China Essence

[Stockerman]

3rd Q result is out. Terrible...Even if company can collect back every single cent of A/R, it cannot pay up for its CB and DBS loans...

[pianist]

is it paying dividends?

[Underdogger]

is it paying dividends?

it has problem surviving this FY, let alone paying out dividends.
NAV has dropped from 60 cents (one year ago) to about 40 cents...

At this rate, not sure if we can see company around by end of this year...

[Stockerman]

A thought came to mind. Can someone accumulate the shares on the cheap and force the company to liquidate at its NAV of some 40 cents?

54.228.000 shares were traded 08/162012 - 12/12/2012. That was the period referred to as "the dumping". During the dumping supposedly Sanlam sold all its' shares, also supposedly none of the other major owners sold a single share.

Today, the very day after the dumping ended, 52.135.000 shares (13,3% of the whole company) have been traded with a price some 40-50% over the weighted average price of the dumping.

My guess is, that a decoy (rather, a bunch of decoys) was assigned to buy anonymously everything Sanlam was selling. That way there was no need for ownership announcements, and that way the buyer had all the time in the world to wait for the poor little fund manager to do what his clients forced him to do. At this stage, as the dumping as we know it is over, the real buyer takes over the shares from decoy(s) at a formerly set premium over what was paid during the autumn.

Any other guesses? Let's see if we get an ownership announcement in near future...

[specuvestor]

Yes IF 1) you can control the board 2) enforce liquidation in China 3) repatriate RMB overseas to Singapore investors

[jzk]

A thought came to mind. Can someone accumulate the shares on the cheap and force the company to liquidate at its NAV of some 40 cents?

54.228.000 shares were traded 08/162012 - 12/12/2012. That was the period referred to as "the dumping". During the dumping supposedly Sanlam sold all its' shares, also supposedly none of the other major owners sold a single share.

Today, the very day after the dumping ended, 52.135.000 shares (13,3% of the whole company) have been traded with a price some 40-50% over the weighted average price of the dumping.

My guess is, that a decoy (rather, a bunch of decoys) was assigned to buy anonymously everything Sanlam was selling. That way there was no need for ownership announcements, and that way the buyer had all the time in the world to wait for the poor little fund manager to do what his clients forced him to do. At this stage, as the dumping as we know it is over, the real buyer takes over the shares from decoy(s) at a formerly set premium over what was paid during the autumn.

Any other guesses? Let's see if we get an ownership announcement in near future...

Seems highly implausible. When I bought myself in (late 2010), my guess was, that the company slowly but surely grows and goes on doing business as normally as possible. I have never been that interested in the current price movements - in my opinion the price wasn't even in the ballpark of where it should have been. Since that moment we have seen all sorts of things happening. De facto defaulting, "supply gluts", freezing potatoes etc etc. This has been an exceptionally bad call from me, but even at this point of story it is very difficult for me to sell the shares. Not that I would mind creating accounting losses.

But my point at this stage is, that NOBODY has ever made a bargain betting on liquidation values. You might get a dirt cheap company by buying shares of good, legitimate and profit making companies at P/B 1 or close. But there have never been examples of buying in at <P/B 0,5 and then setting up a magical liquidation sale.

It is possible, though, that someone is preparing getting this company private for one reason or another. It should be clear for all readers, that under no circumstances is it normal, that 2-10% of the total share capital is traded almost daily from week to week. Especially so in a company with relatively limited share of ownership floating freely. There is an immense amount of artificial trading going on. Why, I don't know. But as time goes on, we will all find that out.

[Stockerman]

"Guan Xi" or "Corruption" is a part and parcel of everyday lives....it is only a matter of degree...some S chips are more "corrupted" than the others...

[Curiousparty]

Share price was dropped despite STI rising....sign of trouble ...probably one step closer to bankruptcy....
this year AGM again in China to "hide" from angry shareholders....Bloody cowards!

we will know whether the company will pull thru in the next few months. If they have NO CASH to start the next harvesting seasons, many shareholders are going to kiss their hard-earned money goodbye....

[Curiousparty]

China Essence is in urgent need of a debt restructuring and capital injection in order to revitalize its balance sheet...it will be a painful process....

But who would want to inject fresh equity into a debt ridden company? Are the CB bondholders, DBS or local govt willing to write off the debt? unlikely...?

[Stockerman]

Ended at 3 cents today...likely to go back below 3 cents by this week. Next week, we might see 2 cents level again...
bad news coming...