Tuesday, September 29, 2009

Holding Review on September 2009

Only 1 change, that is my addition of ASA Group recently at $0.055. The reason is mostly speculative as I bought it because of some insider trading and the long-term loan provided by the major shareholder. The company is also in the SGX Watchlist so SGX will probably help me query them more often. Its price is very low so it is very sensitive to any price change. A change of $0.005 will already result in a 9% change in value, so be extra careful and do your own homework.

I had been trying to get China Precision at 0.27 but could not. I tried different lots size, placing order at 5:15pm to hopefully end up at the start of the queue the next day but nothing seems to work.

Investment SecuritiesPurchase DateAnnualised ReturnSharesBuy Price
STI ETF*15-Jan-2008-13.70%1,9833.47
STI ETF*17-Oct-200826.40%5022.08
STI ETF*25-Aug-20094.20%3,6042.65
ASA Group28-Sep-20092720.26%33,0000.055
STI ETF*28-Sep-2009-548.09%6802.67

* indicate benchmark for performance tracking. Note the STI ETF does not include dividends, so performance of the ETF is underrated by around 4 to 5% per year.

Sihuan: Still no open market purchase by China Pharma. China Pharma stock has risen quite a bit, and there don't seem to be any bad news. So continue to try selling at $0.975, the offer price. I am still not sure if it is worthwhile to accept the offer instead of selling on the open market.

Cacola: I decide against studying in detailed about Cacola. I read about Buffett saying, if you need a computer or calculator for analyzing the company, it is too complex for you. Sadly, there has been no news release about the 21st August court result against IW Asset. Probably, it was postponed but no idea. For people interested in searching more, try 东莞家居乐 which is the chinese name of Cacola.

Powerplus: I should probably sell it if I find better opportunity and not get too emotional with it. The buying of China Steel Australia, a company a previous non-executive chairman had directorship in, did not have a positive impact to the company income statement this year. The company also converted the plant from a nickel pig iron to merchant pig iron, resulting in huge capital expenditure. I have no clue about steel industry and I did not buy Powerplus to study about steel sector. However, people interested should look at the China Steel Australia website for more details. The acquisiton of the TOPSO trademark does not seem of value with little mention of it after the acquisition.

Overall: Time has become very tight for me so I cannot really spend much time on studying fundamental of companies, including those I hold. I am seriously considering buying the STI ETF and forget about the stock market for a while till I am more free. I need more capital to make any attempt beating the benchmark more worthwhile.

Monday, September 28, 2009

Buying on sentiment

Sometimes, I feel I should speculate on sentiments. The market seems so predicable when good news occurs.

For example, some good news that had occured in the last month
a) Midas possible double listing in Hong Kong
b) DMX Tech invested by KDDI Corporation, 2nd largest telecom in Japan
c) Ntegrator wins contracts the Next Generation Nationwide Broadband Network in Singapore
d) Sinotel invested by HC International, an hedge fund
e) Noble invested by China Investment Corporation, a China sovereign wealth fund

There are probably more good news too but just listing some examples. As long as you are not too greedy and don't misunderstand the news, typically you can make some quick cash. However, there are some issues with this.


However, I don't wish to do that because
a) Require lots of time and quick thinking, practically day-trading. I don't like that concept of day-trading although I could probably write some programs to save some time. But still, I am still very anti day-trading currently.
b) I just hate heavily researched and actively traded stock. I just feel those stocks will be already well-researched with lots of others smarter people with commercial tools that can do better than me. Perhaps, I just like to support underdogs.
c) a misinterpretation of the news might lead to quick losses too.

I know both a) and b) are very personal and not really valid. However, people should invest what they feel comfortable about and for me, I still like fundamental, undervalued business.

Wednesday, September 23, 2009

Almost wrongly bought China Animal Healthcare (EP4)

Company Info:

China Animal Healthcare Ltd. is an investment holding company. The Company is principally engaged in the manufacture, sale and distribution of animal drugs for poultry and livestock and its business activities are conducted in People’s Republic of China. In addition, the Company is engaged in the manufacture and sale of animal drugs in injection form for livestock. As of December 31, 2008, the Company manufactures approximately 400 types of treatment and non-treatment drugs for poultry and livestock. It has three business segments: Powdered form drugs, Injection form drugs and Biological drugs.

