Cinema-Blend-whereiszemoola

There's two rather interesting or revealing passages from the following article on the Edge :Ananda could see RM4b gain from Tanjong buyout

•  ................
  If the touted price tags for the power and gaming assets are true, Ananda would in less than two years managed to sell two of Tanjong’s prized assets for about RM12.85 billion — over RM4 billion or some 46% more money than the RM8.8 billion Tanjong valued using the RM21.80 per share minorities were bought-out for in July 2010.
  
  .............
  
  Secondly, Ananda’s investment cost is a lot less than the RM8.8 billion Tanjong was valued using the takeover price, as parties that offered to privatise Tanjong already had 49.96% of the group in hand .......

I remembered when Tanjong was privatised many hailed the privatisation because the offer was said to be extremely generous. They praised the generous premium over the stock price.

It was a fantastic payday.

Yeah... but ... have they even wondered if it was even a fair price?

Anyway.... now... apparently someone's going to have a even more fantastic payday!

Yeah... privatisation.... it's such a wonderful business.

But for who?

Maybulk announced its earnings last night.And no, it was not a shocker. Not for me. Do refer to last September's posting (it's a must read) : Maybulk: Does poor corporate governance have a negative impact on a stock?  ( I wonder why some consider Maybulk as an investment grade stock given it's horrific corporate governance! )

Today Maybulk was featured on BTimes: Maybulk confident of staying profitable

• Maybulk confident of staying profitable
  
  By : GOH THEAN EU Published: 2012/02/29
  
  MALAYSIAN Bulk Carriers Bhd (Maybulk) is expected to take advantage of the current depressed freight market by acquiring more vessels this year.
  
  "We are monitoring the situation. We plan to reinvest our profits and to take opportunity of the current depressed freight market.
  
  "If the current situation continues, we expect to see more shipping companies to be in financial distress and maybe face bankruptcy," said chief executive officer Kuok Khoon Kuan briefing yesterday.
  
  He added that the value of vessels were at "rock bottom" and that buyers could "choose and pick" the vessels they want.
  
  Maybulk, which now owns and operates a fleet of 17 vessels, including dry bulk carriers and product tankers, is due to take delivery of three new vessels this year, all of which are under long-term charters.
  
  Currently, the industry is facing lower charter rates due to the oversupply of vessels in the market.
  
  For Maybulk, the average charter rates of its dry bulk carriers were down by 36 per cent to US$16,519 (RM49,781) a day.
  
  "The problem we are facing now is oversupply. There's still growth in the market but there's too much tonnage.
  
  "During such times, too many players will be squeezed and there will be too many bloodbath," said executive chairman Teo Joo Kim.
  
  Nevertheless, Teo believed that the situation will correct itself over time.
  
  Kuok and Teo was speaking to the media and analysts during its full-year financial results briefing.
  
  The company posted a fourth quarter net profit of RM16.81 million, a 75 per cent decline from the same quarter a year ago.
  
  For the full-year, its net profit fell by 61 per cent to RM93.37 million. Full-year revenue declined by about 36 per cent to RM256.31 million.
  
  "Although we reported lower numbers, we are thankful that we managed to stay profitable, especially in such challenging times," Teo said.

Yup, lower dividend and much lower set of earnings.

And there I was posting about China Ouhua Winery Announces Quarterly Losses.

Tonight I saw K-Star's earnings.

K-Star was featured in the posting Them Chinese Shoe Stocks where the EdgeMalaysia featured a massive article called Can China shoe stocks remain at bargains.

The article reasoned the case for them Chinese stocks by saying..

• ...... Most investors are no doubt sceptical about China stocks listed on overseas exchanges, given the numerous accounting issues these companies have faced in the US and Singapore over the last few years.
  
  However, analysts also noted that none of these issues has surfaced in Malaysia yet, and the Chinese companies listed here have consistently delivered strong earnings despite their lacklustre stock price performances.
  
  Xingquan International Sports Holdings Ltd, the first Chinese company listed in Malaysia for close to three years now, has yet to disappoint investors in terms of earnings. Apart from Xingquan, four other shoe companies listed here are Multi Sports Holdings Ltd, XiDeLang Holdings Ltd (XDL), K-Star Sports Ltd, and Maxwell International Holdings Bhd.
  
