PEZ - Premiere Eastern Energy

[System]

Premiere Eastern Energy Limited (PEZ) is a leading integrated supply chain manager of petrochemical products in the PRC based in the Guangdong Province, PRC. As an integrated supply chain manager, it engages in the wholesale distribution of petrochemical products including sourcing, storage, shipping, sales and marketing and after-sales services of petrochemical products in the PRC.

http://www.group-premiere.com

 

[skc]

Most undervalued company on the ASX?

Half year NPAT = $13.64m. Balance sheet with $166.8m cash against $8.7m in borrowing. Market cap $55m on last traded price of 6c. NTA 22.13c.

P.S. It's a Chinese company that no body trusts, doesn't pay dividend and has zero liquidity.

P.S. Probably as undervalued as the likes of SBB and RIS.

 

[skc]

Most undervalued company on the ASX?

Half year NPAT = $13.64m. Balance sheet with $166.8m cash against $8.7m in borrowing. Market cap $55m on last traded price of 6c. NTA 22.13c.

P.S. It's a Chinese company that no body trusts, doesn't pay dividend and has zero liquidity.

P.S. Probably as undervalued as the likes of SBB and RIS.

These guys are still around...

Now trading <4c, with market cap of $36m, cash in hand of $158m...

And there are a few other companies that you can lump in to the Chinese stock basket... DFM, XPD.

Keeping an eye on DXF... a $370m market cap company that listed back in March. Still holding around the listing price (60c) but very thin volume (less than $1m traded since listing). Based on records of other similar listings, I'd say target price = 10c in 18 months or so...

 

[herzy]

These guys are still around...

Now trading <4c, with market cap of $36m, cash in hand of $158m...

And there are a few other companies that you can lump in to the Chinese stock basket... DFM, XPD.

Keeping an eye on DXF... a $370m market cap company that listed back in March. Still holding around the listing price (60c) but very thin volume (less than $1m traded since listing). Based on records of other similar listings, I'd say target price = 10c in 18 months or so...

What do you think the story is? Just a money-laundering front?

 

[skc]

What do you think the story is? Just a money-laundering front?

No idea... but there are a few things they have in common.

- They only sold a small portion of the company on the IPO.
- The purpose of the IPO is literally all about getting listed. Unlike most normal IPOs which involves the original owners selling. Most of them didn't need the new capital.
- Any trading on the ASX is rather meaningless, because much of the shares are controlled by the owner.
- Because they operates in China, there's little broker research and coverage... so there's little insto buying.
- In most cases, they don't pay dividend. The money never really leave the company to the shareholders. So the only hope of a return by retail holders is capital gains.
- But capital gains is hard to come by when there's no demand for the stock.
- Any small retail holders that got into the IPO might simply give up over time... selling the share price further down.

So they could all be perfectly legitimate businesses... but they care little about shareholder return. The owner is the majority holder and usually the CEO/MD, as opposed to your average ASX company where management are "hired" by the company to run the business. So in a sense, the company's assets are as good as his personal assets. There's little incentive to pay this money out and the market value doesn't concern the owner (there's no short term share price performance incentive). So there's little urge to support the share price.

Or they could all just be frauds... or being treated as such.

The real question is... why would ASX allow them to list, if it had enough reasons to knock back someone like Guvera?

 

[galumay]

No idea... but there are a few things they have in common.

skc, it might be a question with an obvious answer, but why do these Chinese companies want to be listed on the ASX? Is it a prestige thing, or is there some real business imperative?

 

[skc]

skc, it might be a question with an obvious answer, but why do these Chinese companies want to be listed on the ASX? Is it a prestige thing, or is there some real business imperative?

Here is my guess...

The prestige thing is often touted but my guess is that it has little real business benefits. It may sound slightly impressive to a layperson that your business lists on a foreign exchange (we have no idea what reputation ASX has in China anyway), but in business dealings chances they need a little bit more due diligence than that.

What ASX listing can definitely provide are valuation and exit mechanism. May be they could better borrow against their company assets and shareholdings when they are "validated" by the ASX. Remember some of these deals may not reside with the listed company itself.. many Chinese capitalists would have a few ventures on the go.

ASX listing also offer the an exit. Some of these stocks were sold down as soon as the initial shares came out of escrow.... TUP and SBB were examples. May be private business transactions in China are difficult/rare/have low valuations relative to beaten down PE's on the ASX? I don't know but the ability to exit is certainly real.

 

[galumay]

Here is my guess...

... I don't know but the ability to exit is certainly real.

All good points skc, - which leads me to wonder if there isnt a further important expansion on that reason - ability to exit in a foreign currency. i.e conversion of 'wealth' into AUD. There could be shadowy reasons, eg money laundering, and legitimate reasons - desire to reduce sovereign risk by moving capital to AUD.

 

[System]

On March 19th, 2018, Premiere Eastern Energy Limited (PEZ) was removed from the ASX's official list in accordance with Listing Rule 17.12, after the ASX formed the view that the Company does not have a structure and operations appropriate for a listed entity pursuant to Listing Rule 12.5.