Member Info for Simms45

just called my broker HSBC thinking that trading in HK would be not an issue but apparently it is. Very odd given they are based in HK but appears i would need to open a local bank account. I was wondering who people on this BB are using to continue to trade the shares in HK, assuming it happens of course. I think i read that AJ Bell offer a telephone services but ideally i would prefer online so not sure who else is one step ahead on this. thanks for any advice.

11.0p = simms45
11.5p
12.0p = RomeoTango
12.5p
13.0p = COYS1882
13.5p = Gdale1997
14.0p
14.5p = millsm
15.0p

but on entry to HKEX i think we might get a first day of trading at 15p :)

I am sure the BOD have feathered their nest with options and share awards when they relist and reality is you cant really buy in the sort of volumes they would want to buy at. For example looking at Level 2 if you wanted to buy 500k of shares in the market (£25k worth) you would take share price up to 6p unless new sellers entered the market to buy against. most BOD would want considerably more to make it worth their while. Liquidity is tiny and most with shares are probably tightly held. some, i would say smart investors, have been building a position buying amounts that match the current few sellers who for whatever reason are moving on, presumably some fund not able to move to HKEX or a few pis.
5.3 100,000 CFEP 08:18
5.5 100,000 JBER 08:47
5.5 100,000 WINS 07:53
5.6 100,000 PEEL 07:50
6 100,000 SCAP 07:57

Looks like today we are making some headway against the seller and the amount of stock for sale at 1p has dropped to 1.25m so only £12.5k to potentially clear this so will be interesting if we then see momentum breaking through all the 500k of shares at every point up to 1.1 where we have a MM offering shares. I have a sense that with some good news those shares for sale for will be removed or gobbled up quickly. We are due news either monday or tuesday that should be between positive to transformative and the clock is ticking to contractors moving onsite in October.

1 1,083,077 07:50
1 250,000 09:04
1.01 431,835 05:00
1.02 500,000 05:00
1.03 500,000 05:00
1.04 500,000 05:00
1.05 500,000 05:00
1.06 500,000 05:00
1.07 500,000 05:00
1.08 500,000 05:00
1.09 500,000 05:00
1.1 500,000 05:00

I think i will join you with a little extra before next week but holding some reserves back just on the off chance that if and when the move to HKEX is confirmed some investors, for whatever reason, decide to sell up. However judging by the volumes the last month it really looks to be maybe a handful of active buyers and a few sellers of any magnitude. probably most of the buyers exist on these bbs :) That really surprises me given the spectacular levels of turnover and expected profit found in the HKEX prospectus. They are off the scale. It is investments like this that you scratch your head with as they do not come around very often, especially in cleantech that is probably the most explosive sector in the stock market over the coming years as trillions of post covid govt money is poured into moving to carbon neutral economy. I guess news should come monday with the 10 working days scenario.

That is very interesting information dyresearch if that is what happens. Do you think that e-auction is happening now as presumably they need to have completed that process inorder to convince the HK exchange that they can meet the £50m valuation for CNEL and therefore allow CNEL to release the publication of their prospectus to the wider market. My assumption is that people involved in that bidding process are barred from buying on AIM as that would essentially be insider trading. However that must be very hard to control/police given the number of people that would be involved in that process. Or do you think HK exchange has a 3rd party who values the business and subject to that valuation a price is determined and relevant rights issue is announced. i am just not sure of the process and this latter approach to me seems plausible?

If the July results come in showing they both continued to trim costs and increase sales through their partnerships and from reduction in competition (Leesa/Casper) and got to a small net profit in the final quarter of this year then i would conservatively hope they would look towards a £1-£2m profit in 2020/2021. if that is achieved and Eve got a conservative PE of 10 then the market cap should be between £10m-£20m with no hope value thrown in or the £8m cash balance we have. Therefore from a current £4m market cap we could see between 2.5x and 5x return over next 12 months. However there are plenty of caveats but i think subject to that order of profitability and some steer that Eve was showing solid and consistent sales then i think that is possible. The recent RNS strains itself to allude to "Good May" and take that with as you may. I am on the optimistic side but you just sense there are so many factors all pulling in the right direction at the same time. Really Emma and Simba are the key competition and Eve narrowly did not merge with Simba but there is still probably room for consolidation as they are all basically selling the same thing and merging two together drops out an awfully large amount of management costs. I am still keen to hear where Eve are falling short. Taking partnerships will eat into margins for those sales but will lower marketing costs and assuming they grow the partnerships well and have a strong brand then they should do well from that.

Given the scramble for the heavily discounted shares at 5p that will be admitted for trading on the 13th July how many of those £20m shares will end up being sold on the 13th July, if existing holders who got into the right issues have not already sold out ahead of this? I have personally been on the receiving end of many rights issues and from experience the share will probably head to 5p. Would be happy to be wrong but experience says otherwise and then the bigger issue is the remaining overhang that could keep the share pinned at 5p until those shares are absorbed into long term holders. This happens particularly where shares are sold to retail investors or institutions that are not long term holders. Just my experience and hope that is not the case here but a warning for some.

i like the thinking :) Not quite sure how you got from £500 @ 1.5p to £32,000 at 5p but hey ho. My question in the quiz is do CNEL decide to raise A > £25m at 5p B> 12.5m at 7.5p, C £5m at 10p or D nothing at all and go for 11p :) phone a friend or 50/50 :)

As someone pointed out some funds invested might have to sell if CNEL moved to HK because their mandate is to only hold UK listed companies. Also those with very small holdings probably would sell in advance. I hope CNEL will actively manage the move and stabilise the market if that is needed. I was looking for other companies who had done the same thing but could not find any examples. does anyone know of any companies who have moved from the LSE/AIM to HK?

