(11-01-2016, 01:51 PM)weijian Wrote: [ -> ]Hi CF,
Value investors track value, and of course value changes are toggled by fundamental changes. But we do live in a complicated world - whether sentiment toggle fundamentals, or fundamentals toggle sentiment...it is not very obvious. An approximately close (but not accurate) answer would be 'both' and it is up to the thoughtful investor to determine 'how much is each?'
Interesting view, which worth a further thought. Thank you
(11-01-2016, 01:51 PM)weijian Wrote: [ -> ]My aggressive means 'investing in non-defensive sectors' - where expectations are beaten-up or the future is muddy (but there is a track record from Mgt with a conservative balance sheet), not really the action itself.
When people are paying too much for uncertainty (non-defensive sectors), it might be better to invest in certainties (defensive sectors or simply put them in cash). When people are paying too much for certainty, it might be better to put money in uncertainties... There might just be a nice fat premium that lays the foundation for a bountiful harvest in the future 
Put money in uncertainties, may bring fat premium, but it comes with higher risk i.e. more likely to lose money. It is contradicting with the value investing principle i.e. don't lose money
I would rather put effort into higher level thinkings, with a longer time horizon, which might find certainties among the uncertainties, and put the money into those wrongly priced stocks.
How about that?
(learning and sharing)
(11-01-2016, 10:17 AM)krowten Wrote: [ -> ]I believe CM Pacific has debts that are in US dollars but I have not quantified that yet. I believe depreciation of RMB against US dollars has a huge impact on that - CM Pacific earns its income in RMB but has to repay its debts in US dollars!
According to AR2014, CMP has 220+150 Mil USD loan. Any idea why they are borrowing such a big amount in USD? Thanks.
Offshore USD or HKD loans (typically 2-3%) have much lower interest rates than onshore RMB loans (typically 5-7%).
Personally, I have divested my stake at an average price of mid 90s over the past few months due to the decline in China markets and also mainly to re-allocate to new companies. Huge mistake in not selling when the price was at its peak of $1.15
With that being said, I didn't expect to see such a huge plunge in the past 2 weeks.
Fully Diluted Shares: 1825 mil (approx)
7 cents dividend requires approx HK$700 million NPAT
8 cents EPS requires approx HK$800 million NPAT
The annualized 9M 15 earnings is around HK$670 million. This excludes the contributions from the newly acquired toll roads. The 4Q result should give us an indication on the impact of the newly acquired roads on the company's profitability and the state of its balance sheet.
If dividends are maintained, the current yield is over 8.5%.
(Not Vested)
(11-01-2016, 06:08 PM)Nick Wrote: [ -> ]Offshore USD or HKD loans (typically 2-3%) have much lower interest rates than onshore RMB loans (typically 5-7%).
Wasn't that the cause of the Asia Financial Crisis back in 97-98 ?
Quote:Personally, I have divested my stake at an average price of mid 90s over the past few months due to the decline in China markets and also mainly to re-allocate to new companies. Huge mistake in not selling when the price was at its peak of $1.15 With that being said, I didn't expect to see such a huge plunge in the past 2 weeks.
Selling at peak and buying at rock bottom require some luck!
(11-01-2016, 06:43 PM)touzi Wrote: [ -> ] (11-01-2016, 06:08 PM)Nick Wrote: [ -> ]Offshore USD or HKD loans (typically 2-3%) have much lower interest rates than onshore RMB loans (typically 5-7%).
Wasn't that the cause of the Asia Financial Crisis back in 97-98 ?
That is the factor along with currency deprecation.
The cause is simply inability to pay [Captain Obvious
].
Just ask yourself these questions...
Is there doubts in CMPacific's ability to pay or at least service the loans?
At what level will the profit or dividend be affected?
Is there worsening of the toll road business?
[Vested with bias view]
(11-01-2016, 05:20 PM)touzi Wrote: [ -> ] (11-01-2016, 10:17 AM)krowten Wrote: [ -> ]I believe CM Pacific has debts that are in US dollars but I have not quantified that yet. I believe depreciation of RMB against US dollars has a huge impact on that - CM Pacific earns its income in RMB but has to repay its debts in US dollars!
According to AR2014, CMP has 220+150 Mil USD loan. Any idea why they are borrowing such a big amount in USD? Thanks.
maybe interest on usd loan was lower than interest on rmb loan previously.
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We should look at free cash flow, rather than earning, to determine the sustainability of the dividend payout, especially with the company biz model. I agree the company is having multiple headwinds with interest rate hike and RMB depreciation.
My assessment, is the dividend will be either maintained or marginally cut in FY2015.
(remains vested)
(11-01-2016, 03:47 PM)CityFarmer Wrote: [ -> ]I would rather put effort into higher level thinkings, with a longer time horizon, which might find certainties among the uncertainties, and put the money into those wrongly priced stocks.
How about that?
(learning and sharing)
I guess u are a follower of Howard marks and his second level thinking theory. I am also aligned with this ideology (I do use this in everyday life decision making). I do have to say it is quite difficult to execute.. 1.5x level thinking (not thinking deeply enough) will be risky. On that point, the ideology may not be for everyone.
(Sharing my investment philosophy)
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(11-01-2016, 10:08 PM)thor666 Wrote: [ -> ] (11-01-2016, 03:47 PM)CityFarmer Wrote: [ -> ]I would rather put effort into higher level thinkings, with a longer time horizon, which might find certainties among the uncertainties, and put the money into those wrongly priced stocks.
How about that?
(learning and sharing)
I guess u are a follower of Howard marks and his second level thinking theory. I am also aligned with this ideology (I do use this in everyday life decision making). I do have to say it is quite difficult to execute.. 1.5x level thinking (not thinking deeply enough) will be risky. On that point, the ideology may not be for everyone.
(Sharing my investment philosophy)
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Yes, it is quite difficult to execute, but can be improved by experience and skill. You also not guaranteed to find invest-able stocks after the process.
IMO, the process should be suitable for everyone, but the result depend on individual skill level and experience.
(I am a keen follower of Peter Lynch, but I do read Howard Marks' memos)
if I look at their Q3 2015 results, interest bearing loans are over HKD 4.7 bn, but its forex losses are only HKD 2.1 mio. There was a big move in the USD CNY in Aug 2015, how do I reconcile the numbers? Am I looking at the wrong forex loss number or is their foreign currency denominated loans a small %?