Member Info for asclypius

.. the shares are again very cheap. They are at a level where I could conceivably buy them again. But as someone who has followed them for a long time, I don't feel much goodwill towards them right now. They have had the opportunity to present themselves for questioning by private investors, and have chosen not to.

I followed this company for a decent period of time and could justify investing on the view the SP more than fully discounted the red flags. Page 66 of the annual report: "Related party relates to Fujian Jun Xiang Bags Co., Ltd. (formerly known as Quanzhou Naibu Sports Co., Ltd) in which a director, Mr Lin Huoyan was the shareholder in 2008 and 2009. Mr Lin Huoyan transferred his shareholding to his mother in 2010. The transaction for the acquisition of factory premise owned by the related party Fujian Jun Xiang Bags Co., Ltd. did not take place and was cancelled in 2012. The deposit for the property acquisition RMB10 million has been partly returned and the rest of balance RMB5 million was transferred to the deposit of long-term lease payment for the property." Also: "Ms. Lin Zhenzhi is the finance director of the Group’s operating subsidiary Naibu China Co., Limited and she is Mr. Lin Huoyan’s sister." Worth noting that the CFO also goes by the name "Li Zhen". - see the "About" page here: http://naibu.com/abt.asp?sid=22 Of course there is absolutely nothing wrong with having more than one name, but I found it frustrating the the CFO being the MD's sister was buried in the footnotes and was not obvious just from looking at her surname on the company's website. Nonetheless, I was happy to stay invested here for a year, but what eventually knocked me out of it was when I read the following in the preliminary results for 2013: "Operations at the Group's new Quangang plant have not yet commenced as planned; this is due to an unexpected shortage of labour which has driven labour costs upwards. However, the Group is taking various measures to recruit workers and is hopeful that it will be able to commence manufacturing in the summer. If sufficient number of workers cannot be recruited for at least six production lines to begin production by August 2014, the Company will then consider a number of alternative options, one of which may include the decision to abandon the commencement of production at Quangang and to dispose of the Quangang factory. " They paid RMB157 million for Quangang, and now they might get rid of it because they can't get workers for it? Quangang was supposed to be operational in Dec 2013, then Feb 2014, and as of May 2014 they were thinking of disposing of it. They intend to spend RMB 300mn to build a new "Naibu Industrial Zone" in Sichuan. This will be a very significant percentage of their entire cash reserves, and I would worry that the outcome will be the same as Quangang: delays, problems, and then talk about disposing it. The net cash was the main factor which helped to "de-risk" the investment for me, but now I fear the cash itself is at risk. Admittedly, the shares are again very cheap. They are at a level where I could conceivably buy them again. But as someone who has followed them for a long time, I d

Where would a disciplined growth investor start to think about buying this? I would say c. £25. That would be a £2 billion valuation, 42x profits estimated for this year and 30x profits estimated for 2015.

Still short from £62, happy to exit in mid £20s whenever it gets there. For anyone who is long and who really truly believes in the long-term future of the company, they might be better off ignoring the SP for a couple of years rather than putting themselves through the psychology of watching this volatility.

Picked up a few more c. 11p, which is my average entry price. Might possibly continue accumulating if this is still at or below 11p over the coming months.

Yes - administrators will write to shareholders to explain the outcome.

H&T: market cap £60 + net debt £21m. 194 stores. Implied value per store: £420,000. A&B: 128 stores sold, presumably the best ones. If each one sold for £420,000, that would provide nearly £54m. The debt level is £51m. About 60 stores still need to be shut down. I think it's most likely the equity will be completely wiped out in the clean-up operation.

Lower than previous years, yes - as expected. Lower than the first half rate of production , yes. They are still on track for the planned 55-60,000 ounces this year. I don't know if they had any maintenance/development shutdowns.

Results look ok to me, I think I was hoping for a little better but not bad overall. I'm lucky that my average entry price is just 11p, and I'd consider buying a few more if we dropped back below there.

I would certainly avoid buying any FJET. It has done nothing for shareholders except burn cash and sell more shares, and is going to report an operating pre-tax, pre-exceptionals loss of $47m on revenues of $53m for last year. There is a strong probability of eventual worthlessness. I know the recent RNS statements have dangled the prospect of future solvency, but it's still extraordinarily risky. If you've taken a life-changing loss on ABM and are now thinking about buying a few FJET, I'd recommend taking up a healthier form of gambling - the National Lottery, for example. As for ABM, there were reportedly ten bidders for parts of the company out of administration. A small number of the best bids are still in contention. I bought the shares when they were already priced as options, because I found it hard to believe that the entire company was worth less than the debt level of £51m. Looking forward to the final outcome before month-end, although I am likely to be proven wrong.

I'm still short at £62, holding this for the long-term. Price target c. £25-30.

