Monthly Archives: October 2018

I am not afraid of this “big bear”

The big bear market in 2008, or the stock market disaster, I am very scared for four reasons:

1. There were a lot of short positions in the portfolio at the time, especially SP. When the HSI fell sharply, the pressure on the deposit was very large and large, which would affect my judgment and operation of the stock market. So after the hardships in 2008, I drastically reduced the operation of derivatives. Now It’s just accidental, so now I don’t have to worry about it every day. I know that I may fall down the market today, or I can sleep until I open the market and wake up naturally;

2. Cash was exhausted prematurely. After the Hang Seng Index fell below 20,000 points that year, it has already felt that the market panic has been spreading and intensifying. Therefore, it feels that it is a good opportunity to buy goods. The more you buy, the more urgent it is, the less than 15,000 points, it has almost exhausted cash. I have already reached the final stage of the most panic. I have no cash to buy goods. I can only change my horse to a more valuable and undervalued stock. I missed many opportunities. Because there is no cash relationship, it is a step by step, very afraid, really as the experts at the time said that 10,000 points is not the bottom, but 6,7 thousand points is;
Continue reading

Underestimation of Luen Thai Holdings (00311) (2)

As mentioned above, the two transactions of Luen Thai Holdings last month were:

1. Selling a joint venture with a 50% stake at a price of $4.3 million. The joint venture is principally engaged in the spinning business in Vietnam. The loss after taxation in 2017 was US$ 7.58 million, which means that Luen Thai will have to bear a loss of US$ 3.79 million for this joint venture in 2017.

Upon completion of the transaction, Luen Thai’s loss from the joint venture company will be significantly reduced, and a one-off gain of approximately US$1.5 million will be recorded.
Continue reading

Underestimation of Luen Thai Holdings (00311) (1)

Luen Thai Holdings (311.HK) is a long-established manufacturer of ready-to-wear and apparel accessories in Hong Kong. It was founded in 1983 by former major shareholder Mr. Chen Shouren. It was listed in Hong Kong in 2004 and finally sold to Shanghai at a price of 1.8 yuan per share in 2016. Textile Group.

After the completion of the sale, due to the public shareholding of less than 25% and has been suspended until January of this year, only through the Shanghai Textile Placing reduction of 40 million shares and the original major shareholder Mr. Chen Shouren held 16.82% of the shares scattered to the friendly holding, thus Resumption of trading after reaching a public shareholding of more than 25%.

Of course, the nominal public shareholding is as high as 26.65%, but in fact the public shareholding may not be higher than 10%, only because the original shareholder Chen Sheng’s shareholding is only scattered to friendly holdings and has not been sold in the market; Shanghai Textile has reduced its holding of 40 million shares at 1.08 yuan per share. Only less than 20 million shares are circulating in the market. About 22 million shares are still held by a single large household.

The company’s first full-year results after the completion of the sale (ie 2017) are really good and high interest rates are distributed.

The 2017 annual results of earnings per share of 0.165 Hong Kong dollars, the annual dividend of about 0.1 yuan, dividend payout ratio of up to 60%.

In the first half of 2018, the results were not bad, but the dividend payout ratio fell to 30%. I wonder if it is necessary to retain funds for the acquisition?

The company subsequently announced a sale and an acquisition transaction last month, and the two transactions I think are all good, let’s talk about it later.

In addition, it will also briefly talk about the company’s concerns.

Do not look at the valuation

At extreme times, the market often does not look at valuations.

The big bull market and the big bear are not looking at the valuation, and the stock price follows the market sentiment. Therefore, when the big bull market is in the market, investors are most afraid of underperforming the market, losing their jobs, and losing their homes. Everyone is desperate to grab the goods; in the big bear market, cash For the king, the stock price and valuation are good, and it is still asking for money.
Continue reading

4-5 times PE of small-cap stocks have not seen at the end?

In recent months, Hong Kong stocks have fallen overnight, especially for small and medium-sized stocks with poor liquidity. They have fallen the most, and many small-cap stocks with a price-to-earnings ratio as low as four or five times have begun to appear in the market. Low, I feel that the valuation, the stock price has not bottomed out, it seems that the low is not low.

Continue reading

Fully support for PAG offer to acquire Spring REIT 01426 (3)

Chunquan Trust was listed in 2013 and has been in existence for about 5 years. It was very quiet in the early days. Only two large acquisitions were made in 2017 and this year, including the completion of the acquisition of British commercial properties in July 2017 and the announcement last month. The acquisition of Huizhou Property is not unique, and the two large acquisitions are related to the management.

Let me talk about the background information. The manager of Chunquan Trust is Chunquan Asset Management Co., Ltd. (Manager), whose shareholders are 90.2% of Mercuria Investment Co. (formerly known as AD Capital) and 9.8% of Huamao Property Holdings Ltd. The 9.8% stake in Huamao was transferred to Mercuria. At the same time, the majority shareholder of Chunquan Trust is RCA FUND, holding 27.2% of Chunquan, and Mercuria is also the administrator of RAC FUND, which means that Mercuria is the majority shareholder of Chunquan Manager and also the majority shareholder of Chunquan. The manager, that is, any decision made by the manager, will basically be supported by the major shareholder.
Continue reading