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AJJ - Asian American Medical Group

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VSntchr

VSntchr

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Asian Centre for Liver Diseases and Transplantation Limited (AJJ, formerly Costarella Design Ltd) is a Singapore-based private one-stop centre for treatment of liver disease. ACLDT consists of outpatient facilities as well as in-patient liver unit with its own Liver Intensive Care Unit (LICU). The company also offers other services including general medical screening, medical oncology & chemotherapy, gastroenterology, and respiratory medicine.



Very interesting little company here. When viewing results use their annual reports as the results listed under the financial section in commsec uses the results of the company they took over (in order to list on the ASX) which was basically a bankrupt business.

I reviewed as far back as 2005 and the company has been making a profit every year with good cash flow also.

Basically the growth prospects for this company are massive. They pioneered living liver transplantation (massive improvement as donors dont lose their organ!). The company has also set up satellite clinics which can remotely diagnose patients.

Latest HY report shows reduced profit - which is due to increased staff expenses and acquisitions in relation to new clinics being opened in Indonesia and Vietnam. Despite the reduced profit, cashflow remained strong.

With the increase in population, coupled with the tendency for the Asian lifestyle to emulate the Western world - one can only see the number of liver problems amongst this section of the world increasing...

SP has come off very strongly lately due to horrible liquidity in the stock (if someone wants to get out quick...the stock is going to get smashed, while the reverse holds true also). Management seems driven to increase investor awareness and has flagged plans for investor roadshows.

It seems management has a long term view rather than a short term view and I think this is something that alot of value investors will appreciate.


Looking forward to bouncing ideas and gaining others insights into this small, but very interesting company.
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation Limited

Is there a shareholder discount for their services? I fear I may be needing them soon.
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation Limited

poverty said:
Is there a shareholder discount for their services? I fear I may be needing them soon.
Click to expand...

Haha, you never know...maybe give management a call? can you speak Singaporean?

Price trending down again today - looking to enter very soon..I have been spending more time reviewing this one and my confidence is growing stronger :)
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation Limited

VSntchr said:
Haha, you never know...maybe give management a call? can you speak Singaporean?

Price trending down again today - looking to enter very soon..I have been spending more time reviewing this one and my confidence is growing stronger :)
Click to expand...

Who owns it? Are there Australian directors? There is a lot of corruption in Singapore and I would be very careful. I am very happy they didn't get hold of the ASX.
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation Limited

Knobby22 said:
Who owns it? Are there Australian directors? There is a lot of corruption in Singapore and I would be very careful. I am very happy they didn't get hold of the ASX.
Click to expand...

The majority owner is the pioneering doctor.
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

Looks like it may have potential for a long position, the recent expansions is a good sign.
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

Hi Valuesnatcher,

I've had my eye on this stock as well, I just can't pass up the high ROE, competitive advantages and expansion potential that it offers.

There is however, one issue that has me puzzled. Why did the owners choose to incorporate the business in Australia and list on the ASX when they have no business here at all?
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

Dealmein said:
Hi Valuesnatcher,

I've had my eye on this stock as well, I just can't pass up the high ROE, competitive advantages and expansion potential that it offers.

There is however, one issue that has me puzzled. Why did the owners choose to incorporate the business in Australia and list on the ASX when they have no business here at all?
Click to expand...

I think the major reason was to have access to a much larger exchange and thus a larger base of potential funding. Management often refers to increasing investor awareness so I think this was a major factor...
The asx is much larger than singapore's stock exchange...

Also they identified a cheap way to list (thru the reverse take-over operation). The company being quite small its good to see that they are frugal when needed haha!
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

Hi everyone,

I have just started conducting some research on AJJ.

A huge percentage of the company is held by the directors, however I do note that in the research reports listed on their website that they will attempt to grow the business by luring more doctors/specialists to the company by offering them shares.

