Advertisement for Besunyen's Detox Tea product which accounted for 51% of the group's sales in 2013. Photo: CompanySTOCK: Besunyen Holdings (HK:926). It is a leading provider of therapeutic tea products in China, and is engaged in the development, production, sales and marketing of therapeutic teas and other health food products. Its products use exclusive formulas and are manufactured with high quality traditional Chinese medicine and tea leaves for users with mild chronic or recurring health problems as well as those seeking to maintain a healthy body and lifestyle.
BUYER: Arthur Wong Lap Tat bought a total of 800,000 shares of Besunyen on three days -- April 1, 2, 3 this year.
His daily average purchase prices were 44 cents, 43.9 cents and 46 cents, respectively.
Mr Wong, who now holds 1.5 million shares of Besunyen, has been an independent non-executive director of Besunyen for nearly four years, and is also the chairman of its audit committee.
Arthur Wong Lap Tat, 54.COMPANY RESULTS: Besunyen Holdings announced on April 2 a loss attributable to shareholders of RMB 89.976 million for 2013, which was sharply less than the loss of RMB 342.187 million in 2012.At 44 HK cents, it trades at a sharp discount to its book value of 91.55 HK cents a share.
Interestingly, its gross profit margin increased to 83.3% in 2013 from 82.5% in 2012. Despite the high margin, Besunyen bled red ink because of high selling and marketing expenses and administrative expenses.
Another notable fact: As at end-2013, it had cash, pledged bank deposits and bank balances totalling RMB 422 million -- and zero borrowings -- as compared to RMB448 million cash and bank balance as at end-2012.
The high cash position can be understood in the light of Besunyen's general policy of requiring distributors to pay before the delivery of products.
However, three years of losses have taken their toll. Besunyen's bank balance and cash have shrunk from the RMB1.17 billion level as at end-2010, a hoard that largely arose from RMB1.13 billion proceeds raised during its IPO in Sept 2010.
Its recent market cap was HK$675 million (or about S$100 m), which is too small for most fund managers to consider buying.
However, Besunyen does have another investment merit -- it's the No.1 provider of therapeutic tea products in the PRC, enjoying a market share of 20.8% and 32.5%, respectively, for laxative products and slimming products.
See company's 2013 results presentation materials here.
Besunyen was listed on the HKEx in Sept 2010. In 2011, its stock traded as high as HK$3 but has languished below HK$1 since 2012 owing to losses suffered in FY 2011, 2012 and 2013. Chart: Quamnet.comPrevious story: BESUNYEN: Weight Loss Teamaker Substantially Slims Down Loss