E-Commodities Holdings (1733.HK)

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Any opinions / facts / rumors etc ... ?

Coal logistics business

In 2012, Jonestown Research issued a report, making several allegations, one allegation that the company overstated its
inventories by HK$1bn
Took over and operated a coal mine in 2012. Downturn in coal prices led to huge losses 2012-2015
gave up mining business, only logistics again
Defaulted on bond interests in 2015
made a deal with bond holders, equities for bonds, since then only fraction of debt remaining
changed their name, formerly Winsway
first half year 2016 only small operational loss (small gain from operations, small loss incl. finance cost) 
second half huge increase in revenue an earnings
flooding hkexnews with news
202 full-time employees in the Group (excluding 713 dispatch staff from domestic subsidiaries) generating 13.5 billion HKD revenue

Crazy valuation
Last trading at 1.09 HKD
EPS 1.48 HKD, about 0.50 HKD from operation. 
0.077 cents dividend declared (approx 7% of last trading)


Say business depending very much on price of coking coal, which exploded in 2nd half of 2016 and is still much higher than before:

So, what is going on here?
Second half 2016 operational result annualized would result in a PE of about 1. 
Coking coal price still high, and even in first half 2016, at historically low levels, only a small loss.

However, the market does not appear to buy into this story.

Issued Shares: 3,093,167,319 (as at 7/3/2017)
Market Cap HKD 3,402,484,051

FY 2016
Profit/(loss) from operating activities 1,165,767
Net finance costs (148,374)

H1 2016
Profit/(loss) from operating activities 89,406
Net finance costs (115,579)


Profit from operating activities less finance cost roughly 1 billion in H2 2016.
Then tax has to be subtracted.
Second half 2016 operational result annualized would result in a PE of roughly 2 (not 1).
Australian coking coal up 10% yesterday, closing on a multi year high


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