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I've sold here, crystallising a loss of c. 30%. It's a shame because I think this is a real company doing proper business, the directors are genuine, the online stores look pretty good, etc. etc. Structurally, though, there is something inherently wrong with listing a Chinese company in London. The UK investor base doesn't trust the companies, with good reasons, having been bitten in the past. And so the companies don't get a fair hearing, even in a case like this where the bona fides look pretty good and where it appears that they are not here simply to take money from gullible foreigners being sold a foreign growth story. I reckon that this will delist sooner or later, in the absence of a proper valuation, and unfortunately I don't feel confident that UK investors will get a decent price to exit. Hopefully they will, but I simply don't know. I'll kick myself if this turns out to be an awful selling point but I think I'll just stick to UK companies for now until I have an account which is enabled to trade directly on the Hong Kong exchange. Best wishes to everybody who stays in this one. I really didn't want to sell it!
I was trying to buy only £1400's worth at about 3.30 and they would not accept, and gave up. Short of shares to sell.
The MM's marked it down 20+% first thing, and as at time of writing, less than £80k of shares have been sold. It's is not a mass exodus. The MM ensured that. Nothing too bad in rns, The interim rns stated a cash pile equivalent to 64p a share. There will be no need to draw down this cash, even if 2015 t/o figure is 13% down. T/o should still be c£80M and at 35% margin = £28M. Co will have the alternative of manufacturing outsourced goods which it ceased earlier this FY. Some commentators disbelieve the co accounts, esp. the cash pile. The FYR will again be interesting, and no doubt, these commentators will see today's rns as being the first warning sign that the co will not pay a final divi. Indeed, if that becomes the case, then red flags will be all over this share. To try and get some clarity on the cash pile, I have asked the co to share buy-back all the shares issued under the scrip alternative. Scrip offers only dilute the shareholding and completely negate the divi. I would urge all investors to take the cash divi at 2p. With the export restrictions, and self-imposed import restrictions of Russia, I would have hoped the co is trying to export to a lucrative and friendly ally? I have also penned this question. The final divi is of paramount importance. IF it maintains at 2p, then even if buying-in price is 60p a share, divi is still a v healthy 6.7%pa, and at todays sp would be over 10%pa. A 2p final divi would only cost £1,5M, and if it does not pay, jumping ship would be my decision. All in MHO of course.
Hi riddler. I don't have a position here, but don't think today's RNS looked too bad. Seems different to NBU, on face of it at least?
To what is already well and truly priced into the share in my opinion and a great buying opportunity.
Now realising this is only going up from here and buying back in IMO
know a mail address for CAMK. The web site does not appear to have a 'contact us' option. Could not find an address for the offices in China. The registered office in Jersey is only an address, and no tel. nos., or mail address. It looks like they do not want contacting?
Another issue affecting sentiment has been selling by some Chinese shareholders who backed the company before it listed on Aim. But I understand that the stock overhang has now cleared which could be significant given this has been a dead weight on the share price. Value on offer Post the half-year results, analyst Matt Butlin at nominated adviser and brokerage Allenby Capital edged up his 2014 EPS estimate by 3 per cent to 26.6p, reflecting recent weakening of sterling against the Renminbi. This is based on full-year pre-tax profits of £27.3m, down around 10 per cent on 2013, on relatively flat revenues of £109m. True, there is a strong second half bias to Camkids’ sales (58 per cent of the full-year revenue estimate), and even if that forecast is hit then profits are still expected to decline for the 12-month period. However, I feel that this is more than reflected in the current valuation as the shares are only rated on a miserly two times earnings estimates. It is also fair to say that such a rating would imply the company has gone ex-growth. That is close to the mark as Allenby forecasts 2.5 per cent uplift in revenue and pre-tax profits next year. But even taking that into consideration, such an earnings multiple is simply too harsh for a profitable and cash generative operation. Other investors may be starting to see things my way too: the shares jumped 18 per cent post results, albeit only back to the level of my update last month. Admittedly, it’s going to take time for sentiment to improve to the extent that Camkids can command a more sensible rating, but I still feel it will eventually and on a bid-offer spread of 52p to 54p, I remain a buyer of the shares.
