tag:blogger.com,1999:blog-8557192882205137465.post3779818635865593280..comments2024-02-21T10:51:47.184+08:00Comments on Under the Willow Tree: Liang Huat Aluminium Ltd – Return From the Dead?Unknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8557192882205137465.post-80882162943534239912007-09-04T03:08:00.000+08:002007-09-04T03:08:00.000+08:00Hi, thanks for doing this write up.Just my point o...Hi, thanks for doing this write up.<BR/><BR/>Just my point of view.. Previously, liang huat was a relatively big company. At least according to past annual reports I read. There was a time where they were regional, with turnover of 140+ mil per year.<BR/><BR/>What happened then would probably be the usual construction problems that struck companies like weepoh, csc, yongnam, bbr, l&m, and the other companies, during the 2001-2003 period.<BR/><BR/>From what I read, essentially the negative equity is due to the huge bank loans, primarily from uob and maybank.. <BR/><BR/>Also, the earnings turnaround part has been fudged a little.. To be exact, the other operating income during 2007 and the other items during 2006.. This should be cancelled off, because 2007 was a write back of the provision done in 2006.. Even with that removed, its somewhat like a turnaround from loss to profit.. Not as remarkable as -1.22 to 1.1 of course.<BR/><BR/>The reason for the insider sales, is not because they want to sell, but because the upper management shares has been pledged to the creditors (uob and maybank) as collateral. So uob and maybank has the right to sell them to get back cash. Thats unfortunate for the major shareholder.<BR/><BR/>The return from the dead part, is part of this large controversial topic in channelnewsasia forum. Generally because there was a 10 to 1 consolidation and new shares issued to creditors and investors.<BR/><BR/>Basically, the result is, <BR/>1) current shareholders have their stakes cut by 10<BR/>2) liabilities of loans have been converted to shares, thus no more negative equity.<BR/>3) according to the offer information statement, the EPS for FY2006 would have been changed from -1.22cents to 4cents instead.<BR/>4) new majority shareholder with 70% stake. (possible RTO?)<BR/>5) large share overhang, as creditors may not want a vested interest in the company, so they may sell off their debt converted shares.<BR/><BR/>That said, I would think the valuation is very difficult to do. The key reason is because of any business injection or some improvement in its business prospects. (which may be possible with a new shareholder)<BR/><BR/>caveat emptor.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8557192882205137465.post-29190158857158499212007-09-03T21:59:00.000+08:002007-09-03T21:59:00.000+08:00thx for the note i have made appropriate modificat...thx for the note i have made appropriate modifications.utwthttps://www.blogger.com/profile/10077151002330545906noreply@blogger.comtag:blogger.com,1999:blog-8557192882205137465.post-63651067765141153782007-09-03T20:53:00.000+08:002007-09-03T20:53:00.000+08:00You might want to check your charts, liang huat is...You might want to check your charts, liang huat is trading at less than $0.10 for the past whole year. Only after the recent consolidation did it hit above $0.10. I guess your charts re-adjust thus give u a false perspective.Anonymousnoreply@blogger.com