I was interested in pharma sector since typically people don't care about money when it comes to health, or they are insured by the insurance or government. I also saw China Animal Healthcare with its expansion plan and thought of buying it although it treat livestock, not human.

Not saying it is a bad company, but I almost mistaken it as very cheap when I looked at Reuters. If you want, try looking at the Reuters financial statement on China Animal Healthcare and spot the error.

Its growth was slowing but it does have lots of cash for acquisition. The website was also hacked, but still okay when I checked Google Cache of 21st September 2009.

And the answer to the mistake...
Reuters show the statement as Ringgit but it is supposed to be Renminbi. The difference is 1 Malaysian ringgit = 1.97083257 Chinese yuan. It implies I overestimated the numbers by 97%.


  1. NextInsight - CHINA ANIMAL HEALTHCARE: Vaccine sales to jump next year
  2. China Animal Healthcare Website

Monday, September 21, 2009

Buffett Quote: Never Lose Money

If you google "Never Lose Money", you will probably find it as one of Buffett law. If asked you can choose between
a) investment that lose 20% for first year and gain 20% the next year,
b) investment that gain 20% for first year and lose 20% the next year.
Which one will you choose?

Without any calculation, I thought b) will result in better result but actually both are equally bad.

a) 0.8 * 1.2 = 0.96 => 96% of original investment
b) 1.2 * 0.8 = 0.96 => 96% of original investment

You will lose 4% regardless of the choice. Therefore for every loss you make, you need a much better returns just to get back your investment.

Thursday, September 17, 2009

Troubled Companies: ASA Group Holdings (A25)

Continuing with analyzing troubled companies, I found ASA Group based on its declining revenues since 2004.

Company Info:

ASA Group Holdings Limited is a Singapore-based investment holding company. The Company operates in manufacturing and selling ceramic tile.

IPO Detail:

The IPO was around 10 years ago, so I shall not state much details. A quick check at the list of Executive Directors at the IPO and the current list show that not surprisingly, none of those in the IPO are still around.

Competitive Strength in IPO:

The directors of the Group believe that it produces one of the leading brands of high-end ceramic tiles in China. The Group considers the following to be among its competitive strengths:-

* Established brand name of ‘‘ASA’’ supported by heavy marketing and promotional efforts through television and bus advertisement and participation in trade shows.
* A wide distribution and service network via its 37 branch offices and more than 1,500 distributors and dealers located mainly in eastern, south-western and northern China.
* Strong design capabilities via its in-house Design Department.
* Wide range of products in over 200 designs to meet the tastes and demands of different consumers.
* Fully automated production lines which help to maintain the quality of ASA ceramic tiles.
* Strategic location of its factory with easy access to canals for raw material supply and the railway stations.


* Xiandai
* Pan Asia
* Prince
* Importers of foreign ceramic tiles

What happen?

Using the annual reports of FY2008 and FY2007 to find the reasons and challenges.

* Natural disasters in China
* Stringent environmental controls since ceramic contribute to air pollution
* Bank of China tighter credit control

* Chinese government curbing price of real estate
* Credit tightening policies imposed on banks
* Fierce competition in both domestic and international ceramic tile markets
* Increasing demand for raw materials
* Higher labor costs
* Higher requirements for environmental protection

Interesting development:

Shanghai Jinming Investment has bought the share at $0.09, a premium over its existing price. Not sure how big the company is since it is private. Technically, the company must have seen some value in the company or perhaps its asset. Also, Mr Poh Choo Bin has also slowly accumulate shares of ASA. A quick check shows he was a Substantial Shareholder of Viz Branz. I am going to buy a small amount of the share and hope that the buying of Shanghai Jinming indicates their positive sentiment to ASA.

Investment tips:

Technically speaking on the balance sheet, the future is still bleak for ASA Group. Their recent half-year statement shows revenue still falling about 41%.


