China Minzhong Food Corporation

[Jared Seah]

Wildreamz,

1. I cheered dzm87 on as he was making his OWN decisions despite the put-downs - good or bad decisions I have no clue. I'm only an equities man-whore; not a value investor.


2. You just had your first epiphany on the pitfalls of riding on the coat-tails of others - Indofood and Templeton. Why repeat history by asking what others will do tomorrow?

To an investor who owns CMZ at 5% share of his portfolio, a 50% loss in CMZ is "only" 2.5% "scratch" in totality. Even a 100% total loss in CMZ is "only" a paper cut with 5% loss at his portfolio level. Not the end of the world.

Others are not you; nor in the same boat.

Focus on what is right by you.

Make you own mistakes; learn from your own folly. (Trust me, you won't feel better knowing Indofood lost more money than you)


3. I've lost 100% on Jurong Tech. If I blame and sell all my other Singapore stocks, what stocks are there left for me to buy?

I am the problem - not SGX; not the under-writer; not Jurong Tech.

If it's not my fault, then there's no need to develop further...


4. Don't let a crisis go to waste. (weijian is incredibly sanguine about paying up for the lesson. That's what poker players do sometimes on losing hands. Just to see the hidden card...)


(Not vested)

[Wildreamz]

You are absolutely right, good call. I need to make up my damn mind this time.

[kang]

imo, there is more to come. Not a dead conclusion yet. Whether CMZ is a fraud co or whether Glaucus allegation is legit is still a question mark. For those who are holding on to the shares, it is how much risk and loss you are willing to take and can stomach. Fear and panic is what they are creating and how you react to it.

[kelvesy]

I nearly wanted to invest in this counter when I encountered it. I could have probably be another victim of CMZ.

However, what stopped me was, its absurd profit margins and the rate of growth. Can selling mushrooms be that profitable? And also, some of their photos look photoshopped. When something is too good to be true, I probably would avoid it.

[HitandRun]

Wildreamz,
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(Not vested)

As usual, my idol Jared provides great advice, which can only come from a life of experience, especially the painful ones.

27 is still so very young, i.e. time in on your side. I've lost 50% or more of my capital twice, when I was in my 20s... the good old days.

[Temperament]

27yo still very young le...
so I guess the losses will be small compared to yr earnings and savings in later years..

Agree. i started at the age of 40. But i am surprised many started at even an older age than me. i try to get my son interested at age 21 by gifting him with not money but 2 SGX and 2 SPH and helping him to buy SPH at $2.5. during 2008/2009 GFC.

Now he is 25 but mildly interested. Nevertheless, he has accounting background and "street-smart" to a certain level about the investment market.
He's more interested in playing game. He has been making money in his game buying/selling accessories in the game. So he at least shows "business-sense" in his game market. He knows his market (alas only game market) well enough to make money.
i hope when he is ready to seriously investing in the shares market, he has the same "business-sense" just like in his game market.

He thinks he has plenty of time for the stock market. This may be so if he can finally willing to learn to invest for the rest of his life. i hope much earlier than me.
So 27 still has plenty of time for the rest of your investing life. 70s to 80s if God permits.
Shalom.

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Wildreamz,
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(Not vested)

As usual, my idol Jared provides great advice, which can only come from a life of experience, especially the painful ones.

27 is still so very young, i.e. time in on your side. I've lost 50% or more of my capital twice, when I was in my 20s... the good old days.

Agree. i think i have had lost more than twice at around 50% but still survive. Why? i have learned not to press the "Panic Button". i am bluffing you here. (Actually, i did a bit sometimes. With some "S-CHIP" stocks, lol.)

[CityFarmer]

The first press release from the company, after halted due to Glaucus's report. A typical response, and nothing changes...

