Advanced Holdings

[donmihaihai]

This "value trap" has delivered. Capital reduction of 23.2c per share, a whopping 180%+ over its last traded price!
https://links.sgx.com/1.0.0/corporate-an...57f7f36d62

Indeed interesting. my gain is 180%+ if I invested yesterday. I did not. 

this thread stopped chatting about it in 2016 and was very negative prior to that. The share price was in $0.20 to $0.30 range in 2016. Gone nowhere for last 7 years. Plainful even with dividends. Don't look at the share price prior to 2016. (whispering: alot higher). From 2020 till now, it spent most of the time trading at below $0.10 with lowest at $0.03. Not a single post here...

I know nothing about Advanced Holdings, but from the last 20 years share price. If this forum is of any indication, the most profitable time to invest is when it is dead silent here and trading a lot lesser than net cash.

[ksir]

This "value trap" has delivered. Capital reduction of 23.2c per share, a whopping 180%+ over its last traded price!
https://links.sgx.com/1.0.0/corporate-an...57f7f36d62

Indeed interesting. my gain is 180%+ if I invested yesterday. I did not. 

this thread stopped chatting about it in 2016 and was very negative prior to that. The share price was in $0.20 to $0.30 range in 2016. Gone nowhere for last 7 years. Plainful even with dividends. Don't look at the share price prior to 2016. (whispering: alot higher). From 2020 till now, it spent most of the time trading at below $0.10 with lowest at $0.03. Not a single post here...

I know nothing about Advanced Holdings, but from the last 20 years share price. If this forum is of any indication, the most profitable time to invest is when it is dead silent here and trading a lot lesser than net cash.

👉 If this forum is of any indication, the most profitable time to invest is when it is dead silent here and trading a lot lesser than net cash.

Indeed interesting, haha. 👆
A certain company has 130+ pages of discussion and yet there is Zero post in the whole of 2022 and 5 posts in 2023 (with 2 from yours truly). 😁
It's my indication of value! I reckon the company prospect is never better.

[specuvestor]

7 years of indication plus whether one has tenacity and patience to hold through. Even Amazon was down 93% post dot com. Plus it's a binary risk with no control over the Structure

Frankly I find it a peculair case study that this is done without privatisation effort or any "Advanced (pun intended) notice". My guess is that the leftover asset is not that attractive to be privatised or for personal guarantee. Hindside is always wonderful

This "value trap" has delivered. Capital reduction of 23.2c per share, a whopping 180%+ over its last traded price!
https://links.sgx.com/1.0.0/corporate-an...57f7f36d62

Was there any "advanced notice" from Advanced Holdings? 

Corp governance red flag below from GFG that I wouldn't want to get in bed with. Happy to be just a spectator. As per my previous post opportunity cost is STI also up 45% over 7 years. Also observed that the E&Y award continues to be contrarian indicator

Advanced Holdings Director Dr Wong Kar King, sold 17million shares (personal stake) to BD Corporation in Sept 2013 in a married deal worth $0.42 per share. This is substantially ABOVE the market price then of 20 something cents.

3 months later, Advanced Holdings announce a MOU to wholly acquire BD Cranetech from the same 3 people who bought his personal stake at a high price.

I get very skeptical when I see deals like this.

Of course, it could be that this is just a prudent move to acquire BD Crane business, and get their management team to be aligned to the company interests even after selling out.
But it can also be interpreted as a director getting his personal interests taken care off by selling off a big stake at rich valuations, and then getting the company to pay a high price to take over the business interests of the original buyers.
The business is also unrelated to their core business of manufacturing.

Very important info, thanks for sharing. I was just wondering why Dr Wong still get nominated by E&Y as one of the 4 finalists for their best enterprenuers of this year?