  1. ASA Investor Relation Website
  2. SGX - ASA Group IPO in 1998
  3. SGX - ASA Group Annual Report FY2008
  4. SGX - ASA Group Annual Report FY2007
  5. SGX - Shanghai Jinming taking 24.37% shareholding

Monday, September 14, 2009

Reading Warren Buffett Shareholder Letters

Warren Buffett is one of the richest person and successful investor on the world. He mentions what business impresses him in 2007, so I summarize it. It is better to read the whole letter though, but nevertheless the summary:

* a business we understand;
* favorable long-term economics;
* able and trustworthy management;
* a sensible price tag.

We like to buy the whole business or, if management is our partner, at least 80%. A truly great business must have an enduring “moat” that protects excellent returns on invested capital. Therefore a formidable barrier such as a company’s being the low-cost producer (GEICO, Costco) or possessing a powerful world-wide brand (Coca-Cola, Gillette, American Express) is essential for sustained success. Our criterion of “enduring” causes us to rule out companies in industries prone to rapid and continuous change. Additionally, this criterion eliminates the business whose success depends on having a great manager. There’s no rule that you have to invest money where you’ve earned it. Indeed, it’s often a mistake to do so: Truly great businesses, earning huge returns on tangible assets, can’t for any extended period reinvest a large portion of their earnings internally at high rates of return.

Interesting, the manager is not the key but rather the business outlook together with the manager. Also, mention about companies which cannot reinvest a large portion of earnings internally at high rates of return. That is where he comes in as a capital allocator and 'pool' the money generated and reinvest them accordingly.

Let’s look at the prototype of a dream business, our own See’s Candy. See’s sold 31 million pounds, a growth rate of only 2% annually compared to last year when it was bought. We bought See’s for $25 million when its sales were $30 million and pre-tax earnings were less than $5 million. The capital then required to conduct the business was $8 million. (Modest seasonal debt was also needed for a few months each year.) Consequently, the company was earning 60% pre-tax on invested capital. Two factors helped to minimize the funds required for operations. First, the product was sold for cash, and that eliminated accounts receivable. Second, the production and distribution cycle was short, which minimized inventories. Last year(2006), See’s sales were $383 million, and pre-tax profits were $82 million. The capital now required to run the business is $40 million. This means we have had to reinvest only $32 million since 1972 to handle the modest physical growth – and somewhat immodest financial growth – of the business. In the meantime pre-tax earnings have totaled $1.35 billion. All of that, except for the $32 million, has been sent to Berkshire (or, in the early years, to Blue Chip). After paying corporate taxes on the profits, we have used the rest to buy other attractive businesses. There aren’t many See’s in Corporate America. Typically, companies that increase their earnings from $5 million to $82 million require, say, $400 million or so of capital investment to finance their growth. That’s because growing businesses have both working capital needs that increase in proportion to sales growth and significant requirements for fixed asset investments. A company that needs large increases in capital to engender its growth may well prove to be a satisfactory investment. There is, to follow through on our example, nothing shabby about earning $82 million pre-tax on $400 million of net tangible assets. But that equation for the owner is vastly different from the See’s situation. It’s far better to have an ever-increasing stream of earnings with virtually no major capital requirements. Ask Microsoft or Google.

Sounds easy but the hard part is to find and 'sense' a business with that "moat". But interestingly, the 2% sales growth did not affect valuation. It is hard to believe a company can sustain it position with a historical 2% growth. Also, ironically he mentions tech companies like Google where moat are really typically harder to maintain.

One example of good, but far from sensational, business economics is our own FlightSafety. This company delivers benefits to its customers that are the equal of those delivered by any business that I know of. It also possesses a durable competitive advantage: Going to any other flight-training provider than the best is like taking the low bid on a surgical procedure. Nevertheless, this business requires a significant reinvestment of earnings if it is to grow. When we purchased FlightSafety in 1996, its pre-tax operating earnings were $111 million, and its net investment in fixed assets was $570 million. Since our purchase, depreciation charges have totaled $923 million. But capital expenditures have totaled $1.635 billion, most of that for simulators to match the new airplane models that are constantly being introduced. (A simulator can cost us more than $12 million, and we have 273 of them.) Our fixed assets, after depreciation, now amount to $1.079 billion. Pre-tax operating earnings in 2007 were $270 million, a gain of $159 million since 1996. That gain gave us a good, but far from See’s-like, return on our incremental investment of $509 million. Consequently, if measured only by economic returns, FlightSafety is an excellent but not extraordinary business. Its put-up-more-to-earn-more experience is that faced by most corporations. For example, our large investment in regulated utilities falls squarely in this category. We will earn considerably more money in this business ten years from now, but we will invest many billions to make it.

