TTA. Also, the investment into SFIG is only 1.7% of TTA's market cap

I didn't know that it is so easy to do "public service to newbies" in investing. (What the hell! I gotta a (virtual) reputation to maintain even if I lose real money!)

There is also very conflicting thoughts over here - On one hand, you argue that the Thai investors are white knights and strengthens the investment thesis. On the other hand, you mention that it is only a "small part" of the wealth of the T(hai)ycoon.

It is not rational for someone to commit ~15% of the portfolio to an investment case, where he himself does 'public service' by acknowledging and warning the dangers. A more rational action would be someone for eg. like CuriousParty, to fervently promote CES, almost rain or shine. As much as the promotion has gone abit far fetch at times, it is rationality at work. IMHO, i believe i am seeing loss aversion at work here. In order to avoid incurring a permanent deficit in the mental account, you decide to take more risk by putting up this stake into a bet of this binary event. Making a loss would already make one feel stupid, cutting loss and then eventually having the binary event turn out in one's favor would risk making one look even more stupid. Most people (including me) will not be able to get out of this trap most of the time.

[specuvestor]

Moving forward, SFIG should do something to buy confidence from the market. Right now, the issue is the trust the market has of the company and nothing else. Therefore, the listing of Garden Fresh should be done to instil that.

Agree that the IPO is the key binary event as I have mentioned earlier. In addition, because the HKSE is at one of its peaks, its a good time for an IPO, if SFIG does not do an IPO; it is raising alarm bells.

Hi CY09

I'm not sure you understand what i mean by binary event

There is no instilling of confidence nor alarm bells anymore in June/July. It's either going to be very big time or very ugly. There will not be any in between

VBs should consider one's holdings as a call option expiring June/July, then maybe can manage risk and expectations correctly.

[CY09]

Hi specuvestor,

Thanks for the clarification, it's closer to an all or nothing scenario

[Young Investor]

If Sino G is not a fake company, it should be able to borrow money from the banks to pay the convertible bonds even if IPO is not successful.

[simpleman]

May I know what is the basis of saying that Sino Grandness is a replica of Eratat ?

[CityFarmer]

It is always positive for insider buyings...

(not vested)

Sino Grandness Food founder lifts stake in company as shares tumble

SINGAPORE (March 9): Huang Yupeng, chairman and CEO of Sino Grandness Food Industry Group ( Financial Dashboard), has raised his stake in the Shenzhen-headquartered company.

He bought 550,000 shares on the open market last Friday, lifting his stake to 35.34% from 35.26%, according to a regulatory filing.

Huang, who founded the canned-food company, paid $154,990 for the shares. That works out to about 28 cents apiece, slightly more than the stock's closing price of 26 cents on March 6.
...
http://www.theedgemarkets.com/sg/article...res-tumble

[cyclone]

May I know what is the basis of saying that Sino Grandness is a replica of Eratat ?

Btw, who is saying that Sino Grandness is a replica of Eratat ? Not all kwek kwek kwek is a duck.