Qingmei

This stock has no bottom? It's heading toward

Australian Hunter Hall Group had a stake of 7.41% (47,450,000 shares) in Qingmei before it decided to add a further 89,000 shares on 28 & 29 Feb 2012. However, on 1 March 2012, the management had decided to divest (instead of increasing) its stake and sold a total of 7,285,000 shares between 1 and 22 March 2012. A further 6,843,000 shares were sold from 26 March to 10 April 2012 bringing its stake to 33,411,000 shares or below 5%. Although the reason for their divestment is not clear, one could surmise that it could be due to the widespread negative sentiments prevailing against China stocks especially in USA & Canada, as to cause a Fund to divest a grossly undervalued stock at rock bottom price and at a hefty loss.
It is interesting to note that Hunter's remaining stake in Qingmei (as on 16 Apr 12) is being held under 3 Trust Funds (like Unit Trusts) namely,
            Hunter Hall Value Growth Trust - 17,647,760 shares
            Hunter Hall Global Ethical Trust - 11,038,890 shares
            Hunter Hall Global Value Ltd - 4,724,350 shares
                        TOTAL HOLDING in Qingmei = 33,411,000 shares (4.91%)
Quotations of Hunter's Trust Funds can be found in - www.hunterhall.com.au/prices.php   
Although Hunter Hall Value Growth Trust holds the largest portion of Qingmei's share, this stake constitutes only a tiny fraction of its total holding size, which is A$916 million. The value of the Qingmei holding is less than A$2 million or 0.2%
The Hunter Hall Group is obviously rebalancing its portfolio to divest completely its stake in Qingmei at a great loss. As the stock price of Qingmei has fallen far below its true worth and with Qingmei issuing a negative profit guidance for its 3Q12 results, those with negative mindsets see numerous "problems" in Qingmei and all the reasons to avoid this S-chips. However, those with positive mindsets (or "millionaires mindset" as Adam Khoo also puts it) see the possibility of a great money making opportunity ahead. As Qingmei’s daily turnover seldom exceeds 5 million during this period, its price is certain to hit ultra low by the time Hunter Hall divested their last few lots of the shares.
 

Great stuff. Analysts like you make Nextinsight the best value-stock website in Singapore. How do we know when hunter hall has completely divested? Does it show on its website?

Hey thanks for the nice words on our website. btw, peterlynch, you have a name that is destined for greatness in the annals of value investing.

If hunter hall is going for complete divestment, at what price will the buyers emerge to absorb the selling? They seems to be at rush to offload the shares given the rock bottom price they are offloading at. The offloading and the profit guidance should be a dampener for any potential rally. But the price is really dirt cheap. Even if qingmei is to have zero profits for the next 2 quarters PE is just slightly above 2. I tried mt hands just before the market close to get some at 0.104, but couldn't get any.. Will try a lower bid tomorrow.

 
The total transacted volume for Qingmei from 11 to 19 April 2012 was close to 30 million shares. If we were to assume that around 40 to 50% of the sales were from Hunter Hall, we could expect them to sell a further 16 to 20 million shares over the next several sessions. My guess is that they could finish selling all the remaining shares by the end of the month. As their stake is now below 5%, they are not obliged to notify SGX of any further sales.
[hr]
[peterlynch 19-04-2012]:
Great stuff. Analysts like you make Nextinsight the best value-stock website in Singapore. How do we know when hunter hall has completely divested? Does it show on its website?