I was a very angry man when I entered the hall for the EGM and all of us were firing shots at the board but when we leave feel more positive as we know first and foremost the cash is real and well guarded and there is no expansion within the existing business to siphon the money off instead a totally new business which will be vetted by the independent directors.
Both independent directors have much experience in China
Independent director Lim Yoke Hean is also an independent director of another S-Chip company, World Precision and also held the position of CEO in Pheim Asset Management and currently a business consultant and deal maker.
Independent director Low Wai Cheong- Wai Cheong is frequently invited to share his Corporate China experiences at business seminars organised by organizations like the Singapore Chinese Chamber of Commerce & Industry, Singapore Trade Development Board, International Enterprise Singapore, Spring Singapore, Federation of Hong Kong Business Associations Worldwide, the Chinese Embassy in Singapore and Hong Kong.
Wai Cheong practice areas cover the legal and regulatory aspects of Capital Markets, Corporate Finance & Securities, as well as Company Restructurings & Corporate Rescues. He was previously based in Shanghai, China and is known in Singapore for his Corporate China expertise. .
Both independent directors have much experience dealing with companies in China,restructuring,corporate governance.Their expertise is very reassuring as most of us are very fearful about S-Chips cheats.
In their many years of experience both of them must have dealt with companies in the situation China Fibretech and advised them on the steps forward.
Their credentials speak for itself.
They know what their doing .When I left the EGM I feel more enlighthened about how the independent directors handle a case like China Fibretech and how it should be handled. I appreciated their slow but steady handling of the company instead of rushing through ending in a disaster.
Pheim is censored by MAS for insider trading,Andrew was brought in to restore confidence. The person in question is founder of pheim assets Dr Tan Chong Koay
I am well aware that Mr Lim Yoke Hean is not the CEO of Pheim Asset Management but being a CEO before shows his credential and experience in the investment arena.
I always mentioned that he was a CEO ie. in the past.
If Pheim is censured by MAS that's good it means the people involved know they are being watched.
As you said the person in question was Dr Tan Chong Koay and not Mr Lim Yoke Hean.Even if it is Mr Lim Yoke Hean it is positive as he knows he has been warned for inappropriate practice and in the watchlist.There will be no second chance.
To be a CEO in an asset management firm you must have many years of experience and credentials and the position also gives you access to much privileged information about stock the market and its practices.
All this is positive for China Fibretech to have an independent director who has much exposure to the workings of listed companies.It does not matter whether he was CEO then or now, as long he has been one it just adds to his credential.It gives me more confidence.
Many people including the independent directors,the CEO,the retail investors and other investors know that this company is closely monitored which is big plus for its cash plus as it gives no incentive to hanky panky.
To top it of we have been given much reassurance by the independent directors what steps are being taken to safeguard retail investors interest including improving shareholder value. The management and board are well aware of the frustration of the investment public. They are under pressure to do something.
One of the steps they took lately was to reduce the bank loan which was there at Rmb50million for more than 3 years which was reduced to Rmb12.8 million and they have plan to reduce it further. They are also frustrated with the fabric industry after waiting very long it did not recover and they wrote off Rmb 8.9 million work in progress for expansion by shelving it.Now they want to move to a totally new business which is closely monitored and vetted by the independent directors who reassured they were not going to blindly accept any proposal.
What assurance do u need for now? Its good that the company has about 85% of assets in cash which gives them much flexibility in this downturn to diversify.Its always best to invest in a downturn on the cheap and reap the benefits in the upturn.Company has concluded there is not going to be much upturn in the fabric industry so they are not expanding it and maintain existing facilities for the current scale of business.
In conclusion , I think the company has a conservative strategy which may not give immediate returns but a more certain returns in the future. I don't think they are stupid enough to chose something that's going to fail instead something that can give them more assurance that it is going to succeed. When this happens the share price is going to shoot through the roof. The first catalyst for the shares is company accepting a well thought proposal which is well communicated to the shareholders. With confidence share price will shoot up and it can happen anytime.
The next catalyst will be the performance of the new venture.
As long as the cash is real even without the business venture the share price should be about 10c.
As more and more begin to believe that the cash is safe the price of shares is going to march towards 10c.The Chingkays too need assurance the money is real for them to push the price to more realistic level and that is above 10c. I believe they must be more convinced now about the cash. No business is without a risk even an existing business. But China Fibretech has many choices in this downturn to choose the one they are most comfortable and at the same time bringing good returns.
Nava, If the 2 independent directors are able to put money into their words by buying some shares, they will definitely ignite interest. Are you able to contact them and raise this point?
Who knows the independent directors could be accumulating shares using proxy account while is cheap.There are times volume went up but not the price.
Triumph Capital Managment CEO,Pu Wei Dong and Forte Capital have both become the latest top 20 shareholders in the last Annual Report
They must be knowing something as the Independent director Mr Lim Yoke Hean is formerly a CEO in an asset management company and he must have friends from the asset management network.
He even mentioned in the EGM one of the top 20 shareholders had made business proposal to China Fibretech knowing that CF is looking into diversification with the cash haul.I guess it is Pu Wei Dong as he has much experience in China. He must be knowing the insight of the company to have made such proposal and lately increasing his stake in China Fibretech.
I dont think Pu Wei Dong and Forte Capital would have increased their stake in China Fibretech without doing their homework.Perhaps they would have talked to the management and directors to get the insight or visited the company in China.
They have the resources and expertise to analyse the soundness of their potential investments.
On our part we should just pressure the management and the board to be more open and forthcoming about the company plan like what we found out during the last EGM.
At least we now know that the cash is real and management is looking into better returns for the cash through diversification instead of getting stuck in a sunset industry.
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