  According to calculations by The Edge Financial Daily, from 2006 to 2010, the five shoe companies chalked up a compound annual growth rate (CAGR) of at least 30% for both revenue and net profit.
  
  The five China-based shoe stocks are sitting on large cash reserves and most have paid high-yielding dividends.
  
  Their PERs are about two times — well below the market’s broader average of 15 to 16 times.

And the article said the following for K-Star

• K-Star
  K-Star is principally engaged in the design, manufacture and distribution of sports footwear under its own proprietary brands, Dixing and K-Star. The company generates over 700 designs annually.
  
  Its product range covers athletic shoes for running, tennis, basketball and mountain climbing as well as leisure. K-Star is also an OEM and ODM for international sports brands including Umbro, Diadora, Kappa and China’s footwear brand, Double Star.
  
  Its proprietary products are distributed across 18 provinces and three municipalities in China at over 870 retail locations. They are exported to Russia and other markets such as Ukraine, Belarus, the Czech Republic, Poland, Finland, Romania and Hungary. In 2010, K-Star expanded into sports fashion apparel and accessories.
  
  Listed on June 4, 2010, K-Star closed at 28 sen last Friday, falling 60.9% from its IPO price of 71.7 sen (IPO price adjusted for a one-to-three share split on Nov 1, 2010)
  
  It is trading at a 67.1% discount to its end-September 2011 book value of 177.97 yuan and close to its net cash per share of 25 sen. As at end-September 2011, it had cash reserves of 154.81 million yuan versus current borrowings of 17.68 million yuan, which translated into a net cash position of 137.13 million yuan.
  
  In FY10, it paid a net dividend of 1.6 sen per share, representing a yield of 5.7%. From FY06 to FY10, the company’s CAGR for net profit and revenue was 47.8% and 43.8% respectively. For FY10, it posted a net profit of 88.25 million yuan on revenue of 670.87 million yuan.
  
  For 3QFY11 ended September, it posted a net profit of 11.14 million yuan on revenue of 169.60 million yuan, down from a net profit of 31.16 million yuan on revenue of 191.48 million yuan previously. K-Star said the decline was mainly due to higher raw material and labour costs.
  
  Its sports footwear segment contributed to about 95% of revenue, while its sports apparel and accessories accounted for the remaining 5%.
  
  As part of its expansion plan, K-Star announced in October that it was buying a piece of state-owned leasehold land of 675 sq m in Jinjiang City in Fujian Province for 27 million yuan in cash.
  
  As at end-2010, it had four production lines at three factories in Jinjiang City. Its estimated annual production capacity was 3.97 million pairs and output utilisation rate was 93.7% in 2010.

So K-Star was listed on July 2010.

It's now only Feb 2012 and K-Star has just reported quarterly losses for its 2011 Q4 earnings!

!!!!!!!


past postings on K-Star can be found here: K-Star Sports

China Ouhua Winery Holdings Ltd made its listing debut on Bursa Malaysia on 4th Nov 2010. It was the first winemaker to be listed on Bursa Malaysia.

A month before it was lited, Ouhua was featured on the EdgeMalaysia article:China Ouhua sees China's wine consumption doubling by 2013

• KUALA LUMPUR: China Ouhua Winery Holdings Ltd expects wine consumption in China to double in the next three years. Its executive chairman and chief executive officer Wang Chao says annual wine consumption in the country is currently one million tons, and he expects it to double to at least two million over the next three years....

The huge 'expectations' were pledged to the investing public.

It's now Feb 2012.

Ouhua announced its Q4 earnings.

Well.... Ouhua lost money.

Receivables increased. (115 million vs 62.9 million a year ago)

Cash depleted. (55.469 million vs 160.695 million a year ago)

........ !!

Posted last Friday: Prominent Xtreme Strikes 5.33 Million Jackpot

On today's Star that Prominent Xtreme issue was highlighted: KEuro under close watch after granted highway concession

• Wednesday February 22, 2012
  KEuro under close watch after granted highway concession
  
  PETALING JAYA: Kumpulan Europlus Bhd (KEuro) has become a closely-watched company since the issuance of the letter of approval for the 60-year West Coast Expressway concession to its subsidiary, West Coast Expressway Sdn Bhd (WCESB), last month.
  