As usual, how do they know FlightSafety is the best? Most companies will always claim they are the better companies.

Now let’s move to the gruesome. The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

Singapore Airlines was a good company but recently facing too much competition from the smaller airlines. But hard to imagine Singapore Airlines in financial troubles since it is part of Singapore pride.

To sum up, think of three types of “savings accounts.” The great one pays an extraordinarily high interest rate that will rise as the years pass. The good one pays an attractive rate of interest that will be earned also on deposits that are added. Finally, the gruesome account both pays an inadequate interest rate and requires you to keep adding money at those disappointing returns.

Finding a business that is understandable is not easy. For me, those easy to understand business are mostly those without a moat, since bigger companies typically have many subsidiaries and mixed of business. One of the important criteria should be favorable long-term economics, because even Warren Buffett could not rescue the textile business he had at the start of his journey.


  1. List of Shareholder Letters

Thursday, September 10, 2009

Delisting Company: China Precision Technology (I78)

Company Info:

China Precision Technology Limited is an integrated manufacturing services provider for the consumer electronics, automotive and telecommunication industries. The Company provides precision engineering services, such as metal stamping, plastic injection moulding, die-casting, mould design and fabrication, as well as assembly and electroplating for metal and plastic parts. The Company operates in three segments: Electronic Tuner Component (ETC), Automotive and Others. ETC segment manufactures the mechanical parts of the electronic tuner, such as connectors, pins, frame and covers. Automotive segment provides plastic injection moulding and electroplating services for automobile parts. These parts include grills, logo and other accessory parts.

Offer details:
I missed this delisting offer on my alert but I fixed my alert so it will not happen again. I prefer this offer than Chartered because:

* No condition other than the usual regulatory.. Chartered offer will probably only materialize in end of November, December due to the condition stated in the document. I probably have a chance to buy it after I manage to cash out of Sihuan, provided the Sihuan deal complete.

* Uncertain of Chartered business if the offer lapse. Chartered loses money in the last few quarters and is a highly capital intensive company. If the offer is not completed, I feel very uncomfortable having Chartered in my portfolio. Furthermore, I am uncertain of Chartered fulfilling the conditions because I have no knowledge of the semiconductor industry.

Profit Margin:

33 lots @ $0.27 and selling $@ 0.28 = 2.39%

However because of my late entry, I am probably unable to get the stock at $0.27. I had been trying 40 lots @ $0.27 from Tuesday onward but yet to get it.


  1. SGX - China Precision Proposed Delisting

Monday, September 7, 2009

Chartered Semiconductor Offer Details

Following the fall of prices of Chartered Semiconductor after the lifting of the trading halt, there is a wider profit margin that makes it more attractive to look at. The story of ATIC, the Abu Dhabi Acquiror, and Chartered started since May 2009.

Chartered Timeline:

During the 28th May 2009, Business Times reported a rumor that ATIC is looking to buy Temasek stake in Chartered Semiconductor for around $2.4 to $2.6 per share. The stock went up 10%, to as high as $2.22 during that day. Chartered immediately deny any bids the next day and the price falls and rise gradually till another announcement in 12th June. Chartered revises the guidance upward for 2nd quarter and the prices rises to the high of $2.43 before falling gradually again.

The price hits the low of $1.8 during 17th July. Irony, since there was only 2 announcements before 17th July and both were not bad news. Perhaps, the interest of people anticipating the takeover of $2.4 to $2.6 wanes as no bids are made. The prices then slowly bounces back to $2.3 as the results of 2nd quarter are announcement at 24th July.

During August, some Directors acquire of small amount stock through the Restricted Share Unit(RSU). Not very sure what is it, but it should be related and similar to stock option. Finally, an official announcement of the bid is made today, 7th September.

