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I'm beginning to look at Foreland with interests.
At $0.10, it seems very overvalued.
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I meant undervalued.
I am not vested yet.
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11-03-2012, 08:02 PM
(This post was last modified: 11-03-2012, 08:02 PM by pianist.)
A related news on garment industry in China
A ghastly sight behind China's glamorous garment industry
Xintang and Gurao are two towns known for churning out millions of garments every year.
The former's output exceeds 260 pieces annually, and exports over 60 per cent of China's denim clothing. The latter produces 200 million bras a year.
But they are known for something else as well: Pollution.
The river near Dadun Village of Xintang is not just polluted, it's downright toxic. Not only does it emit a vomit-inducing stench, the river's 'water' causes skin to itch or even canker on contact.
And it's not just the environment that suffers, the people complain of skin dyed blue permanently and itchy skin. But they have no choice; it's their livelihood on the line.
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I think it is silly and scary to just base on the pollution problems in Xintang and Gurao, and we conclude that Foreland's factory/operations based in Dongshi, Fujian, is suffering from the same fate.
I think it is also inadequate, baseless, and dangerous to just base on a past share placement done when the company was in a net cash position, and we conclude that Foreland's cash may be non-existent, and the money raised from the share placement would be used to fund future dividend payments - more as a show of continued financial health. The fact is that, since IPO in Apr07, Foreland had paid out dividends for FY07 (paid out in May08), for FY08 (paid out in Jun09), FY10 (paid out in Jun11), and FY11 (2 dividends; a $0.0051/share Interim paid out in Oct11, and a Rmb0.15/share Final likely in May/Jun12). Like many others, Foreland's business suffered a sharp decline during the 2008/09 global financial crisis, and the company did not pay out a dividend for FY09.
In fact, as an investor, there are many ways to verify things and risks in a listed company. You can talk to the management or CFO by attending the AGMs or result briefings or making a company/plant visit; you can give a call to an ID; and you can talk to the internal/external investor relations manager or analysts, who have written a press release or report on the company and have visited the plant before and have been talking to the management/CFO on a regular basis.
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IIRC, Foreland new factory not being able to commission also has something to do with environmental assessment.
time is the biggest enemy of any fraud. Given enough time, either it will explode or it is not a fraud. It will just take more and more time and money to continue the fraud.
maybe can compare how much money has been raised and how much has been spent already to get some kind of clue?
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