Excellent post by FifthA advfnboard6 Jun 2010 21:25
This was posted by somone (FifthA advfn board): This is by FifthsA: I work in the market, so I have been able this week to have a meeting with David Wong. I hope that by posting the main points it raises the level of debate on this board as there is a disappointing amount of poor quality postings and immature drivel (you know who you are). DYOR but this is my view.
1. David Wong is one of the most reputable businessmen I have met. When he felt he let investors down in 2006 (unexpectedly high freight costs dented profits) he waived his dividend entitlement. Last year, he and the COO paid themselves no bonus, although every other employee got one. He and his management team are staying at a Novotel in London as it is company money. He took the train from Heathrow, not a cab. I could go on.
2. The company’s auditors are KPMG.
3. The property valuations will be carried out by Jones Lang Lasalle.
4. The reason why the first property acquisition is a Wong interest is because it takes years to develop property, and he wants to show the market as soon as possible that there is money to be made and he knows how to do it. The site is in the equivalent of Regent street in one of China's largest cities, and therefore took years to assemble and develop. Wong believes that the residential element will sell out in a week when it markets in September.
5. There will be no more related party transactions. There will clearly be other deals, but on a specialist basis - this isn't a case of just piling in.
6. Although management say that they are here to explain the strategy to shareholders and they are not frustrated by the share price (they’ve seen worse, after all), it was clear to me that management will buy in shares aggressively at anything like current levels to close the gap with the stated NAV of 280p.
7. He has already turned down an offer for the holding in ACC for $100m. A higher value would obviously boost NAV further.
8. I was wrong in my previous thinking on Liaoning. It was not a put. The vendor didn’t want to be a minority to TCC, as simple as that, and as PMHL was the only one buyer it was bought cheaply. With cement plants trading at an EV of $70m per tonne of productive capacity, the plant is worth perhaps $140m, or £90m. PMHL’s stake is therefore worth £20-25m, so a good deal, but not as valuable as some have suggested. Wong is not a long term holder, I would say.
Personally I don't expect a special dividend. I think the plan is to increase NAV, and that's best done by buying in shares at a discount.
When the buy-back comes the share price is going to move to a much, much smaller discount to the NAV. I was here just for this move, but having met Wong I will stay in.
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