Unlike Sihuan, I did not buy immediately because the profit margin was only 0.05% when I looked at it in the morning. The price now is around $2.60 instead of $2.66 at start. Luckily because of the unattractive margin, I did not get it at the $2.66 price range. If not, I will be sitting on top of a 3% loss immediately. Not sure of the reasons, perhaps some shareholders are cashing out after seeing the bid.

Nevertheless, it seems to be worth looking the offer in detail to determine if the deal will go through regardless of market movement. Besides the usual regulation and also some anti-trust laws requiring approval, there are quite a few financial requirements for Chartered.

* Diminution(Decline) in Company's consolidated Total Equity to an amount < US$1,400m.
Unaudited @ June 2009 was $1,593m.

* Net revenue, excluding net revenue of SMP(Silicon Manufacturing Partners), from 1st July to 30th November > US$550m.
Unaudited @ June 2009, half year net revenue was $593m, unsure of revenue from SMP.

* Cash and equivalents > US$585m.
Unaudited @ June 2009 was US$774m.

* Reduction of order not less than 15%

Note that I simplified most of the details, and the document mentioned more clearly with the various test dates, and the different conditions for various dates. Despite the higher profit margin of around 2.38%, I prefer to wait for the end of tomorrow to decide whether to buy it or not. Because today US market is closed for holiday, Chartered might experienced more changes when the US market open since it is also traded on that exchange.


  1. The Wall Street Journal - Temasek Considers Offer for Chartered Stake (The Business Time article is archived and not free, so I referenced this instead)
  2. SGX - Chartered Rejects any bid from ATIC during 29th May amid rumors
  3. SGX - Chartered revise guidance upward for 2nd Quarter
  4. Reuters - Moody's says may cut Chartered Semi's rating

Abu Dhabi acquiring Chartered Semiconductor (H1Y)

Advanced Technology Investment Company LLC (ATIC), a technology investment company wholly-owned by the Government of Abu Dhabi, has proposed to acquire Chartered Semiconductor. Temasek Holdings, the largest shareholder of Chartered at around 63%, has agreed to the acquisition. After the acquisition, ATIC propose to delist Chartered Semiconductor.

Profit Margin:

The company offered $2.68, over the last done price of $2.66. Calculating the profit margin, it is only at 0.05%. Unless the current shareholder other than Temasek has strong opinion of the offer, it is not going to be worth buying now. There are also several conditions in the offer document for the acquisition to materialize. Currently, the stock is at a trading halt.


  1. SGX - Proposed Acquisition of Chartered Semiconductor
  2. Press Release

Thursday, September 3, 2009

Troubled Company: Zhonghui Holdings Ltd (Z04) 30 minute analysis

Company Info

Our core business is that of the provision of turnkey services involving the supply of entire domestic waste management systems comprising technical advisory services, design, supply, delivery, installation, commissioning and after sales support. We mainly undertake projects providing fully integrated solid waste management systems for municipalities.

IPO Detail:

New Shares Offered: 75 million
by Placement: 73 million
by Public Offer: 2 million
Offer Price per share: S$0.22
Commence Trading: 29 Oct 2004
Lead Manager/Underwriter: Daiwa Securities SMBC

Net IPO Proceeds: S$14.2 million
$6.2m to acquire land use rights and construct a factory and machinery
$4.1m to pursue expansion opportunities in BOT projects
$1.6m to expand marketing network
$1m to purchase and renovate offices
$0.4m for R&D
$0.4m to recruit personnel
$0.5m balance for working capital

No fixed dividend policy

Competitive Strength:

  • We possess specialised technology and know-how

    Our systems comprise of many components, each requiring different, varied and specialised precision engineering equipment to manufacture. We possess intellectual property rights over specialised technology used in our waste management systems and have been presented with a number of awards in respect of our technology. With our proprietary technical know-how, expertise and experience, and our patented technology, we are able to customise our systems and services to design innovative and value-added systems and processes to cater to the needs and requirements of our customers in terms of quality, efficiency, suitability and affordability. Our specialised technology constitutes one of our core strengths. Our specialised technology is best illustrated by our patents obtained for our High Water Content Waste Grinder and Integrated Waste Processor and our know-how relating to the incineration, de-odourisation and fermentation processes.
  • We are a comprehensive one-stop waste management solutions provider