So there could be some dilution over time.
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

VSntchr said:
Also they identified a cheap way to list (thru the reverse take-over operation). The company being quite small its good to see that they are frugal when needed haha!
Click to expand...

I would be extremely wary of RTO companies done by companies in Asia. In the US at the moment there are numerous cases of fraud by Chinese companies that have RTO US companies. Singapore is known for having not the cleanest of markets. There are entire blogs devoted to shorting such frauds. Check out Bronte Capital or Muddy Waters or Citron Research. For a company the size of AJJ the argument that they wanted access to a larger capital market doesn't really hold water. I'm not saying they are fraudulent, just make sure you do a hell of a lot of DD on them. Personally I wouldn't touch them.

http://brontecapital.blogspot.com/

http://www.citronresearch.com/

http://www.muddywatersresearch.com/
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

So my understanding of a reverse takeover fraud, is:

* Foreign company (usually Chinese) takes over an already listed company to avoid the requirements of an IPO and the associated scrutiny;

* The newly listed company then makes false claims on its performance, in order to beef up the share price. Taking advantage of the fact that they do not operate in the listed country, making it harder for investors to do their homework.

* Typically the business is front, rather than a real business; In the mean time the owners take the money, sell and run.

Interesting but I'm not convinced thats' the case here. Dr Kai, the founder and chairman appears to me to be a well respected surgeon, with decades of experience, likewise the practice, hospital and patients seem real. Where's the fraud? It would not make sense for someone with his career and background to turn thief.

Also, pardon my ignorance, but are reverse takeovers common in OZ? Have there been instances of fraud involving reverse takeovers here?
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

Dealmein said:
So my understanding of a reverse takeover fraud, is:

* Foreign company (usually Chinese) takes over an already listed company to avoid the requirements of an IPO and the associated scrutiny;

* The newly listed company then makes false claims on its performance, in order to beef up the share price. Taking advantage of the fact that they do not operate in the listed country, making it harder for investors to do their homework.

* Typically the business is front, rather than a real business; In the mean time the owners take the money, sell and run.

Interesting but I'm not convinced thats' the case here. Dr Kai, the founder and chairman appears to me to be a well respected surgeon, with decades of experience, likewise the practice, hospital and patients seem real. Where's the fraud? It would not make sense for someone with his career and background to turn thief.

Also, pardon my ignorance, but are reverse takeovers common in OZ? Have there been instances of fraud involving reverse takeovers here?
Click to expand...

I haven't really done much research on AJJ. The one thing that puzzled me was why such a small company with no links to Australia wanted to list on the ASX. Just to reiterate, I am not saying they are fraudulent nor do I have any evidence of it. It just seemed odd, IMHO.
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

robusta said:
Interesting that AJJ has sold the controlling interest in the Vietnam clinic to their partner.

http://www.asx.com.au/asxpdf/20111012/pdf/421ptn4ml99xv0.pdf

In the process the existing shareholders are slightly diluted. I thought the cash flow was OK for AJJ :confused:

The announcement could be taken at face value or....??? Who knows?
Click to expand...

Pretty long statement, the whole structure of this company is pretty confusing...hmmm
 
Re: AJJ - Asian Centre for Liver Diseases and Transplantation

robusta said:
Interesting that AJJ has sold the controlling interest in the Vietnam clinic to their partner.

http://www.asx.com.au/asxpdf/20111012/pdf/421ptn4ml99xv0.pdf

In the process the existing shareholders are slightly diluted. I thought the cash flow was OK for AJJ :confused:

The announcement could be taken at face value or....??? Who knows?
Click to expand...

What would be interesting to know is how the terms of the JV change under the new shareholding. According to AJJ doctors were being flown from Singapore to Ho Chi-Minh to treat patients, there is no mention of how much the JV is charged for this privlege (or even if it is). I don't understand why they were calling something key to their growth strategy one year ago and now are diluting themselves.

They'd really benefit from a 100:1 consolidation. All those billions of shares in a <$20m company is confusing.
 

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