FYI, two cash dividends have already been paid (LH took the scrip as did some other people, others took the cash). I'd much prefer to see smoking gun evidence which would help me to exit before it's too late than to see evidence-free statements like "Once this company collapses..". I fully acknowledge the risk of fraud here. I've read all the statements and I've seen all the flags. At a P/E of less than 1.5, perhaps 10% (or 20% if we are generous) of what a fair rating would be for it in the absence of fraud risk / China risk, I think that's fully priced in. If you invested in 5 situations like this, and only one of them turned out not to be a fraud which destroyed all associated value and provided a return of zero, then you would most likely get your money back. You'd make a strong return if that one company out of five went to a rating of 10x. All we need is for the company to avoid blowing up for another year or two and *continue* paying dividends and posting reasonable results, and it could start getting toward a still very conservative P/E of 3 - which would be a return of 100% from here. So it still looks very dangerous to be short unless you have the smoking gun evidence that it will prove completely worthless. By all means, show us the evidence.

"Scores of parties have registered their interest in salvaging the high street chain" http://www.thesundaytimes.co.uk/sto/business/Companies/article1396680.ece?CMP=OTH-gnws-standard-2014_04_06 (hardly a surprise, given that "vast swathes" of the stores remain profitable according to PwC)

"administrator PwC says there's been a lot of interest in the co., optimistic of concluding sale in April" - The Times Private equity buyers and H&T have started making proposals, according to the media over the weekend & this morning.

Get some clarity on your FX.

Shareholders are still entitled to know the outcome of the administration process. We can expect letters at some point when the process is complete. It could be any length of time. Maybe 6 or 12 months. If the administrators generate more value (through sale, liquidation, etc), than is owed to the banks and are needed to cover the costs of the process, then those amounts are owed to shareholders. We have been warned not expect any value, i.e. that even if there is a sale of the entire company, it will probably not be for an amount greater than the level of financial indebtedness (c. £51m). I bought the shares when they were already priced as options, because I thought that a valuation of £51m for the entire company (including, it must be said, lease liabilities the company no longer needs) was too low. I will probably be proven wrong. The outcome that could generate value for shareholders now would be if it turned out that, for example, EZCORP and other groups who were waiting to buy the company out of administration suddenly found that they were bidding against each other, and somebody ended up paying more than £51m. We have been told that such an outcome is unlikely/unrealistic. It's very sad to hear about the people who have lost a lot of money on this one. For me this was just one component of a portfolio, which I knew had a high probability of going to zero. If it didn't go to zero, it was probably worth several multiples of what I paid for it. I couldn't resist. My portfolio performance has taken a hit, but I still have a decent chance of outperforming the general market this year. I think in the future I would give greater weight to the tone of RNS statements and to the extent of lease liabilities, and allow a greater probability of literally everything going wrong for a company in distress. It's easy to say in hindsight, but I think I should have bought slightly fewer shares than I did, given the likelihood of a zero outcome. I don't regret buying a few to express my belief in what an appropriate valuation for the company would be. The company has a decent-sized pledge book and the administrators have told us that many different parts of the company and vast swathes of its stores are profitable - which is what I believed to be the case, and why I expected a decent bid for the company by now. I still think that the management team did the right thing by letting this go into administration when they didn't get a proper bid. The difference between now and then is that anybody who wants to make a bid now will be able to buy it from the agents of the creditors, instead of the agents of the shareholders.

The shares are already priced for fraud and massive value destruction. Being short is riskier than having a small long position IMHO.

The timetable doesn't exist anymore sam.

Tipped in seeking alpha today, people.

From the administrators: “The group expanded its branch portfolio in the period to early 2013 and ended up with too many underperforming outlets. It then explored a rights issue to raise funds, before attempting a solvent sales process. Together, these efforts lasted more than six months. Despite this history many different parts of the group, and large swathes of its shops, remain profitable. “Our priority is to keep all pledged items safe and available for redemption as normal. We plan to sell all or part of the business to protect as many jobs as possible and we have already paid, or will be paying all staff - including accrued bonuses - as normal in March. Also, all landlords have been paid. However, some redundancies may be necessary depending on the outcome of efforts to sell the business. Every branch will initially remain open as sale discussions progress. This also enables customers to continue to redeem their goods as normal as they pay off their loans. “The group and PwC are doing all that they can to support employees through this difficult time and will work with government agencies in order to support anyone affected by potential redundancies.” ----------- Analysis: "many different parts of the group, and large swathes of its shops, remain profitable" - we should expect bids for the business. It has been flagged by management that bids in excess of the level of financial indebtedness (£51m) are not to be expected. It remains to be seen how many stores need to be shut down, the costs associated with shutting them, the costs extracted by the administrators, etc.