    We provide a wide range of waste management services to our customers. We are able to undertake turnkey waste management projects and provide one-stop waste management solutions to our customers, ranging from consultancy and design services, supply of components and equipment installation to commissioning. In addition, we also provide after sales services for our waste management solutions.
  • Familiarity with the waste management industry and the business environment in the PRC

    We believe that, as compared to imported systems from overseas, our systems are more suited for the local market in terms of effectiveness and rate of waste recovery. We generally have a better understanding of the type and quality of solid waste in the PRC and the type of by-products that can be created for useful application by the agricultural industry and for infrastructure development. Unlike countries where domestic waste is easily segregated into recyclable and non-recyclable waste, the domestic waste in the PRC is generally not segregated. Imported systems are therefore generally not modified to efficiently process PRC domestic waste effectively. The
    wear and tear of our systems is also at a slower pace compared to those systems imported from overseas as our systems are capable of processing and handling the local waste better. The by-products generated from our systems are typically in the form of fertilisers and building materials that are suitable for PRC’s current economic needs for farming and infrastructure development. As such, we believe that our localised systems will help our customers achieve lower operating and maintenance costs.
  • We have established a reputation in the waste management industry in the PRC

    Even though the waste management industry is a relatively new industry in the PRC, we believe we have an in-depth understanding of PRC’s solid waste management industry. In a short span of three years, we have attracted specialists in the field of waste management to join our Group and we have managed to secure contracts relating to the provision of waste management systems in the cities of Lang Zhong , Ba Zhong , Xi’an and Jiao Zuo. The total contract value of these projects is in excess of RMB 100 million. As a result of having undertaken these projects, we believe that we have established a good reputation within the solid waste management industry.
  • Our participation in the CMEC Scheme

    The CMEC has set in place a scheme (the “CMEC Scheme”) under which the CMEC will act as the overall coordinator and main contractor for the overseas waste management projects. CMEC will appoint waste management system providers in the PRC as sub-contractors for such projects. Zhonghui China has been identified and appointed by the CMEC to participate in the CMEC Scheme. We believe we were selected by CMEC to participate in the CMEC Scheme because of our patented technology and our experience in the field of providing integrated waste management solutions for domestic waste.We believe that our participation in the CMEC Scheme will enable us to expand our network into markets outside the PRC. Our appointment under the CMEC Scheme will enhance our reputation and provide opportunities for us to establish our presence internationally. Currently, our Directors are not aware of any other corporation in the PRC which has been appointed as a waste management system provider under the CMEC Scheme.
  • Our strengths in R&D

    Being a high-tech waste management solutions provider, we place a strong emphasis on R&D activities and believe in focusing on developing our technology and technical skills. Our R&D team is headed by Mr Wang Yucai who is a renowned specialist in the field of waste management in the PRC.
    We also have close working relationships with the R&D teams from Northwest Sci-Tech University of Agriculture and Forestry and Xi’an University of Architecture & Technology, for the R&D of new processes and equipment. We believe that such collaboration arrangements together with our in-house research team which possess strong R&D
    capabilities will help us in maintaining a competitive edge and ensuring that our technology is continually improved and kept up-to-date with the latest advances.
  • Competitive Pricing

    Our waste management systems are competitively priced compared with those of foreign imports, although we believe that they are comparable in terms of technology. In addition, we believe our systems are competitively priced when compared to locally manufactured waste management systems.
  • We have an experienced management team

    Our Executive Directors, Mr Gao Bin, Mr Wang Yucai and Mr Hao Zhongwen, have approximately a total of 35 years’ experience amongst them in the management and research of environmental conservation in the PRC. Our Executive Directors, supported by our Executive Officers, have been instrumental in spearheading our growth. The industry knowledge, business experience and business contacts of our Executive Directors are valuable assets to our Group and essential to our growth.
  • We are committed to quality

    We are committed to quality and place a great emphasis on quality assurance in our operations as well as timely delivery of our systems and services. Since the commencement of our business in the domestic waste management industry, we have not received any material complaints from our customers nor have we encountered any material disputes with our customers relating to the quality of our systems and services. We believe that quality assurance is important to our existing and potential customers. Our commitment to quality is key to maintaining our reputation in our industry.