  Even its recently-announced plan to acquire additional shares in WCESB from little-known Prominent Xtreme Sdn Bhd has come under scrutiny.
  
  KEuro had on last Friday announced to Bursa Malaysia its intent to acquire a 15.8% stake, or about 4.59 million shares, in WCESB from Prominent Xtreme. The proposed acquisition would cost RM5.34mil, or RM1.16 per share, which KEuro said it would finance by internal funds.
  
  Upon completion of the proposed acquisition, KEuro’s stake in WCESB would increase from the present 64.2% to 80%, while that of Prominent Xtreme would be reduced from 35.8% to 20%.
  
  In the same statement, KEuro had explained that Prominent Xtreme was principally involved in investment holding and property development businesses.
  
  As it turned out, filings with the Companies Commission of Malaysia showed that the nature of Prominent Xtreme’s business was listed as “dormant.” Shares in the privately held company were owned equally by two individuals, namely Liau Yoke Leang and Mohd Ruah Abdul Manan.
  
  A further check revealed that Liau was formerly the senior general manager of Agrocon Sdn Bhd, a smallish property development company, whose director and major shareholder was Chan Keat Wan. (Chan is the sibling of Tan Sri Chan Ah Chye, who is the major shareholder of KEuro.)
  
  Ruah, on the other hand, was a director of a smallish construction company called Ekspedisi Jasa Sdn Bhd. The information was based on records with the Construction Industry Development Board of Malaysia.
  
  Prominent Xtreme had in October 2010 entered a deal to acquire Perak Corp Bhd’s entire equity interest in WCESB, comprising 3.3 million shares, or a 12.19% stake, for RM4mil. Since completion of the deal, Prominent Xtreme and KEuro were the remaining two shareholders of WCESB.
  
  Analysts reckoned that KEuro would undertake further corporate exercises once the concession for the West Coast Expressway, which would be built at an estimated cost of RM7.07bil over a five-year period, is officially signed in the coming days.

On Star Biz:

• Saturday February 18, 2012
  A perplexing settlement
  A QUESTION OF BUSINESS By P. GUNASEGARAM
  
  Danaharta's deal with Tajudin over RM589mil is unsettling given that it had a judgement in hand for the amount
  
  AN out-of- court settlement when you already have a favourable judgment is allowing the bird already in hand to forever fly away. When those whom you ultimately represent have no idea why you gave that bird up in the first place it makes it doubly worse.
  
  Such is the case in the perplexing settlement between prominent Malaysian businessman Tan Sri Tajudin Ramli and Pengurusan Danaharta Nasional Bhd. Danaharta had already obtained judgement from the High Court against Tajudin in 2009 for a huge RM589mil, probably the largest sum awarded in Malaysian legal industry.
  
  The judgement gives interest rate on the RM589 million at 2% over Malayan Banking's base lending rate from Jan 1 2006. Assuming a simple interest rate of 8%, that amount would have now swelled to about RM840mil if the judgment were effected today. What could have made Danaharta lose that kind of money? And did it get anything in return?
  Danaharta is the national debt management agency set up in the wake of the 1998 Asian financial crisis to sort out debt problems in the banking system and recover as much money as possible from borrowers.
  
  It had filed a suit against Tajudin, a high-flying and favoured businessman, part of a group close to former Finance Minister Tun Daim Zainuddin, who at one time controlled Malaysia Airlines (MAS) and before that mobile telephone operator Celcom through his vehicle Technology Resources Industries Bhd (TRI).
  
  Tajudin got into serious debt and lost control of TRI and eventually sold his 32% stake in MAS back to the Government in 2001 at the same price he bought it several years back and much higher than the then market price, drawing heavy criticism. He had taken a loan of RM1.79bil to buy the stake in 1994.
  
  Earlier this week, when the case came up for hearing before the Court of Appeal, it was disclosed that an out-of-court settlement was reached and basically that was that. The terms of the settlement were not made public, despite the case being of great public interest and the fact that Danaharta is publicly funded and has at least a moral duty to explain why it went for a settlement.
  
  Predictably, the way this case has been disposed off has started tongues wagging and the rumour mill churning with much velocity. With important questions unanswered, serious questions over governance and accountability have risen to the fore and can only be detrimental for the country and its financial and capital markets.
  