[dreamybear]

Interesting case study. STI over past 5 years +21.3% past 7 years from last post in 2016 +45% so depends on timeline

"The purpose of the proposed Capital Reduction is partly to cancel issued and paid-u p share capital of the Company no longer represented by available assets due to the Accumulated Losses. " yet pay out "excess" cash instead of privatising. Major shareholder added stake in 2019

I recall there was a thread which discusses, for the average retail investor, whether the absolute amount(in $) earned from investing is better or having one's performance beating some indexes.

Trying to fit that into this case study :

It is more plausible to think that a retail investor is more willing to invest a much larger amount e.g. 6/7 figures into an index(e.g. STI index) vs Advance Holdings from a risk appetite pt of view. So the absolute returns may end up significantly different.

Even if one takes a bet and invest a token sum, besides opportunity cost, is the return(based on token sum initial capital) worth the effort to "worry" and track the company over such a long period ?  Furthermore, what if the Capital Reduction is done some 10 years later from today or it never happens ?

Even though the returns are astounding, from the "punch card + invest meaningful amt in each best idea" pt of view, I don't think the stock fits the bill.

One of my first tots was also why not privatize. At the end of the day, I think it's good to be open-minded and there cld be noteworthy lessons learnt from the episode.

[Janeo]

I couldn't believe my eyes but did the MD just voted against the cap return?

[weijian]

I couldn't believe my eyes but did the MD just voted against the cap return?

The offer circular states that the MD Dr Wong Kar King owns 41,402,109 shares. The EGM shows 41,405,109 votes for rejection. The odd lots look too much of a coincidence IMO.

EGM results:
https://links.sgx.com/FileOpen/AHL%20-%2...eID=773616

Offer circular:
https://links.sgx.com/FileOpen/AHL_Circu...eID=773615

So what actually transpired? Change of plans? MD got out-voted in BOD and so used EGM to flex back? Trying to ward off a margin call?

[ngcheeki]

"Dr Wong attended and personally voted against the resolution at the EGM. After voting, Dr Wong left
the EGM as he was not feeling well. Dr Wong informed the Board at a meeting subsequent to the EGM
that he had pondered hard on his decision to vote for or against the Resolution as a majority shareholder,
and only made his final decision at the time of voting at the EGM, believing it to be in the best interests
of the Company. This decision was made despite knowing that he will not be receiving Cash Distribution
of about S$9.6 million.
The Board understood that subsequent to the Board’s Recommendation and announcement of the
notice of EGM on 7 September 2023 and before the date of the EGM on 29 September 2023, Dr Wong
was made aware of certain business and / or investment opportunities and had preliminary discussions
to explore these opportunities, which would require capital. Given the impending EGM date, Dr Wong
did not have the latitude to analyse and review such opportunities in full and Dr Wong took the view
that it is in the best interests of the Company to retain the capital until these opportunities can be fully
analysed and/or reviewed by management and/or its advisors and discussed by the Board. Retaining
the capital in the Company would thus provide more options than proceeding with the Cash Distribution,
which remains an option should there be no conclusive outcome on the other opportunities."

https://links.sgx.com/1.0.0/corporate-an...%20EGM.pdf

[weijian]

thanks VB ngcheekai for the timely update. Some actions may change but the underlying behavior never does.

Old post by VB GFG back in 2016:
https://www.valuebuddies.com/thread-4597...#pid124398

[specuvestor]

Looks like peculiar got more peculiar that he changed his mind... let's see if he has sold anything or margin transfer

Maybe privatise making more sense?

7 years of indication plus whether one has tenacity and patience to hold through. Even Amazon was down 93% post dot com. Plus it's a binary risk with no control over the Structure

Frankly I find it a peculair case study that this is done without privatisation effort or any "Advanced (pun intended) notice". My guess is that the leftover asset is not that attractive to be privatised or for personal guarantee. Hindside is always wonderful

Interesting case study. STI over past 5 years +21.3% past 7 years from last post in 2016 +45% so depends on timeline

"The purpose of the proposed Capital Reduction is partly to cancel issued and paid-u p share capital of the Company no longer represented by available assets due to the Accumulated Losses. " yet pay out "excess" cash instead of privatising. Major shareholder added stake in 2019