The Groupâs net cash and bank balances worked out to an equivalent of RMB53.2 cents per ordinary share. Hope it's real.... in which case, it makes up 71% of the market cap of Synear. Value stock?
Singapore listed Synear is one of the largest quick-frozen food manufacturers inChina, also the exclusive supplier of quick-frozen stuffed food for theBeijing 2008 Olympic Games. Synear is also regarded as the 2008 most valuable Chinese brand. Their products have been exported tothe United States,Canada,France,Italy,Japan,Singapore and other countries and regions, with the annual sales reaching 30 billion RMB Yuan The growth rate of quick-frozen food products inChina is about 10% to 30%, with increasing popularity each year
In its 1Q 11 results, Syneer reported under its non-current assets, Land Use Rights of RMB 723 million. This is already a tell tale sign that investors should seriously take notice of.
I held a small position of this stock in early 2010 because of its attractive cash pile. Later, I attended its AGM and found out (to my horror) that Syneer had been under pressure to move out from its existing manufacturing premises and therefore needed new premises to replace its existing ones. Its cash pile then of about one billion RMB would likely be exhausted once this move is completed. Furthermore, Syneer would not get any compensation for vacating its existing premises, as it is not the owner. Syneer’s earnings and business prospects are also nothing to shout about. Lesson Learned: Do not overlook the importance of understanding well a company’s business, before investing in it. What may seen like a can of abalone could well turn out to be a can of worms.
Hi observer2 - Thanks for the alert though I have never own this stock. Checked their YE2010 report which stated amortisation of land use rights = Rmb15 million. Isn't this a bit low? Agree that its impt. to understand a company's biz well before investing in it.
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