Today (14Dec11, Wednesday), Cheung Woh had a big harvest and managed to buy back a huge 1,138 lots at $0.18/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [14Dec11]
It appears a few poor folks needed money in a hurry - this is perfectly understandable, following the massive mark-down in prices of most property and bank counters in the last few market-days - and had to sell their Cheung Woh shares.
Todate, Cheung Woh has bought back a total of 6,014,000 shares, or 1.921% of the total issued shares.
For Cheung Woh to continue buying back shares at $0.18 - presumably supported by the IDs and the entire BOD - we have to assume the management and BOD see $0.18 as a compelling price (when compared with the corresponding fair intrinsic value of each Cheung Woh share) to buy back the company's own shares in line with the objective to enhance the value of the remaining shares, including those of the controlling shareholder.
I know I sound like a worn record ...... but I believe Cheung Woh's BoD and ID's deserve shareholder commendations for their sustained buy-back pursuit. They have done this without fanfare but I'm sure it has had a beneficial impact for existing shareholders - the share price drop has been arrested and I hope a floor has been set from which the share price can move on and up. The BoD is demonstrating confidence in Cheung Woh's future. Lets hope the Chinese deal definitively closes in the not-too-distant future and we see a juicy dividend soon thereafter.
Vested
Well, this company did try to delist a few times but failed. Why ? I think they cannot garner enough support to reach the 90% acceptance level.
They could be using the share buy back (using the internal funds of the company) to achieve this purpose.
www.sharebuybacks.blogspot.com
Profit warning... affected by flood.
The financial results of the Group for the Third Quarter are expected to show a significant decline as compared to the previous quarter ended 31 August 2011. The performance of the HDD segment has been severely affected by the floods in Thailand as announced in our announcement on 25 October 2011.
In addition, the Group has recorded a substantial foreign exchange loss due to the capital reduction of Tysan Corporation Pte Ltd, a subsidiary of the Company, in the Third Quarter.
Further details of the Group’s performance will be disclosed when it announces its unaudited financial results for the Third Quarter.
What concerns me most about tonight's CWT disclosure is not so much the flood related narrative but rather the sentence "....... the Group has recorded a substantial foreign exchange loss due to the capital reduction of Tysan Corporation Pte Ltd .......... in the Third Quarter." The problems due to the Thai floods are understandable and, to be fair to CWT, have been fully disclosed by them before - but the Tysan FX loss issue, to my knowledge, is new.
We should bear in mind that Cheung Woh's management has traditionally been open and conservative and, IMHO, they commendeably adhere to a "no nasty surprises" mantra.
Vested
I suppose Cheung Woh's shareholders and potential investors ought to look beyond Q3 (ended 30Nov11) and even Q4 (ending 29Feb12), bearing in mind WD's and, to a lesser extent, Seagate's HDD production volume have been temporarily affected/cultailed by the ended Thai floods and the resultant shortage of some key components. It is a given that both WD and Seagate will have to ramp up HDD production volume asap to order to meet the current pent-up demand and global shortage of HDDs. One good thing for Cheung Woh is that as the group has no plants in Thailand and therefore its production capacity remains intact and ready to go, so when WD and Seagate ramp up production again in the next few months, Cheung Woh's production will follow suit and gets ramped up. I would imagine Cheung Woh is likely already well underway in manufacturing the semi-finished VCB and air comb parts in volume, in anticipation of the coming major ramp-up by WD and Seagate.
The anticipated substantial foreign exchange loss in Q3 due to the capital reduction of Tysan Corporation Pte Ltd, a subsidiary, should be accounting in nature, as the capital reduction exercise is the 1st step in Cheung Woh's planned disposal of its majority interest in the PRC-based vehicle parts business for cash to its PRC partner, which is scheduled to complete by end-Feb12. We should also bear in mind that it is probably in anticipation of a net cash B/S after the completion of the disposal that Cheung Woh's management and BOD have initiated the recent active buying back of shares.
Cheung Woh's 3Q financials ending Nov 30, 2011 are out.
http://info.sgx.com/webcoranncatth.nsf/V...10026C6F6/$file/CheungWoh_3rd_Quarter_FY2012.pdf?openelement
They reported a net loss for 9M 2011. Balance Sheet debt had increased to >2x of cash balances. OCF also was -ve for 9M 2011, and there was no FCF generated during the period.
Comments are welcome.
(Not Vested)
Thank you for sharing these Cheung Woh 9M results Musicwhiz,
While none of the drivers for these disappointing financials is news (i.e. Japanese Tsunami, Thai Flood, Solyndra bankruptcy, foreign exchange loss etc.), I have to admit I was hoping for the impact on Cheung Woh's bottom line to be somewhat less harmful. But the operative word here is "hoping" - I should have been a tad more sober - the further deterioration of the receivables and inventories position is troubling. But to be fair and to give credit where it is due, Cheung Woh's BoD had given the markets due prior warning regarding the reasons why profitability would deteriorate.
Moreover........ and in addition .......... it is to managements (continued) credit that the Company was back in the market today buying 140,000 Cheung Woh shares at S$ 0.18. This again gives confidence regarding the outcome of their Chinese portfolio action and a turnaround in the fortunes of their HDD business during 2012.
Vested,
RBM
(10-01-2012, 06:01 PM)Musicwhiz Wrote: [ -> ]Cheung Woh's 3Q financials ending Nov 30, 2011 are out.
http://info.sgx.com/webcoranncatth.nsf/V...10026C6F6/$file/CheungWoh_3rd_Quarter_FY2012.pdf?openelement
They reported a net loss for 9M 2011. Balance Sheet debt had increased to >2x of cash balances. OCF also was -ve for 9M 2011, and there was no FCF generated during the period.
Comments are welcome.
(Not Vested)