Member Info for KiwiBoy

Yep the low liquidity is probably the main cause. Hopefully when all the SEA shareholders get AGP script as part of the restructure this will improve the liquidity and result in a more sensible spread. The company will, from memory go from 2% not held by the main shareholder up to about 23%. If these new shareholders have an equal trading tendency as existing AGP shareholders liquidity should go up 10x. The short-term downside is that some new SEA shareholders may wish to exist their new AGP holding creating some selling pressure.

Well Infinityt's post of 27 April has to be one of the best predictions ever. "20p, 40p let us see". After a couple of hours ex dividend trading both price points have been achieved!!!

I'm actually quite happy with the loss of the "best" assets. They have been transferred out at fair value. It would have been comparatively easy to justify a small (5-10%) discount to NTA and this didn't occur. Also it would have been very easy to ignore the hotels fair value was well above the book value. This didn't occur instead the hotel was revalued to fair value and no NTA discount was applied. This is extremely fair to the minority shareholders giving me confidence that the Chinese brothers are being fair and trying to tidy-up an odd situation rather than pull a swift one. That said I'm still expecting a big discount to NTA post restructure - a sufficiently large discount as to create a good buying opportunity.

3 April RNS not 3 March

The following is a summarized balance sheet post reorganization (taken from the 3 March announcement) expressed as a per share value - noting there is about 10HK dollars to the pound. China investment properties HKD2.20 / share Other term assets HKD0.06 / Share (a little bit of PP&E) Bank deposits HKD1.97 / share Receivables HKD0.59 / share Completed properties HKD0.48 / share Various current liabilities -HKD0.25 / share Net assets HKD5.06 / share So the restructured company will have about 20p/share in cash bank deposits another 22p of term investment properties. Unsure of the quality of the receivables and completed properties current assets. IMO a lot of the risk is taken out as the current share price only requires a circa 50% discount to NTA after the special dividend - hence DanBrown83's noted 25p-35p guesstimated price range. The lower end of this should be possible as its only fractionally above the underlying cash assets.

Infinityt you are correct - I should have said significantly reduced pile of cash. It was HK$9,778.9m (£1,021.7m) at 31 December 2016 as per the annual report but with some offsetting liabilities. the Pro forma accounts indicate a revised value of HK$1,749.8m after the restructure and dividends. Still strongly cash positive rather than in a net debt position which is common in property companies in NZ (and probably in other locations).

My understanding is that the warning is for the current non-SEA shareholders in AGP (the shareholders in SEA don't directly own AGP shares unless the proposal goes through). The AGP board received a proposal from the major shareholder and needs to provide advice to the minority shareholders - standard takeover/restructuring rules. The board need to prepare an evaluation document for minority shareholders which will consider issues like whether the assets being paid instead of a cash dividend is a fair alternative. It looks to be (but may not have been if they tried to push the proposal through at BV not fair value for the HK Hotel). The document will almost certainly note that if the proposal isn't accepted, the share price is likely to revert to pre-offer levels. The specific tone of the letter could just reflect the legalistic nature of the lawyer who wrote the notice as its a CYA notice. It may also reflect an expectation of the AGP board that the share price should shift to only a small discount to NTA as new buyers get both a residual share with circa £0.48 of net assets and a £1.06 dividend. The share price increased but hasn't yet got to this level. It may also factually reflect that the post-reorganisation structure is quite a different company to the current one (no pile of cash, no hotel in HK and no London office building) but IMO the £1.06 and improved liquidity is a no-brainer trade-off.

Not sure there is a share reduction. My reading was that NLI is the major shareholder in SEA. When SEA distributes its shareholding in AGP down to its shareholders, NLI will then own 562,860,412 shares in AGP and be the main shareholder. The same shares remain on issue but there is a big reshuffle in who owns them.

Yep, I'm reading it the same way. The SEA shareholding is passed down to the next layer of shareholders which will materially improve liquidity making the free float >20%. There is the £1.06 dividend coming in about a month. What's left is all the China assets that according to the 3rd paragraph of note 7 in the notice have a NTA of about £428. This is part cash and part property assets. With 886m shares on issue this is a residual NTA of £0.48 Some moderate to large discount would be appropriate but even a 50% discount puts the fair value at 1.06+.24= £1.30

IMO its at worst neutral and probably a good purchase. There are two ways that AGP can maintain the huge discount between NTA and its share price - make heavily value destroying purchases and never resolve the ownership structure. This shouldn't be a value destroying purchase. Noting the purchase was in the country of its stock exchange listing it could be part of a master-plan to resolve liquidity issues.

AGP released their 6mth result late Friday 19 Aug. This included the following comment about its net cash position: “As at 30 June 2016, after netting off bank borrowings of HK$1,459.4 million (£139.6 million), the Group had a net cash position of HK$8,586.2 million (£821.2 million), compared to a net debt position of HK$342.3 million (£29.8 million) with gearing ratio of 2.3% as at 31 December 2015.” So with 886m shares on issue the net cash position is 93p per share. AGP also has some other property assets. The exchange rates have also assisted pounds based values to be larger - The annual report exchange rates are: For 30 June 2016: £1 = HK$10.4562 For 31 December 2015: £1 = HK$11.4841 For 30 June 2015: £1 = HK$12.1357 For the Company's shareholders' information, the exchange rate on 18 August 2016 was £1 = HK$10.1975

So this companies assets are predominately Asian assets, especially HKD cash. The Pound falls against all currencies so foreign assets are theoretically more valuable when converted back into Pounds. The Market Makers response is to lower the buy and sell quotes - go figure

Didn't the share go ex-dividend on Thursday which was why the large drop occurred. Yesterday it went Ex a 17p dividend but only fell 10p meaning it was actually up not down. Earlier in this thread there appears to have been confusion between the ex date and the record date. My understanding was that you needed to buy by Wednesday for the transfer to be completed in time for you to be on the Share register as at the end of Friday. If you buy after the ex-date but before the record date you don't get the dividend.

As at balance date of 31 Dec 2015 NTA increased to £1.39 (HKD16.0) which was based on an exchange rate of 11.484. The post-balance date sale of Dah Sing Financial Centre will yield a profit of approx. £65m or 7p per share. The exchange rate is about 11.16 now increasing the balance date NTA by a further 4p. This makes the current NTA adjusted for new events £1.50 Now AGP are paying a dividend (finally) all that's left to do is figure out a solution to the low liquidity and the gap between the share price and NTA should narrow to that of a normal property company.

And then there's the positive exchange rate impacts. The Hong Kong dollar is basically tied to the USD. Over the last year the pound has weakened against the USD meaning that the foreign assets of Asian Growth properties are worth more pounds. The last accounts were based on a 12.07 conversion factor but this is now about 11.0 meaning that last years NTA is revised upwards from 1.23 to 1.35 before the substantial favourable property revaluations.