Extreme undervaluation Such an undervaluation seems extreme to say the least, even after factoring in the negative sentiment towards Chinese companies, given that Camkids’ board are able to easily fund that 4.4p a share dividend in the future. The rolling 12-month yield is 8.4 per cent. It’s clear to me too that the company’s planned investment in a new production facility at a cost of £20m – the current one is running at 85 per cent capacity – can largely be covered by cashflow over the next couple of years without eroding that bumper cash pile. It’s also worth pointing out that Camkids’ focus on the children’s market is a key differentiator of the business from the cut throat adult apparel and clothing market. Based in the Fujian province in China, the company sells its merchandise to 17 authorised distributors operating over 1,300 franchised retail stores. True, the children’s branded clothing market is still highly competitive and a number of global brands are offering larger discounts on their product ranges in China. But by offering value for money branded outdoor clothing for teenagers and children, and targeting tier three and four cities in China to expand its reach – the number of retail outlets has increased from 1,100 since June 2013 – the business has been able to withstand these pressures. Addressing shareholder concerns A key issue concerning investors, and weighing on Camkids’ share price, has been the 66.9 per cent shareholding of chairman Zhang Congming. That’s because if he continues to take up the dividend as a scrip option, and other investors opt for the cash payment, then his holding will eventually increase to 75 per cent of the 77m shares in issue. It is at this level at which a delisting of the shares from the Alternative Investment Market could take place, if he so desired. Mr Congming was issued with 1.58m scrip shares in lieu of the final dividend of 2p a share in July which raised his stake from 66.28 per cent of the issued share capital. It’s therefore worth noting that although Mr Congming will opt for the scrip option for his interim payout, the number of the scrip shares issued will be capped so that his percentage shareholding in the company will not increase. The balance of the dividend will be paid in cash to him. I feel this is a wise decision and one that should help allay investors’ fears about Camkids’ Aim-listing and the motives of the majority shareholder.
The share price of Camkids (CAMK: 54p), the Aim-traded Chinese designer, manufacturer and distributor of outdoor apparel, has been incredibly volatile in the six weeks since I advised averaging down your holdings at 51p (‘Bargain shares new buying opportunities, 12 August 2014'). This is almost entirely down to a number of factors, none of which reflect the operational performance of the company. The cancellation of the dividend at Chinese rival Naibu (NBU: 23p) clearly spooked investors and prompted me to exit that particular holding, but it also had a negative effect on sentiment towards Camkids. To compound matters a suspected fraud at Frankfurt listed Chinese company Ultrasonic has created further concerns and highlighted the potential for financial irregularities in companies from the region. It’s hardly a surprise then that some investors have tarred Camkids with the same brush and dumped the shares. But these worries have proved wholly unjustified. For starters, the company has just declared a 4 per cent rise in the interim scrip dividend to 2.4p a share. Shareholders can alternatively opt for a cash dividend of 2p a share, the same as the final dividend declared earlier this year. The company can easily afford to make the payment because in the latest six month trading period its operating profit rose 3.5 per cent to £12.6m (using a sterling Renminbi exchange rate of £1:RMB9.99) on revenues 5.8 per cent higher at £45.9m. Net profits of £9.1m covered the £1.5m cash cost of the payout almost six times over. Furthermore, with the first half of the financial year strong for cashflow as distributors settle accounts for sales made in the seasonally stronger second half, the company’s net funds increased from £31.1m at the end of December to £48.6m. That’s the equivalent of 64p a share, or 10p a share more than Camkids own share price. Or put it another way, with Camkids commanding a market capitalisation of £40m, or half its net asset value of £80m, we are getting a free ride on half the company’s assets and £8m of its own cash. It’s worth flagging up that the company has no bad debts amongst its distributors too. That’s important because Camkids’ extends credit for 120 days and had trade receivables of £33.3m at the end of June.
