S-Chips that have values

[Nick]

I stumbled upon CMP by looking for an infrastructure play after being disillusioned with the over-leveraged and under-invested business trust model. Never found it by deep diving the S Chip universe for a bargain. Almost got burnt by China Milk many years ago when I was starting out.

I reckon Straco isn't regarded as S-Chip by you, right?

Not at all. Managed and largely owned by a Singaporean couple.

[Jacmar]

Hi Nick,

Which category do you think CMP fall into then? CMP is worth your effort digging since you have done so much work on it.

GG

Honestly, I would simply avoid nearly every S Chip. It is not worth the risk. So I won't be combing the entire S Chip universe for bargains.

I would consider CMPH as a s-chip with a SOE pedigree. another such company is CAO. Look at the way they rescue CAO even though it was bankrupt after the debacle and you know there is some assurance by investing with a SOE backing. To the Chinese saving face is very important. They even sent back to sgp the CEO to jail. I don't see that with the rest of the S-chips that gone bust. Those official that they sent to run SOE have a career to worry about back home in the communist party ladder. So corp gov is of a lesser problem, hence my confidence with their numbers.

[Harvest Time]

Straco Corporation Limited was incorporated in Singapore in April 2002. It was listed on the Mainboard of the Singapore Exchange on 20 February 2004. Its major shareholders are Straco Holding Pte Ltd and China Poly Group Corporation. SCL is a leading developer and operator of tourism-related assets in China.

[Nick]

To do well in China, the companies you invest in need to have great connections. It is as simple as that. With connections, doors can be opened and deals can be made. Even if the entity has great corporate governance, there is no guarantee it will be able to successfully navigate the opaque business structure and dealings in China. Just look at MIIF's investment in HNE and the subsequent toll rate reduction.

[CityFarmer]

I stumbled upon CMP by looking for an infrastructure play after being disillusioned with the over-leveraged and under-invested business trust model. Never found it by deep diving the S Chip universe for a bargain. Almost got burnt by China Milk many years ago when I was starting out.

I reckon Straco isn't regarded as S-Chip by you, right?

Not at all. Managed and largely owned by a Singaporean couple.

For sake of discussion. If all else being equal, Straco now is managed and largely hold by China businessman, will you still invest into Straco?

(not vested in Straco)

[dxdx]

Thank you all for your feedbacks. This will certainly help me in my decisions.

I know that there are many S-Chips that are already de-listed or suspended, but there should be a reason why these companies are still standing.

For Sino Grandness, I agree with Curiousparty that it is "incredible" that's why I got interested. If they will be able to successfully spin-off their Garden Fresh in HK, do you think it will prove that they are legit? Like grubb said, good legitimate business have already moved to HK.

More comments/opinions please. Hopefully, some good ones too?

Think you should err with a bit of caution when it comes to regulation; not everything can be caught in the web of scrutiny.

There are still speculations of red flag incidents occurring such as the insider trading events with SMRT, Singpost ; as well as, the price manipulations of Blumont, Asiasons, Ipco, Liongold et. al.

[Nick]

I stumbled upon CMP by looking for an infrastructure play after being disillusioned with the over-leveraged and under-invested business trust model. Never found it by deep diving the S Chip universe for a bargain. Almost got burnt by China Milk many years ago when I was starting out.

I reckon Straco isn't regarded as S-Chip by you, right?

Not at all. Managed and largely owned by a Singaporean couple.

For sake of discussion. If all else being equal, Straco now is managed and largely hold by China businessman, will you still invest into Straco?

(not vested in Straco)

Granted, it will be tempting since a Culture based SOE (Poly Group) holds a 22% stake in Straco. But, I highly doubt I would invest in it since I would not be certain of the existence of its S$130 million cash hoard.

[roxhockey]

Nationality of management aside, Straco has a much more verifiable business model. You can see the acquarium and the amount of people lining up which proves the revenue is likely real. The balance sheet and p&l make sense unlike many fraudulent S-Chips which had crazy margins or suspiciously large receivables balances. It also has never raised equity post-IPO.

[CityFarmer]

I stumbled upon CMP by looking for an infrastructure play after being disillusioned with the over-leveraged and under-invested business trust model. Never found it by deep diving the S Chip universe for a bargain. Almost got burnt by China Milk many years ago when I was starting out.

I reckon Straco isn't regarded as S-Chip by you, right?

Not at all. Managed and largely owned by a Singaporean couple.

For sake of discussion. If all else being equal, Straco now is managed and largely hold by China businessman, will you still invest into Straco?

(not vested in Straco)

Granted, it will be tempting since a Culture based SOE (Poly Group) holds a 22% stake in Straco. But, I highly doubt I would invest in it since I would not be certain of the existence of its S$130 million cash hoard.

Noted, and Thanks.

I will not concur the excessive weight on the nationality of management, on an investment decision, but I respect the choice.

Management integrity is important. Stereotyping is an easy way out, but might be very misleading, IMO.

[Bubbachuck]

China Sunsine 2Q2014 net profit soars 194% yoy to RMB 60.2 million, a new quarterly high. Very Interesting.....