  As one lawyer pointed out, with the High Court judgement, Danaharta was no longer a plaintiff but a judgement debtor while Tajudin was a judgement creditor. At least it would have been prudent on Danaharta's part to wait until the Court of Appeal had decided on Tajudin's appeal.
  
  In 2009, the Kuala Lumpur High Court ordered Tajudin to pay RM589mil to Danaharta following debts incurred when purchasing MAS shares. The amount was the balance from the RM1.79bil loan taken to purchase MAS.
  
  The High Court ordered him to pay Danaharta at Dec 31 2005 the principal sum of RM589mil owed plus interest at 2% above Malayan Banking's base lending rate from Jan 1 2006, until the loan was paid.
  
  Tajudin made counter-claims amounting to some RM13.5bil. These claims are far in excess of the RM589mil in dispute, by over some 20 times. It was filed against 24 respondents, including former Danaharta chief executive Datuk Azman Yahya and former Danaharta officers Datuk Abdul Hamidy Hafiz, Datuk Zukri Samat and Datuk Kris Azman Abdullah.
  
  He had claimed that Tun Mahathir Mohamad, who was Prime Minister then, had ordered him to buy the 32% stake in MAS to bail out Bank Negara Malaysia which had incurred foreign exchange losses. Mahathir denies this.
  
  That's the intriguing tale about this whole issue. It offers a lesson on how corporate Malaysia is run with its close interlinks between big business, Government and politics. It was a refreshing decision to see Danaharta turn around and pursue to the end creditors who have the means to repay their debts.
  
  But this settlement has negated all that and turned the hands of the clock back in terms of progressing to a more transparent and accountable environment with the proper standards of governance in place.
  
  If there is indeed a convincing explanation for this, than it is incumbent upon all parties, and especially Danaharta, which spent money and effort to bring the miscreants to book and got a judgment in its favour, to make this public so that the rest of us understand.
  
  Otherwise, we need to add this to yet another one of those things we must get to the bottom of and do something about.
  
  P Gunasegaram notes that the final amount involved amounts to more than three times that of the RM250mil loan involved in the cowgate (National Feedlot Corp) scandal. (t.p.guna@gmail.com)

On the Edgemalaysia.com

• KEuro to buy 15.8% of West Coast Expressway, up stake to 80%
  Written by Joseph Chin of theedgemalaysia.com
  Friday, 17 February 2012 18:57
  
  KUALA LUMPUR (Feb 17): KUMPULAN EUROPLUS BHD [] has proposed to raise its stake in West Coast Expressway Sdn Bhd (WCESB) to 80% a move to strengthen its control of WCESB after it secured the RM7.07 billion west coast highway concession.
  
  KEuro said on Friday it was buying a 15% stake or 4.59 million shares of WCESB from Prominent Xtreme Sdn Bhd for RM5.33 million.
  
  KEuro said together with the current 18.649 million shares or 64.20%, the acquisition would see it holding 80% equity interest.
  
  “Upon commencement of the CONSTRUCTION [] of the West Coast Expressway, WCESB is expected to contribute positively to the earnings as well as the shareholders’ value of the KEuro group,” it said.
  
  To recap, on Jan 26, 2012, WCESB received an approval letter from the Public Private Partnership Unit of the Prime Minister’s Department to undertake the proposed privatisation of the construction of the West Coast Expressway.
  
  This would be based on build-operate-transfer (BOT) with a concession period of 60 years, at an estimated project cost of RM7.07 billion.
  
  WCESB’s existing directors are Tan Sri Chan Ah Chye @ Chan Chong Yoon, Datuk Abdul Hamid Mustapha, Datuk David Frederick Wilson, Loy Boon Chen and Datuk Neoh Soon Hiong.
  
  The company has been loss making over the past five years. It posted net losses of RM21,594 in the financial year ended Jan 31, 2011,

That one statement highlighted....

• KEuro said on Friday it was buying a 15% stake or 4.59 million shares of WCESB from Prominent Xtreme Sdn Bhd for RM5.33 million.

My oh my!

A rm 5.33 million payout for Prominent Xtreme Sdn Bhd stake in WCESB????

WOW!

You might be interested in past postings...

• One More Question For Europlus
• That 7 Billion Highway Project!!!