Category Archives: Investment

Wai Gor comments on Hong Kong Share Market, especially the second and third strand stocks.

Exploring the MIDEA REAL E (03990)

Midea’s home purchase, which has just been listed for half a year, surrendered its first performance after listing last month and achieved good results.

Let me talk about the basic situation:

Midea Real Estate was listed in October 2018, with an offer price of 17 yuan. After the listing, the total number of shares issued was 1.109 billion shares. The major shareholder He Jianfeng held 1 billion shares, equivalent to 84% of the shares, and another cornerstone investor Youngor (600177. SH) holds 60.35 million shares or 5.07% of shares and Foshan Yesheng Investment holds 13.71 million or 1.15% of the shares. The cornerstone investors have a six-year lock-up period, and there is no lock-up limit. If the cornerstone investors do not reduce their holdings, then the market circulation is only 9.8%, and the market circulation is only about 2.56 billion yuan.
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Performance Review (5)

Xingfa Aluminum (00098)

Xingfa’s performance and dividends are as expected, and they are satisfied. The only dissatisfaction is the stock price performance.

Revenue increased by 37% to nearly RMB 10 billion, and gross profit increased by 33% to RMB 1.35 billion. The overall gross profit margin decreased slightly by 0.4% to 13.6%, mainly due to the 2% decrease in gross profit margin of construction aluminum profiles. By maintaining existing customers and attracting new customers, the processing costs were reduced, and the revenue of this business segment increased by 32%, and the price reduction achieved the expected results.
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Globe Brand (787.HK) — Why is Feng’s reincarnation and potential behind?

Feng’s frankly stated that the number of shares he accepted for scrip dividends would not increase his holdings by more than 1.99% of the “enlarged share capital”, thus avoiding the potential mandatory offer obligations, and therefore the minority shareholders if they choose to scrip dividends. There will be no offer to protect the reserve price. To make such a major change, it is estimated that the key reason is that the CSRC asked Feng to make a clear disclosure on the stock dividend interest intention on March 14. It is not ambiguous. It will not be announced until March 28 after the stock scrip dividend plan is closed. Therefore, if Feng said on March 14 that he would break the dividends in full, it is believed that most of the minority shareholders feel that they will follow the stock exchange scrips because of the potential offer relationship. The end result is a large number of new shares. The net asset value per share was significantly diluted, but Feng could not achieve the goal of increasing the shareholding of the shares. It would be better to announce that it would not increase its holdings by more than 1.99% of the enlarged shareholders, so that the minority shareholders would not follow suit.
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