Post by oldman on Jul 30, 2014 14:08:31 GMT 7
Took a quick look given that these shares are now testing their historical lows. After a quick analysis, I feel that there is insufficient margin of safety and I decided to stay away.
Also, likely that in the 4th quarter, it may announce significant writedowns given that it has goodwill amounting to $64.5 mil as well as project receivables of $8.2 mil and other receivables of $25 mil. As at April 2014, cash is stated at $4.7 mil and borrowings at $6.6 mil. I think at this price, the market may be questioning whether the latest proposed placement at 2.1cts will go through.
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At 1.4cts, with around 2.45 bil shares, market cap is $34.3 mil.
25th July 2014 - KK Fong sold 10.75 mil shares at 1.7cts.
23rd July 2014 - Proposed placement of 480 mil shares at 2.1cts will raise $9.48 mil and announcement of creditors' claims (as detailed below).
Oct 2013 - 2 for 5 rights issue at 2cts raised $12.8 mil
-----------
15th June 2014 - 3rd quarter report
A commentary at the date of the announcement of the significant trends and competitive
conditions of the industry in which the group operates and any known factors or events that
may affect the group in the next reporting period and the next 12 months
The printing industry is undergoing major structural changes and the business environment in which the
Group operates is becoming increasingly challenging. The impact of these challenges can be seen in
the growing number of small, medium and big printers closing down while the operating environment for
existing printers has become very challenging due to a sharp slowdown in business, especially in recent
months. This has resulted in excess capacity thus leading to aggressive price wars and fierce
competition among printers. These developments are taking place in an environment where the space
of traditional print media is increasingly encroached upon by non-print media amidst changing consumer
trends in favour of non-print media. As a result, the Group has experienced downward pressure on
business volume.
Moreover, the availability and cost of credit, especially in China, continues to remain tight and may
tighten even further. Coupled with the prevailing economic conditions and operating environment, this
has adversely affected and may continue to adversely affect the ability of customers to meet their
financial obligations.
In light of the foregoing, the Group expects to continue facing difficult and challenging business and
operating conditions.
Nevertheless, the Board notes that the Group has certain advantages such as speed, reliable service
and an extensive network over its competitors, most notably its smaller competitors in China.
As the attrition and consolidation in the industry continue amidst such challenging operating conditions,
the Group has to operate more productively and offer more value-added services to its customers. In
order to meet the challenges facing it, the Group will continue to review and streamline its operations,
improve its capabilities and, if necessary, restructure its assets and operations.
The Board of Directors, having considered the above circumstances, decided to critically review the
existing debtors’ list again, with particular reference to the collectability of the debts, as well as to review
the goodwill in the books, with the view to rationalise matters.
Also, likely that in the 4th quarter, it may announce significant writedowns given that it has goodwill amounting to $64.5 mil as well as project receivables of $8.2 mil and other receivables of $25 mil. As at April 2014, cash is stated at $4.7 mil and borrowings at $6.6 mil. I think at this price, the market may be questioning whether the latest proposed placement at 2.1cts will go through.
--------------
At 1.4cts, with around 2.45 bil shares, market cap is $34.3 mil.
25th July 2014 - KK Fong sold 10.75 mil shares at 1.7cts.
23rd July 2014 - Proposed placement of 480 mil shares at 2.1cts will raise $9.48 mil and announcement of creditors' claims (as detailed below).
Oct 2013 - 2 for 5 rights issue at 2cts raised $12.8 mil
-----------
15th June 2014 - 3rd quarter report
A commentary at the date of the announcement of the significant trends and competitive
conditions of the industry in which the group operates and any known factors or events that
may affect the group in the next reporting period and the next 12 months
The printing industry is undergoing major structural changes and the business environment in which the
Group operates is becoming increasingly challenging. The impact of these challenges can be seen in
the growing number of small, medium and big printers closing down while the operating environment for
existing printers has become very challenging due to a sharp slowdown in business, especially in recent
months. This has resulted in excess capacity thus leading to aggressive price wars and fierce
competition among printers. These developments are taking place in an environment where the space
of traditional print media is increasingly encroached upon by non-print media amidst changing consumer
trends in favour of non-print media. As a result, the Group has experienced downward pressure on
business volume.
Moreover, the availability and cost of credit, especially in China, continues to remain tight and may
tighten even further. Coupled with the prevailing economic conditions and operating environment, this
has adversely affected and may continue to adversely affect the ability of customers to meet their
financial obligations.
In light of the foregoing, the Group expects to continue facing difficult and challenging business and
operating conditions.
Nevertheless, the Board notes that the Group has certain advantages such as speed, reliable service
and an extensive network over its competitors, most notably its smaller competitors in China.
As the attrition and consolidation in the industry continue amidst such challenging operating conditions,
the Group has to operate more productively and offer more value-added services to its customers. In
order to meet the challenges facing it, the Group will continue to review and streamline its operations,
improve its capabilities and, if necessary, restructure its assets and operations.
The Board of Directors, having considered the above circumstances, decided to critically review the
existing debtors’ list again, with particular reference to the collectability of the debts, as well as to review
the goodwill in the books, with the view to rationalise matters.