CHINA FIBRETECH- NET CASH .NAV : 22c . Cash : RMB 437million

ZEN wrote: in the STRAITS TIMES today , the MONEY section hightlighted pennies that had taken a hit and felled due to the saga of blumont , liongold and asiasons ... impacting sentiments on these pennies .

It is recommended that it is worth looking at penny stocks that are fundamentally sound and many stocks are showing very interesting valuation now compared to few weeks ago .
Quoting that " THE FUNDAMENTALS HAVEN'T CHANGED BUT VALUATION HAD " ......

ZEN wrote: After the management and board had engaged the shareholders' concerns (with mixed success), someone spoke up, saying he was a new shareholder, adding: "I've seen hundreds of companies, many of them from China. I'm a professional investor and have been in the market for 30 years.

"What drew me to the company is its conservatism. I accept that cash, share buybacks and dividends are a key consideration for shareholders but if the management doesn't run the company well, those become secondary. After analysing this company, I realise this management understands business cycles. What I read in the prospects section of the annual report indicates that the trend has turned positive. Can we look forward to the company going back to where it was at its IPO in 2008?"


China Fibretech chairman & CEO Wu Xinhua. He owns 50.4% of the company. Photo: annual reportWu Xinhua, the executive chairman and CEO of China Fibretech, which provides dyeing and treatment services that impart special functionalities such as water-resistance and UV-protection to fabrics, replied in Mandarin: "Thank you for appreciating the company.

"I see a pickup in business and expect it to continue for the next three years. But it will be difficult to go back up to the peak achieved during our IPO as there are structural changes in the economy -- manufacturing costs have gone up a lot, GDP growth is slower, and manufacturing competitiveness is not as strong as before.

A structural change that could work in China Fibretech's favour is China's tightening on environmental pollution.

Said Mr Wu: "The local authority is not issuing new licences for this industry and existing operators have to comply with more stringent anti-pollution regulations. Many small ones will be weeded out and this will be beneficial to our company."

Commenting on the company's FY12 results, Lim Yoke Hean, currently the CEO of Pheim Asset Management, who became an independent director of China Fibretech in July 2012, noted that revenue had gone down last year (by 63.5% to RMB 48.6 million) but the net loss (RMB 11.6 million) was not a big one and the operating cashflow was in fact positive.

"It's quite a big achievement," he said.

chinsoonyuen wrote: hope the big chunk of sellers hv come to an end, then there is only one way to go...