This stock will be 20c without needing to consolidate before the new ruling kicks in where all mainboard listed stocks have to trade above 20 .There is no excuse for management to see the stock price to be below 20c with so much of fire power in terms of cash and by then they would have diversified.With better fundamentals and cash this share will reach 20c without consolidation. Consolidation will only make free float very low and it is not worth for the stock to be listed with very poor volume traded.Probably the reason for SGX wanting the minimum 20c is for those low value stock forced to be delisted or to also reduce dilution by share placement and rights issue for these low valued stocks.
So far unlike other S-Chips China Fibretech has not raised additional capital through placement or rights issue.Management is also aware retail investors will not be happy if they have such plan in the future as in every meeting with the board the shareholders are demanding for better shareholder value.
Indeed CF has improved its cash holding of about RMB150 million at IPO to in excess of RMB 400 million today without any additional capital raised through placement or rights issue. Besides, over the years company has been upgrading its equipment to do higher value dyeing service and yet the cash value has grown
If CF forced to delist is even better for shareholders as the cash value for now is 19-20c and the net tangible assets is about 22c.
Confirmed cash of about 19c, diversification and the new minimum 20c trading price for the share all pointing towards more than 10c trading price for this counter in the near future.
I believe SGX has been putting pressure on these less than 20c stocks to improve their share price or ship out from the mainboard. 20c rule is one of the ways SGX forcing these S-Chips to improve shareholder value. Many S-Chips like Changtian very high in cash and NTA above 30c but trading at below 5c.
Announcement should be coming anytime soon as the independent directors said they are actively vetting many business proposals. They want to make sure its safe bet with good returns. Knowing Independent director Lim Yoke Hean a deal maker,business consultant on diversification,expansion and restructuring of business and Independent director Low Wai Cheong is a legal expert on corporate governance and restructuring including china based companies their inputs will be valuable in selecting the right business.
Incidentally,Mr Lim Yoke Hean is also an independent director of World Precision and Mr Low Wai Chiang is also an independent director of Starland a Singapore based property company doing property development in China.
WHEN THE ANNOUNCEMENT OF DIVERSIFICATION MADE THIS COUNTER WILL FLY AS IT IS A CONFIRMATION OF CASH AS WELL AS BETTER UTILISATION OF CAPITAL.
The news alone is enough to trigger the share price to zoom and subsequently the execution and the performance of the new business will dictate the further upside.
The announcement hopefully trigger the share price to go upto 10c or more. Based on what I learn from the EGM the board and management are under pressure to show improvement to shareholder value and the best way they said is proper diversification..
We cannot predict when the announcement will be made but once it is made it will be too late to be in the market as the price would have shot up significantly.Its difficult to compete with the CKs when the market is moving. The share price may open with a leg up so scary to buy at that stage.
the Board of Directors of the Company wishes to announce that the Seller, the Company’s wholly owned subsidiary, is in receipt of the cash balance consideration of RMB40,000,000 from the Buyer (the “Balance Consideration”). The payment of the Balance Consideration, making up the total paid up
consideration of RMB48,689,000, was the only other condition precedent for the completion of the sale and purchase agreement, apart from obtaining the Shareholders’ approval for the Disposal of Land, which has been obtained on 29 September 2014.
The Seller and the Buyer are currently in the process of transferring the land use right and the property on the Land to the Buyer, and settling tax clearance and other fees related to the title transfer.
Cks too have become selective when it comes to S-Chips as many would have got burnt due to scams.
As mentioned before Triumph capital has become top 20 shareholder in China Fibretech in the latest Annual Report and also Forte Capital.
Triumph Capital too got burnt by Sinopipe from the mainboard and now after the counter is suspended the CEO of Triumph Capital has become the interim CEO of Sinopiple. Dr Pu Wei Dong the CEO of Triumph capital was formally an analyst with UOB Kay Hian. After got burnt in Sinopipe I believe Dr Pu is more experienced,careful and selective. He must have done his homework by perhaps personally talking to the management and the board before he decided to select China Fibretech.The investment of Dr Pu in China Fibretech must be his confidence with China Fibretech as a highly undervalued stock with great potential.
I think Dr Pu with much exposure to fund management and China knows better than me about China Fibretech. Being a fund manager and China Based he has the experience to identify counters with great potential.
Who knows he could be now a top 10 investor from top 20 investor at the time the annual report was published.
It is also his interest to see the management to do the right thing and the cash is safe as he is vested in this counter.
I think the investment public will accept if the price of China Fibretech goes up to 10 and still say it is undervalued as the assets are predominantly cash at almost 20c and not much to write down if there is any, as other assets are only about 3-4cents.Combined cash and assets with be NTA 23-24c
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