Sino Grandness

(30-10-2014, 11:31 AM)brattzz Wrote: sorry, are you guys still vested? :O
gosh, looks like red flag already...

why not play it safe first?

*not vested at all*

What exactly is the red flag bro?

As of end June 2014, the company has trade receivables of more than 1B RMB. Since they need the cash so urgently, has the CFO and CEO ever consider giving their customers a discount on the receivables to improve their cash flow rather than to sacrifice shareholder's interest by placing the shares at a big discount?

Their inability to collect the receivables is a very big red flag.

(Not vested)

(30-10-2014, 12:05 PM)leeeta Wrote:

(30-10-2014, 11:31 AM)brattzz Wrote: sorry, are you guys still vested? :O
gosh, looks like red flag already...

why not play it safe first?

*not vested at all*

What exactly is the red flag bro?

Hi Brattzz,

What is the red flag and what are your concerns?
Can you share?

My take on the Thai's amendment to the subscription agreements.
It looks like a face saving measure to abort the deal. Gentlemen do not go back on their agreement and blame it on some reports written by some unknown writer.
Surely you would expect them to do their sums before agreeing it in the first place?

Not vested

Strange. The market seems to react positively to this change of event (which IMO negatively impacts the intrinsic value of Sino Grandness).

It does show that the Thais are still interested to follow through with the deal though, despite the negative press, while skimping on cash.

Am I missing anything here?

(30-10-2014, 12:20 PM)Tiggerbee Wrote: As of end June 2014, the company has trade receivables of more than 1B RMB. Since they need the cash so urgently, has the CFO and CEO ever consider giving their customers a discount on the receivables to improve their cash flow rather than to sacrifice shareholder's interest by placing the shares at a big discount?

Their inability to collect the receivables is a very big red flag.

(Not vested)

I don't think they need the cash THAT urgently, the main driver of the placement is the potential synergy, I feel. I also don't think their current need for cash is worth offering discount on their products, which might impact their future bargaining power with their clients. Moreover, their clients may have their own cash flow concerns as well.

Last I check, there haven't been any significant increase on their cash conversion cycle over the years which offsets the otherwise worrying growth in A/R. Please correct me if I got my facts wrong.

The announcement on placement share price adjustment has sparked intense debate among friends.

One camp is devastated. Apart from a lower sum from the Thai investors, they think this is the pretext for Thai investors to pull out as share price will fall below 40c.

The other is upset with the share price adjustment too.

But they think that share price adjustment is unavoidable as TTA, being listed on Thai Exchange, has to propose this to safeguard the interests of its minority shareholders.

They are also of the opinion that TTA Board must have carefully reviewed the situation, arising from the share price plunge after circulation of the short-seller report, and is satisfied with Sino’s financials. If the board has doubt, it would have asked Sino to find a way to terminate the deal. The alternative to Sino’s not complying is exposure of its frauds.

Ironically, the announcement on share price adjustment serves to confirm their long-held belief that Sino is no fraud.

(30-10-2014, 01:22 PM)portuser Wrote: The announcement on placement share price adjustment has sparked intense debate among friends.

One camp is devastated. Apart from a lower sum from the Thai investors, they think this is the pretext for Thai investors to pull out as share price will fall below 40c.

The other is upset with the share price adjustment too.

But they think that share price adjustment is unavoidable as TTA, being listed on Thai Exchange, has to propose this to safeguard the interests of its minority shareholders.

They are also of the opinion that TTA Board must have carefully reviewed the situation, arising from the share price plunge after circulation of the short-seller report, and is satisfied with Sino’s financials. If the board has doubt, it would have asked Sino to find a way to terminate the deal. The alternative to Sino’s not complying is exposure of its frauds.

Ironically, the announcement on share price adjustment serves to confirm their long-held belief that Sino is no fraud.

Hope I understand you correctly; you mean it indirectly confirmed that the Thais do not think SG is a fraud (since they are still interested)?

(30-10-2014, 01:09 PM)Wildreamz Wrote:

(30-10-2014, 12:20 PM)Tiggerbee Wrote: As of end June 2014, the company has trade receivables of more than 1B RMB. Since they need the cash so urgently, has the CFO and CEO ever consider giving their customers a discount on the receivables to improve their cash flow rather than to sacrifice shareholder's interest by placing the shares at a big discount?

Their inability to collect the receivables is a very big red flag.

(Not vested)

I don't think they need the cash THAT urgently, the main driver of the placement is the potential synergy, I feel. I also don't think their current need for cash is worth offering discount on their products, which might impact their future bargaining power with their clients. Moreover, their clients may have their own cash flow concerns as well.

Last I check, there haven't been any significant increase on their cash conversion cycle over the years which offsets the otherwise worrying growth in A/R. Please correct me if I got my facts wrong.

I think the main reason why the company has not been doing share buy backs is due to their cash flow issues. I wonder how they are going to pay out dividends if their free cash flow generation is so poor.

(30-10-2014, 01:42 PM)Wildreamz Wrote:

(30-10-2014, 01:22 PM)portuser Wrote: The announcement on placement share price adjustment has sparked intense debate among friends.

One camp is devastated. Apart from a lower sum from the Thai investors, they think this is the pretext for Thai investors to pull out as share price will fall below 40c.

The other is upset with the share price adjustment too.

But they think that share price adjustment is unavoidable as TTA, being listed on Thai Exchange, has to propose this to safeguard the interests of its minority shareholders.

They are also of the opinion that TTA Board must have carefully reviewed the situation, arising from the share price plunge after circulation of the short-seller report, and is satisfied with Sino’s financials. If the board has doubt, it would have asked Sino to find a way to terminate the deal. The alternative to Sino’s not complying is exposure of its frauds.

Ironically, the announcement on share price adjustment serves to confirm their long-held belief that Sino is no fraud.

Hope I understand you correctly; you mean it indirectly confirmed that the Thais do not think SG is a fraud (since they are still interested)?

The second camp concludes that if TTA Board doubts Sino’s financials, it will not be interested in a stake in Sino, even though at a much lower price of 40c?

And the board can stay away from the public view by getting Sino to withdraw on its own.

If there is any flaw in their assumptions, please share.