Nothing to worry about18 Apr 2021 07:35
Share holders shouldn’t have anything to worry as the company figures and progress is in a very good state, they are making substantial profits and orders are very strong. At the end of the day the suspension was due to the auditors doing their job which is asking why millions were spent for no value to share holders and have asked for a detailed explanation from the BOD. If anything it clarifies to the senior management (and major shareholders) they are accountable to every shareholder not just themselves. Concerns are raised because the IPO share price tanked and they want to know why after they paid consultants to deliver the opposite. I see several major issues.
Massive sell of on the first day of HK trading
Lack of any communication through the year
Genuine share price not achieved based on performance
Millions spent on consultants
The auditors want answers from the company as they are accountable to the exchange and share holders. So they have been asked to explain and fix the problem as the company management does not deliver value to its holders. If the major shareholders (BOD) want to run it for themselves they should buy back all the shares and take it private, if not they are accountable to everyone.
Several outcomes could arise.
Company goes private, they’d have to buy up all remaining shares, they’d have to make an offer above the IPO as they valued the company at that value only a year ago.
The investigation fines the BOD and consultants for miss conduct in spending share holders money. Starts trading again and they learn a valuable lesson about being accountable.
Third party looks to do a takeover and makes an offer which again would need to be fair and realistic. Would be at the IPO price range as a minimum.
Bottom line is for all the above is that in open trading as soon as a few buys come in the price leaps in value very very quickly so no one can get many shares with out the price jumping up very quickly. The problem is trust at the moment in the BOD updating shareholders to sustain a long term investment base from PIs or institutions. I think this will be picked up by the audit and the BOD will be told to act correctly moving forward. I can only see the SP moving upwards as profits and revenue are so strong.
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