Asia Enterprise Holdings

[GFG]

beau : Whilst the high cash level gives reassurance that the company won't go bankrupt during bad times, need to keep in mind inventories are at very low levels now. Steel stocking is an inventory intensive business, the company will easily need 40-50 million to ramp up inventories if business improves to the level it was in 2011 where inventory levels were in the 60+ million range. Current inventories are at 17m+ level for comparison.

GFG : If you look at the shareholdings you can see the Lee family owns 38+% of the company so actually there is no way you could buy up the company at this price. And due to the super low liquidity and free float(78% owned by the top 20 holders who been holding god knows how long), any accumulation will just make the price gap up to 30 cents at least easily. Any takeover would definitely have to be a good premium to NAV of 27c. Check out PEC and Compact metal also both below net cash.

Yes... Note my use of the word "technically"...

From the time when I used to own this, if I rem correctly, it's always historically been at a certain discount to NTA. So that itself is not a bullish sign
But I can't rem when it was actually ever BELOW net cash.

Another potential risk is the MTP requirement
Don't think this has a chance to meet the $0.2 anytime soon

[dydx]

At the current steel prices, there is little GP Margin - less than 10%! - left in AEM's steel stockist/trading business, even after the company having taken a massive $10.0m write-down of its steel inventories in 4Q/FY15, and despite management's on-going cost-control measures. Therefore, unless demand and market steel price go up again, we can reasonably expect AEM to continue incurring operating cash losses to the tune of $2.0m a year - equating to approx. $0.006/share - and in 2016.

[GFG]

At the current steel prices, there is little GP Margin - less than 10%! - left in AEM's steel stockist/trading business, even after the company having taken a massive $10.0m write-down of its steel inventories in 4Q/FY15, and despite management's on-going cost-control measures. Therefore, unless demand and market steel price go up again, we can reasonably expect AEM to continue incurring operating cash losses to the tune of $2.0m a year - equating to approx. $0.006/share - and in 2016.

Hi
How'd u derive the $2mil a yr?

I think this is a fairly accurate description of AEH.
Add in dividends to have a rough idea of the cash burn.
It'd take v long before the cash is depleted
Still, one is unlikely to see huge gains with AEH.

[dydx]

At the current steel prices, there is little GP Margin - less than 10%! - left in AEM's steel stockist/trading business, even after the company having taken a massive $10.0m write-down of its steel inventories in 4Q/FY15, and despite management's on-going cost-control measures. Therefore, unless demand and market steel price go up again, we can reasonably expect AEM to continue incurring operating cash losses to the tune of $2.0m a year - equating to approx. $0.006/share - and in 2016.

Hi
How'd u derive the $2mil a yr?

I think this is a fairly accurate description of AEH.
Add in dividends to have a rough idea of the cash burn.
It'd take v long before the cash is depleted
Still, one is unlikely to see huge gains with AEH.

After adjusting for the $9.81m inventory write-down and adding back $0.45m in depreciation expenses, AEH's latest FY15 P&L posted an after-tax operating cash loss of $1.82m.

[GFG]

At the current steel prices, there is little GP Margin - less than 10%! - left in AEM's steel stockist/trading business, even after the company having taken a massive $10.0m write-down of its steel inventories in 4Q/FY15, and despite management's on-going cost-control measures. Therefore, unless demand and market steel price go up again, we can reasonably expect AEM to continue incurring operating cash losses to the tune of $2.0m a year - equating to approx. $0.006/share - and in 2016.

Hi
How'd u derive the $2mil a yr?

I think this is a fairly accurate description of AEH.
Add in dividends to have a rough idea of the cash burn.
It'd take v long before the cash is depleted
Still, one is unlikely to see huge gains with AEH.

After adjusting for the $9.81m inventory write-down and adding back $0.45m in depreciation expenses, AEH's latest FY15 P&L posted an after-tax operating cash loss of $1.82m.

Trading at below net cash value,
It seems the market is pricing in future write downs.
Nobody knows how long this commodity downturn will last at this stage.

[slowandsteady]

Any buddies going for AGM tomorrow? Interested to know what management has to say, but can't get leave.

[brattzz]

beginning of a long winter - KEPCORP...

doesn't sound good for AEH.... :O

[TTTI]

beginning of a long winter - KEPCORP...

doesn't sound good for AEH.... :O

They'd prob bunker down and they can survive a very long downturn.
Long track record of surviving downturns
But not much upswing even in an upturn.

[brattzz]

they can stay winter as long as they want, but what's the point of investing in it??! :O
dividends cut, stay out of it.
come back when KEPCORP says "NEW CONTRACT WORTH XXX BILLIONS SIGN!"

Keep cash!

[slowandsteady]

Any buddies with some insights from AGM to share? Someone scooped up 167,200 shares right after the meeting - highest level since 1 March.