Koon Yew Yin's Investment In Xingquan.

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Got an off topic comment from the posting "Why Perisai Is Rated So High By The Local Analysts?"


  • gwynwelsh said... Sorry out of topic. But I could not help to point out to all and sundry that Coastal went so high from the low of RM2.25. It was strongly suggested by Koon Yew Yin, the same person who holds 32 million Xingquan shares. If he is right on Coastal, I believe he will to on Xingquan.

Xingquan had been blogged many times before too. Take your pick of posting for your reading pleasure. :)


Hmmm... I actually undertstand very well your thinking. It's normal and it's common.

Many do like to look for their stock market hero and they reckon it's a safe bet to follow their stock selections.

And I have seen some who are rewarded with such a strategy.

And I have seen some who crashed and burned badly.

Yes, we are all aware of Koon Yew Yin INVESTMENT in Xingquan.

And for the record, in Nov 2010's posting More Balanced View On Xingquan.

Do read the number of comments stating the fact that Koon Yew Yin had invested in Xingquan. Xingquan then was around 1.60+.

Personally? I gave the following remarks back in Nov 2010.


  • ps: how many quarterly earnings has Xingquan reported since listing?

  • ps/ps: how has Xingquan reallly fared?

  • ps/ps/ps: has Xingquan's performance so far being up to par? Has it beat 'expectations'? or has it grossly perform below expectations.

Fast forward to Xingquan's latest review posting Review Of Xingquan's Earnings on Feb 2011.

The questions raised then:


  1. Yeah, there's visible growth in sales revenue....

  2. but where's the profit???

  3. Cash... yeah... capex.... but... it shrank so much????

  4. And then.... the ..... increase in receivables .... is simply .... crazy!!!

Of course some did not agree. See postings subsequently.


And so here we are. Yet another comment stating Koon Yew Yin's investment in Xingquan.

Now.. I am not here to judge Koon Yew Yin investment. Please get this issue correct first.

And if any reader wants to adopt the follow their stock market hero strategy, please do so by all means. Yes, please remember I am not your friendly investment advisor. :)

However, what these series of postings merely offers a second opinion on the justification if one were to invest in Xingquan based on one's own logical reasoning.

Yes, let's put our brain cells to work and think the justification behind an investment in Xingquan itself. Yes, let's take the Koon Yew Yin equation out of the picture and ask ourself a simple question: Is there really a justification to invest in Xingquan?

1. The stock is trading at a cheap PE multiple.

A. Correct or wrong, all Chinese stocks listed abroad are all traded at a low pe multiple. Take the example of Taisan which is listed on the SGX ( see Regarding Xingquan And Taisan ) and as one can seen in the example of Xingquan and Taisan, low PE stocks can still sink quite a bit!

B. Now, if and when Xingquan's TDR is listed, Xingquan's share will increase from 307,330,000 to 353,429,500 once the TDR is issued. Xingquan's EPS WILL be diluted from the TDR.

2. Is there growth in earnings?

Yes, when can buy value and if there is value, perhaps growth in earnings is not important. Very true.

But because there is possible future dilution in earnings per share once Xingquan completes its TDR, this growth in earnings becomes important!

Think about it for a moment.

Say the eps is 10 sen and there is no growth. Flat earnings.

Now if the numbers of shares increase by 15%, the eps will shrink by about 15%.

And if the EPS shrinks by that much, the stock would be valued lower, sometimes much lower since the company would be deemed unattractive due to lack of earnings.

So does Xingquan have earnings growth so far? Is there any indication? My answer based on Feb 2011 posting, Review Of Xingquan's Earnings, is no. 3. Is there balance sheet weakness?

Again, my answer based on Feb 2011 posting, Review Of Xingquan's Earnings, is no.

4. Are there issues with the company?

Company had tons of money but as pointed by snowball, the company is earnings very low interest for their money. Why? This is an important issue to address.

Company had lots of money but most of the money had been used in their store expansion and more incredibly they did a whole brand makeover. And they want to raise more money using TDR.

And if one is a minority shareholder, won't one be left wondering what is happening?

And what about the dividends?

How?

Does Xingquan looks like a top notch investment idea?

Think about it....

Ah.. Some would argue that perhaps all these reasonings are not important. A waste of time. Most important is that one follows the stock market hero.

Well... all I can say is.... good luck.

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