LafeCorp: Worth a look

Aha! Final dividend proposed USD0.5 cent. No wonder the company has been doing all the buyback. Cos the dividend yield is about 10%.

And the NAV is US$14 cents =  17 Singapore cents. While the stock price is only 6.6 SG cents.

Sometimes it all becomes clear on hindsight.

Good news for shareholders but…. why Lafe never explained how come there is so much more money coming in ????


The Board of Directors of Lafe Corporation Limited (“the Company") refers to the announcement made on 17 December 2010 on the Disposal of Investment Property at Panyu District in the People's Republic of China and wishes to announce that the Company has been notified that it will receive an additional compensation amounting to RMB159.5 million (approximately US$25.3 million). Such additional compensation is expected to be received by the Group in equal monthly installments commencing from the third quarter of 2012 until October 2014.

Lafe is doing nicely, up 0.6 cent = 7.9 cents stock price.
Still at such a major discount to NTA of US15.58 cents, or S$0.1948 .

-   We note that SC Global is up as much as 7% today, past the S$1.80 offer
by Simon Cheong.

-   Why? To avoid land penalty charges (estimated at ~S$70m), SC Global
must fulfill 2 criteria:
-    It cannot be a listed company
-    As a delisted company, it cannot have foreign shareholders

-    To delist, the public float must fall below 10%. Excluding Simon
Cheong, Wheelock and directors’ stakes (which are all not part of public
float), only ~11% of shareholders needs to take up offer for SC Global to
be delisted. We think delisting is likely.

-    But after delisting, SC Global would still need to buy out foreign
shareholders who did not take the offer, if SC Global wants to avoid land
penalty charges

-    Hence foreign shareholders, like Wheelock, can potentially hold out
for a better price than S$1.80 after delisting. That is why they are buying
above the offer price.

-    We advise all local shareholders to sell at this price. Only foreign
shareholders who are willing to hold significant illiquid delisted shares
should consider buying now.

Why sell? So that you can buy cheap? Do you know why we can can Wheelock? Because we lock wheels so that cannot move forward!