Delong Holdings

[growthinvestor]

Operational leverage where the rise in revenue in proportionally greater than the fixed costs. It is owing to the steel prices increase.

Their SGA has been relatively fixed, but it is the interplay between COGS and revenue.

does the EPS have more room to grow?

Can the accounting be trusted?

it would seem this company is still undervalued even at $5.6

[kelvesy]

You have to scan through Ding Liguo using his Chinese name and all the past due diligence transactions made between Evraz (Alexander Abramov and Roman Abramovich) and Delong.

some background: https://www.reuters.com/article/us-evraz...GU20090818

I am not saying it is clean and I am not saying the numbers cannot be trusted as well.

[Sumeria]

My assessment of Ding Liguo through reading up on his life story (especially the use of the words "Buddha Dhamma" in the interviews) as well as meeting the man face to face during the latest AGM has turned out quite correct. Delong has just declared a dividend per share of 55 ct, which at current share price represents a 8.7% yield. No wonder the stock is about the only recent-high stock on SGX in recent days.

[kelvesy]

Hey Sumeria, I did the same checks as you. Ding Liguo is a reputable entrepreneur and the city's mayor used his plant as a role model for environmental sustainability. School also organized trips for their students to visit his plants.

[VincentWong]

Hey Kelvin and Sumeria I'm Vincent from IN found this share about a year ago from this forum and I'm thankful of that.
Have a big dividend yield thanks to early investment. Hopefully they could give final dividend as well and at the same time expanding their business not just in steel mill but also in other industry(China is still a land full of opportunity). The dividend actually potentially reflect another good news. It could indicate the cash at indonesia project is sufficient after the capital injection. which will also mean it is likely the steel mill will operate in schedule. If Chinese government keep its current policy the steel price would remain stable. In addition, price will be less volatile as the consolidation really go as government plan.

[Squirrel]

$7 cash offer for Delong Holdings

[weijian]

Hi,
May I know where do u find it was transacted $7 per share?

As disclosed by the co to SGX on 1 June: "On 1 June 2018, Best Decade Holdings Limited ("Best Decade") entered into a sale and purchase agreement with EVRAZ Group S.A. ("Evraz") and Vollin Holdings Ltd ("Vollin") to acquire 16,569,599 and 2,522,100 Shares from Evraz and Vollin respectively (the "Acquisition"), collectively representing approximately 17.33% of the total number of Shares. The Acquisition will result in Best Decade obtaining an approximately 75.56% interest in the total number of Shares."

Price paid as disclosed: US$100,865,354, which translates to US$5.2832 per share, or about S$7.07 per share.

Read also article on Nextinsight: https://www.nextinsight.net/story-archiv...fell-swoop

Its fuzzy. Now that the takeover deal has been called off, we got to know that the highest price paid in the June transaction was S$7.42.

Based on current exchange rates (1usd:1.38sgd), US$5.2832 would translate to ~S$7.30 - Either there was a range of prices paid in the June transaction or the source above (since it wasn't disclosed on SGX) isn't correct?

http://infopub.sgx.com/FileOpen/Withdraw...eID=529213

That said. It seems like some of the financial advisors for the Chairman were amateurs to start with? If there were doing their job well, they should have knowledge of rule17.1 and wouldn't have triggered an offer in the first place?

[Terry]

Maybe it's a deliberate move to place an upper price limit @ $7. While he scope up what's below $7 during this period.

[Coco]

When the deal was signed, on 1 June, Evraz was transparent about the price being $7.42 sgd.
http://www.evraz.com/media/news/98398/

This link to Evraz website was cited in https://www.nextinsight.net/story-archiv...hareholder

However, the SGX announcement by Delong didn't give a breakdown of the 2 transactions involving Evraz & Vollin, so the 2 transacted prices were not disclosed.

http://infopub.sgx.com/FileOpen/_FORM3_B...eID=508547

[Sumeria]

I wonder if anyone (including the proper authorities) has considered whether Best Decade has an obligation to raise its offer to $7.42 regardless of their reasons for calling off the deal? After all, there might be some investors/traders who bought into the counter post their announcement and as a result, incur a loss at the current share price. Also, it sets a very poor precedence for future takeover offers if an offeror can simply change its mind due to a negligence (which in this case is rather bizarre, given that even small investors know of offer price rules) by itself or its adviser. What will stop future offerors from withdrawing their offers too, giving a similar excuse, if this one gets pass SGX or the SIC?

The higher offer price will only raise Best Decade's takeover outlay by $11.3m (in fact, lower than this amount since Best Decade bought more than 1m shares below $7 prior to the trading halt), about 6% more than the original sum of about $188m, based on the initial offer price of $7. This is a small penalty, but it will go a long way to encourage advisers/offerors to more professional and diligent in future.