  • Beijing Zhong Yi Huan Neng Environmental Technology Co., Ltd
  • Beijing China Union Engineering Co., Ltd
  • China Academy of Engineering Physics Environmental Conservation Engineering Research Centre
  • Shanghai Shengong Environment Corporation
  • Changshu Rixin Mechanism Co., Ltd


  • Wong Hung Khim, Non-Executive Chairman & Independent Director, since 2004
    Directorship in 3 companies
    Previous Directorship in 27 companies and reasons for leaving unknown

  • Gao Bin, President and Executive Director, since 2004 joined 1999
    Directorship in 1 other company
    Previous Directorship and reasons for leaving unknown:
    Shaanxi Zhong Jian Property Development

  • Wang Yucai, Assistant General Manager and Executive Director, since 2004 joined 2004

  • Hao Zhongwen, Chief Engineer and Executive Director, since 2004 joined 1999

  • Liu Wei, Independent Director, since 2004

  • Ang Kheng Hui, Independent Director, since 2004
    Previous Directorship and reasons for leaving unknown:
    Mirage Production

Investment tips:

Why not?
  • Sensitive to technological changes to compete
  • Outcome of project cannot be estimated reliability
  • Unable to continually secure new projects since mostly one-off
  • Non-renewal of permits and business licences
  • Dependent on contract manufacturer and sub-contractors
  • Defense of IP troublesome and expensive
  • Subject to environmental laws and regulations
  • Rely on Executive Directors and the relationships
  • Difficult to evaluate because of short history (year 2000, IPO on 2004)
  • China accession into WTO may introduce competition
  • Undertake BOT projects which are capital intensive
  • Exposed to claims for defects or errors in the systems because no insurance yet
  • Around 100 other companies in PRC can treat and manage solid waste
  • Competitive pricing as a strength seems to indicate a low margin way of competing

Spent slightly longer than 30 minutes, so I have to be even faster somehow. I choose to always list competitive strengths in full wordy text because it is quite important and it what can differentiate companies. However, in future I should be ignoring R&D since that is what every listing companies claimed to excel in. Without looking at the current news of its trouble, the profit margins of the company @ 50+% look too impressive. I haven't analyze what led to its trouble and whether it can be foreseeable yet. However, after looking at KXD and now Zhonghui, I learn to ignore any results preceding their IPO. It just takes only a few years for a company to become zero although I have not investigate the causes yet. I plan to continue speed reading and extracting information from most companies before looking into certain companies in detailed.

Tsit Wing Exit Offer Rejected

Company Info: Tsit Wing International Holdings Limited is an investment holding company. Through its subsidiaries, the Company is engaged in the processing of coffee beans, distributions of coffee, tea and related products, as well as operations of cafe shops and restaurants. The Company principally operates in Hong Kong, People’s Republic of China and Canada. The Company’s subsidiaries include Tsit Wing International Company Limited, Tsit Wing Trading Limited, Tsit Wing Enterprises Limited, Cadiz Enterprise Limited, Tsit Wing (China) Co. Limited, Tsit Wing (Hong Kong) Company Limited, Tsit Wing Coffee Company, Limited, TW Cafe Limited, Tsit Wing (China) Investment Limited, Zhuhai Tsit Wing Food Co Ltd, TW (China) Cafe Limited, Shanghai Tsit Wing Food Co. Ltd and Tsit Wing Australia Pty Limited.

Reasons for Rejected Exit Offer: Although Tsit Wing Exit Offer was approved by at least 75% of present Shareholders, it had also been voted against by > 10% of Shareholders too. Thereby, the exit offer have lapsed.


Not sure what will happen to the price, but probably Tsit Wing will attempt to propose another Exit Offer in future. Part of its reason for delisting is reducing the compliance costs in maintaining its listing status. It will be interesting to track what will happen to a lapsed exit offer company.


  1. SGX - Tsit Wing Exit Offer Lapsed
  2. SGX - Tsit Wing Exit Offer for reference