Given SKC’s and Mclovin’s hesitations I spent a little more time digging but really have no more clarity.
Be interesting to know if CanOz or somebody else has ever seen firsthand the brand/shops in China.
The cash flows for dividend seems a bit weird although it seems to net off O.K against the prior related party advance to Mr XU – so would explain no cash flow.
The jump in trade receivables for 2012 is interesting, but I really can’t draw any conclusions if they are actually related party advances not declared. At some level you have to accept the auditor has reconciled the bank account and checked for related party transactions. Its total negligence if they haven’t.
It would appear from the dividend flow that XU was the sole owner prior to 31/12/12.
Selling 45% privately to pre-float investor’s is not unusual. (the future float was probably a pre-requisite of them buying in). The price they paid would be an interesting question as is whether they are controlled by XU and why they want to ditch so aggressively. The 20cent IPO level is entirely manufactured with what appears to be an insider getting it across the line. Perhaps these pre-float investors aren’t taking too much of a bath even at these levels – depends what price they paid. On the other hand if the 11 companies are controlled by XU – then he’s the whole game and desperate to fleece a few bucks on the secondary market before an elaborate sham is up and all hell breaks loose. (Possible but not sure it’s probable)
Whatever the story, I have not achieved enough transparency, for anything more than a little flutter on this one, long if you think Mr Xu is legit or short if you don’t.
The more the pre float investors sell the more the free float increases the more the real story will come to the surface as more people dig into what this company really represents. If it’s all as it’s portrayed – its a cheap exposure to rising Chinese domestic consumption. Wherever there is apparent cheapness there is always uncertainty and where there is uncertainty there is the potential for fraud.
Just remembered [again] why my bread and butter are quality stocks.
DYOR - I had taken a position within a few minutes of looking at the company for the first time on the superficial cheapness - the sizing means a total loss of that position is utterly insignificant to me - so pleas nobody place any weight on my actions. (this is akin to a flutter at the casino for me - and as such I have spent too much time on it now)
Be interesting to know if CanOz or somebody else has ever seen firsthand the brand/shops in China.
The cash flows for dividend seems a bit weird although it seems to net off O.K against the prior related party advance to Mr XU – so would explain no cash flow.
The jump in trade receivables for 2012 is interesting, but I really can’t draw any conclusions if they are actually related party advances not declared. At some level you have to accept the auditor has reconciled the bank account and checked for related party transactions. Its total negligence if they haven’t.
It would appear from the dividend flow that XU was the sole owner prior to 31/12/12.
Selling 45% privately to pre-float investor’s is not unusual. (the future float was probably a pre-requisite of them buying in). The price they paid would be an interesting question as is whether they are controlled by XU and why they want to ditch so aggressively. The 20cent IPO level is entirely manufactured with what appears to be an insider getting it across the line. Perhaps these pre-float investors aren’t taking too much of a bath even at these levels – depends what price they paid. On the other hand if the 11 companies are controlled by XU – then he’s the whole game and desperate to fleece a few bucks on the secondary market before an elaborate sham is up and all hell breaks loose. (Possible but not sure it’s probable)
Whatever the story, I have not achieved enough transparency, for anything more than a little flutter on this one, long if you think Mr Xu is legit or short if you don’t.
The more the pre float investors sell the more the free float increases the more the real story will come to the surface as more people dig into what this company really represents. If it’s all as it’s portrayed – its a cheap exposure to rising Chinese domestic consumption. Wherever there is apparent cheapness there is always uncertainty and where there is uncertainty there is the potential for fraud.
Just remembered [again] why my bread and butter are quality stocks.
DYOR - I had taken a position within a few minutes of looking at the company for the first time on the superficial cheapness - the sizing means a total loss of that position is utterly insignificant to me - so pleas nobody place any weight on my actions. (this is akin to a flutter at the casino for me - and as such I have spent too much time on it now)