Millsm hats off to getting to page 267 of the HK prospectus. i equally liked this paragraph :

"Our revenue and profit for the two months ended 29 February 2020 increased significantly as
compared with the corresponding period in 2019. Such increase was mainly due to the increase in the
contract value of our backlog from RMB329.6 million as at 31 December 2018 to RMB584.9 million as
at 31 December 2019."

As far as i can see you can buy 2.25m shares at 1p and probably get closer to mid market with some limit order or if you online service or broker can offer fixed prices. Yesterday when that block of 750k was bought and the ASK nudged up to 1.01 it was quickly replaced with a 750k at 1 again. We just need more firepower to clear the seller as the MMs are way up at 1.1p with very small blocks to sell. Its a great opportunity to load up before buys will raise the price quickly. Once this seller is out of the way we should start to see a more fairly balanced share price based on sentiment

1 1,483,077 12:02
1 750,000 12:02
1.01 431,835 12:02
1.02 500,000 12:02
1.03 500,000 12:02
1.04 500,000 12:02
1.05 500,000 12:02
1.06 500,000 12:02
1.07 500,000 12:02
1.08 500,000 12:02
1.09 500,000 12:02

That is a nice looking order book. Do not see any RNS relating to these given they are all under a letter of intent and quite relevant to the prospects of CNEL. If we made £6.8m net profit last year we can expect that to increase in 2020 results.

This is also a good point and funds normally hold decent sized stakes. what CNEL do not want is a large dump of shares landing on the exchange next week. i just feel CNEL need to have a strategy so they do not clutch defeat from the jaws of success.

Has anyone wondered why someone has been selling for a value of £5005 on a regular basis. Saw sometime ago and now seeing a lot more of this seller. I dont think its a coincidence.

Yes i agree rights issue should be relatively small as i agree BOD are largely doing this to boost their personal fortunes and get a proper valuation on an exchange where having “china” in the name is not a disadvantage. Therefore it just looks like arbitrage traders will pile in on the news and push the price in the UK up to HK price. Seems odd today as trading is so limited with possibility to probably double your investment in less than a month. Always held view that if it looks too good to be true it normally is but good to ask the questions as not long ago this was trading at 2.5p, although pre huge profit increase. That £26m cash pile needs to go somewhere so i wonder also if they might do a maiden dividend to sweeten the proposition and perhaps offer HK something else.

If we assume the prospectus is equivalent to 10p + some small fund raising and the price in the UK is still 5.5p then there is a quandry for potential investors and for the BOD selling the prospectus to investors. From the BODs point of view they would surely prefer to see the UK price rise to 10p prior to publication to remove that complication. if they release the prospectus then i am guessing investors would pile into the UK up to the prospectus price so that might happen but its quite a messy solution. CNEL with a tiny amount of its £26m cash balance could easily buy up the stock now and push the share higher when they know the move is happening and keep the arbitrage for the benefit of the company and shareholders. Be interesting to see how this squares as while anyone and their dog can see CNEL should be worth £75m sadly the market says its worth £24m today. With probably 5 business days before further details are released its surprisingly calm on this side of the world. What if they raise £25m at 5p a share and dilute UK investors but still reach the £50m market cap?

Its a game of last man standing but Leesa was US based and wrote a business expansion plan forgetting every competitor is doing the same and largely selling the same lump of foam with some marketing. Mattress selling is about brand. households will still be replacing mattresses as far as i can see and Eve Sleep is as good, if not better than the brand led sleep brands. its recognised alongside Simba. the other brands you find will simply all fight on price. Eve and Simba can fight on brand but with less competitors there is more sales to share around and less noise. Also reduced marketing costs. People will buy new mattresses and the hybrid mattress from Eve is making inroads.

It is often helpful that any new relevant news from our key competitors are shared to keep an eye on the mattress sector in general. the lawsuit against Casper however is probably slightly less useful now they are no longer a competitor and this is US based so not affecting UK and we are not in the US.

However i am bullish on Eve Sleep because it is exactly these competitors that are retreating and mattress demand according to competitors was up

https://www.thetimes.co.uk/article/online-mattress-market-wakes-up-during-lockdown-75dlpwwp2

Now you could argue that they could be sales pinched from Eve Sleep or you could accept that the lockdown has had a positive impact on mattress sales generally (i hope you agree the latter). If Eve Sleep technically broke even in Q4 as per RNS and sales have increased and costs have continued to be tightened then if you extrapolate that to say Q1 was breakeven and Q2 maybe dare i say a little profit then you start to build a picture that might become clearer. Just dyor and add some “reading between the lines” on what means a “good may” and you might see confirmation come July :)

With their hybrid mattress selling well and recent best buy for heat dissipation these are the sort of things that continue to add cumulatively, not to mention nearly £1m in advertising credits with ITV. All new CEOs want to take full credit for any turnaround so lets just say July is her rallying cry to a transformation. and did anyone remind us we have £7.5m in the bank and cashburn nearly negligible and a total market capitalisation of 50% of that at sub £4m! I think its wakey wakey time :)

i am definitely sensing that someone who was part of the recent rights issue is offloading stock at the rights issue price and probably keeping the warrants for free. We have seen very strong buying recently and normally that would have started momentum but the share price is wedged at the rights issue price. it is not bad thing if people want to load up on shares on the same basis as the BOD but i guess before next news it would be good that the shares in circulation find a long term holder and shame MC was not doing due diligence on the buyers to make sure they were the right sort of investor. I might be wrong but if correct hopefully that overhang will be gobbled up in due course. it would be good in the next week to really provide some news update to try and break that rights issue price as we should be far above it given the clock is ticking down and each day that passes brings us closer to key decisions. i sense a RNS shortly.