----
Singapore, 26 August 2013 – It has been brought to the attention of China Minzhong Food
Corporation Limited ("the Company") that Glaucus Research Group (“Glaucus”) has released a
report (“Report”) regarding certain affairs of the Company. The Report has caused a substantial
decrease in the share price of the Company this morning and Glaucus has openly stated that
Glaucus and those acting in concert with it are short sellers who will profit from the decline of the
Company’s stock price.
The Company is in the process of reviewing the Report and will provide its response shortly. The
Company will take all necessary steps to defend its reputation and will not hesitate to take legal
action against those who put up and disseminate false or misleading statements without due
regard to their truth and for the purpose of inducing others to deal in securities.
In the meantime, the Company has halted the trading of its stock and reserves all rights against
the aforesaid parties.

http://infopub.sgx.com/FileOpen/CMZ_Pres...eID=253898

[KopiKat]

News article from Reuters,

Short-seller hits China food firm in rare Singapore attack

* Short-seller says China Minzhong misled investors about sales
* China Minzhong: taking legal advice, halts trading in shares
* Shares plunge 50 percent (Updates with details of suspension, comment from China Minzhong)

[Ray168]

I am one of the victims of CMZ saga.

Sharing my reflection & thought...

1. Prior to investing I did some due diligent as generally S-chip company is risky.

2. Since Tetra (GIC) is the SSH, plus Templeton... I thought this company should be low risk company.

3. Then I look at the company track record... Good fundamental with consistent growth. High ROE and low PER. The only man concern was the high account receivable. When it reports the AR is manageable as EU is recover, I decided to invest.

4. When Tetra sold its entire stake in Mar2013, I am a bit uneasy. However, my concern eased off a IndoFood take over. InfoFood even increase its stake. It add more confident.

5. I am pretty confident the company will excel and Mr. market will match its value in the due course.
So, relax and wait for the fruit.

6. Then come the Black Monday (26 Aug2013) the price plunged 48% and trading halted. I was alerted when the price fell 15%. Ask myself, is there any bad news? None to my best knowledge. KimEng said that the earning is below expectation. Mmm, I thought that Mr Market is over-reacted. May be can pick up some to accumulate. ("fortunately did not execute the buy")

7. The price continue to fall, up to 30% and I was then 'wake up" something must be wrong. I google and saw the Glaucus Research Report. Before I can react to it, the price already plunge 50% and then follow by trading halt.

8. Through out the 'horror' experience, I was pretty calm (may be I have high margin of safety?). I get the real life experience to see the share price plunge every minutes..... I really pity for those who bought the shares during the opening when price is still at ~ $1.00, may be react to KimEng call that CMZ target price of $1.36.

9. Now that the saga had lapsed, I just have to wait for CMZ response to the accusation. Will CMZ able to proof its case that the accusation is wrong and take legal action? If yes, then CMZ will recover, but the process will be slow as Mr. market has lost confident. Or someone is contrarian and pick up from here.

10. Worst case is that CMZ is at fault.... then that probably the end of it...

11. Anyway, what I could do now is just wait for CMZ response and decide next course of action. Will I continue to invest in S-chip? Probably yes.

[AlphaQuant]

CIMB ceasing coverage (after calling an outperform recently!)

********************

We have been sharing Glaucus’s concerns for some time, especially the first two. MINZ had issued newshares (98m) to Indofood on 15 Feb13, at S$0.915 apiece or 0.7x its FY12
book value. It soon followed this upwith an unsuccessful attempt to issue bonds on 8 Mar 13. We found this intensive capital-raising worrying. The company’s willingness to dilute EPS at such an unfavourable price suggests to us a desperate need for cash when this shouldn’t have been the case. Capex was supposed to be
lower this year (according to guidance) with positive free cash flow anticipated by us. Further, Olympus Capital, one of its major shareholders before IPO, had disposed of its remaining 10.3% stake on 6 Dec 12. It is hard to believe management was not aware of both Indofood’s and Olympus Capital’s intentions, considering their transactions were back-to-back. If Indofood’s expertise had been
what MINZ was solely after, management could have arranged
for Indofood to take over Olympus’s stake.
Pressure from investors to pay dividends probably weighed on the
company. We sensed that it was going to pay dividends for the first
time this quarter, which could have catalysed its share price; hence, our previous Outperform. However, we believe raising equity from Indofood to pay dividends would have compromised the quality of any payout, as it could have represented a mere “transfer” of cash.
We were also worried by its spiking receivable days. FY12 receivable days were 85, up from 45 in FY10 and 43 in FY11. See our report: Look beyond
the stellar earnings.