for shareholder value? I'm no fan of scrip issue. In essence, if everyone took the scrip, the no.of shares in circulation would increase by 10% ( annualised), thus devaluing the eps by 10%. Two alternatives for me, would be: 1) Dividend re-investment scheme. No share dilution, 2) Share buy-back scheme. EPS was 12p/s. Cash divi is 2p/s. Co. states cash rich, and can accommodate capex from own cash. If 2p/s ( £1.56M), was used to BB own shares, at todays price, 3M shares could be bought and cancelled. This would have the effect of increasing the EPS by 4% with no growth in PBT. As stated, not a fan of scrip, and is normally reserved for co's with cash flow problems. The doom mongers on Chinese AIM co's will pick up on this. Plenty of profit taking at 55p this am, expected, since some had bought in at below 40p. Barring catastrophes, the FYR should give, again a 4p+ divi, = 8% pa, which ought to give sp of c63p. Will it get there this year?, probably not. PI's will wait a few weeks before ex-dividend date, and start buying then. On a more positive note, it was good for the CEO to make a statement re: the bad press other Chinese AIM co's have had, and citing the differences between them and CAMK. Winter trading for CAMK is better than H1, and lets hope PI's see the on-going potential of this growth stock. An aggressive buy-back scheme by BOD's will see this share £1 in 2 years. All in MHO of course. GL
re rated after ridiculous sells of past 2 weeks
Camk smashed it Well done!
12p up and 27%
warning from you Riddler? Well done all here.
and divi that people feared would noit be paid....chairmans commitment to ongoing expansion and with the chinese governments recently announced policy of migrating 400 million people into urban areas from rural ..this company can only get bigger in an economy that is still expanding by 7% a year...and all of those that sold cos of NBU ...really ?
Results I have to say I can't see how they could be much better. If UK-based Aim companies paid half as much attrition to share holder value, Aim investors would be much wealthier. Great to hear the board will be visiting institutional investors. What a great interim dividend too and it's good to hear that the CEO isn't increasing his holding. No doubt the market will find a way to kick CAMK but I really don't believe it's justified. I'm very impressed.
I finished by saying 'bad news', in that there maybe a decrease in cash divi. Now that would surprise you I believe. It would surprise me following +ve previous rns's,
Test pack I don't make sense of your post. You start by saying a decrease in div will be a big surprise and finish by forecasting exactly that in cash terms. Problems at Naibu were flagged well in advance so while still a lot of questions I do not see why Camkids should need to cut the dividend. Market reaction is another point altogether as sentiment on these companies is very low. TW will be negative whatever numbers appear.
the big surprise would be a decrease. or. disaster, no int. divi.. The bod are aware of what happened to Naibu sp when they declared no divi, but CAMK is a different organisation, in that it manufactures, and the last update was forecasts were being met. If it pays 2.5p divi. ( 11%pa), then it will not reach yr high, and might spike at 55p If no divi, for whatever reason, 25p here we come. I think it will offer 1'5p cash, and 2.5p scrip divi. Bad news. All ih MHO of course
heres hoping for no surprises
To buy before the interim results are out on Monday. I'm expecting a big jump in the share price first thing after the last few weeks of nonsense. GLA
the inaugural interim divi was 2.3p with full year of 4.3p with a scrip offer or cash.....i would have thought we would be looking in the range of 2.5p-2.7p with full year of 4.7p + if the trading is in line with earlier announcements ...i also expect another blue day today and a gradual increase to results ...GLA
as a little game between posters, would anyone be willing to put a pence figure on CAMK divi on Monday? My guess is 1p.
and fantastic website ....seems they have deffo got it together ....results will be entertaining and i think very positive ....