China Minzhong Food Corporation

[Wildreamz]

If all these statements made were true, that Indofood's have done all the due diligence necessary, and also would make use of this opportunity to leverage on each companies strength and resources, China Minzhong would be a screaming buy at the current valuation.

[egghead]

If all these statements made were true, that Indofood's have done all the due diligence necessary, and also would make use of this opportunity to leverage on each companies strength and resources, China Minzhong would be a screaming buy at the current valuation.

Yes, as usual, it is a tug of war between greed and fear.

[AlphaQuant]

No access to computer, so I'll be brief. New update on sgx website, Indofood's offer turns unconditional. There appears to be abitrage opportunity if we can snap shares up at $1.115 using the right discount broker.

that's exactly my point - the previous offer was mandatory and conditional on 50% acceptances. Now that the offer is unconditional, selling @ 1.115 does not make much sense since the floor is solid. i wonder who sold those 1.8mio shares @ 1.115.

but i get the other side of the argument as well - to get out and to deploy the cash elsewhere for better use but seriously... the bloke should have gotten out yday already at the first chance.....

[specuvestor]

If all these statements made were true, that Indofood's have done all the due diligence necessary, and also would make use of this opportunity to leverage on each companies strength and resources, China Minzhong would be a screaming buy at the current valuation.

As per my previous post, I fail to see why .76X Book and 1% yield is a screaming buy for an S-chip. The valuation has swung big time over the past 1 week but value doesn't

[egghead]

that's exactly my point - the previous offer was mandatory and conditional on 50% acceptances. Now that the offer is unconditional, selling @ 1.115 does not make much sense since the floor is solid. i wonder who sold those 1.8mio shares @ 1.115.

I'm not so sure about trying to make that <0.5% on a arbitrage trade. Your capital has to be at least $1m to make that small delta meaningful.

[AlphaQuant]

that's exactly my point - the previous offer was mandatory and conditional on 50% acceptances. Now that the offer is unconditional, selling @ 1.115 does not make much sense since the floor is solid. i wonder who sold those 1.8mio shares @ 1.115.

I'm not so sure about trying to make that <0.5% on a arbitrage trade. Your capital has to be at least $1m to make that small delta meaningful.

well i wasn't referring to the arbitrage idea - i was referring to the fact the offer is now unconditional.

[Wildreamz]

If all these statements made were true, that Indofood's have done all the due diligence necessary, and also would make use of this opportunity to leverage on each companies strength and resources, China Minzhong would be a screaming buy at the current valuation.

As per my previous post, I fail to see why .76X Book and 1% yield is a screaming buy for an S-chip. The valuation has swung big time over the past 1 week but value doesn't

S-Chip or not is secondary, the real concern is the corperate governance issue and the likelyhood of getting a return on your investment. By return, I mean owners earnings and not yield. Value of the company in my opinion changed due to increase certainty on future earnings, and increased likelyhood of growth.

This is similar to Neratels position last year.

[Greenrookie]

If all these statements made were true, that Indofood's have done all the due diligence necessary, and also would make use of this opportunity to leverage on each companies strength and resources, China Minzhong would be a screaming buy at the current valuation.

As per my previous post, I fail to see why .76X Book and 1% yield is a screaming buy for an S-chip. The valuation has swung big time over the past 1 week but value doesn't

S-Chip or not is secondary, the real concern is the corperate governance issue and the likelyhood of getting a return on your investment. By return, I mean owners earnings and not yield. Value of the company in my opinion changed due to increase certainty on future earnings, and increased likelyhood of growth.

This is similar to Neratels position last year.

How fast things change from extreme bearish to exburance, where has all the FCF, MOS concerns gone to.

1) while I think glauscus has lost the battle, I dun think their research is worthless. If documentation is grey in china, how does auditors do a good job?

I also has a very imaginative thought. cMZ is not worthless, but they might really have some serious lapses in documentation, so in order not to suffer irrevocable damage, Indofood decide to spend some money to save its already in 300 over million, just a phone call to the top 20 shareholders, ask them not to sell, or accept the offer, the amount need to buy assurance is then a small sum to pay as compare to losing all its investment, and it reputation along with it

[dzwm87]

How fast things change from extreme bearish to exuberance, where has all the FCF, MOS concerns gone to.

Isn't it interesting? the tone changes just over a few pages back on this thread.. herding mentality is evident everywhere.

[specuvestor]

If all these statements made were true, that Indofood's have done all the due diligence necessary, and also would make use of this opportunity to leverage on each companies strength and resources, China Minzhong would be a screaming buy at the current valuation.

As per my previous post, I fail to see why .76X Book and 1% yield is a screaming buy for an S-chip. The valuation has swung big time over the past 1 week but value doesn't

S-Chip or not is secondary, the real concern is the corperate governance issue and the likelyhood of getting a return on your investment. By return, I mean owners earnings and not yield. Value of the company in my opinion changed due to increase certainty on future earnings, and increased likelyhood of growth.

This is similar to Neratels position last year.

S-chips or not is PRIMARY because it warrants a larger MOS. You may have missed my previous posts on this. Though I am not adverse to investing into S-chip as some forumers, it still buoys down to whether one thinks a 90% chance to get duds is a good reward for the effort put in. Corporate governance is not the root issue per se but rather that legal claims cannot be enforced into China which provide incentives to executives in wrong doing. Hence bird in hand dividend yield becomes more paramount than earnings yield.

What has changed in the past 1 week such that earnings and growth are more likely? Indofood change from largest shareholder to larger largest shareholder? You were fortunate that MINZ didn't lift suspension before an offer. It could easily had been like an OLAM when it traded first before the white knight came in. Then things would turn out very different for you and I guess a lot of other forumers keen on this trade. I'm not trying to throw a wet blanket but I think these events helped us to form our investment philosophies and learn from our experiences; it should not be wasted.

1) while I think glauscus has lost the battle, I dun think their research is worthless. If documentation is grey in china, how does auditors do a good job?

I also has a very imaginative thought. cMZ is not worthless, but they might really have some serious lapses in documentation, so in order not to suffer irrevocable damage, Indofood decide to spend some money to save its already in 300 over million, just a phone call to the top 20 shareholders, ask them not to sell, or accept the offer, the amount need to buy assurance is then a small sum to pay as compare to losing all its investment, and it reputation along with it

Like I said IMHO I think Glaucus views are technically valid and probably right. The problem with that is that that could be said for a majority of Chinese businesses where paperwork sucks or at times intentionally "missing". Question is whether paperworks affect operations? But paperworks gives OPMI better comfort and MOS in assessing value.

Certainly Indofood offering at SGD1.12 is very strange considering their 6 months period is ending soon, so they could have been opportunistic and done it at say 70cts.