Thursday, August 14, 2008

Listed Companies Investments: Yung Kong Galvanised Steel

I have always felt uneasy seeing our local listed companies dabbling with their excess money. Sometimes they invest in the share market and sometimes they just invest! And one of the most disturbing issue is that there is ZERO transparency!

Most of the time, the companies do not let their shareholder knows the details of their so-called investment.

For example, we do NOT even know if it were investments in quoted shares and if it was, what shares did they buy, at what price was the investment made and most important, why!

Talk is cheap. Here's an example. Yung Kong Galvanised.

Let's go way back in time. 1999.

Quarterly rpt on consolidated results for the financial period ended 30/9/1999

If you open up the Balance Sheet notes, you find the following:


As you can see the results is not very good at all. Total investments at cost is at 23.600 million and total market value back then in 1999 was 15.660 million. A 'paper' loss of 7.94 million.

Besides that, remember the transparency issue mentioned above? Does the investor or minority shareholder what are these 'investments'?

Giving a lump sump total and the market value as above is simply not cutting it in my opinion.

The investor does not even know what Yung Kong had invested in!

And the below snapshot was taken of its balance sheet then.


Compare its cash versus its short term borrowings of 2.925 million cash versus 29.928 million borrowings. Surely one would question why was Yung Kong making these investments?

If it has the extra cash, isn't it better to pay off its loans?

Don't tell me it's ok to borrow to 'invest'?

Duh!!!!!!!!!!!!!

Ok that was back in 1999. Now it's 2008. Here is the link to Yung Kong's latest quarterly earning.

Quarterly rpt on consolidated results for the financial period ended 30/6/2008

Now Yung Kong still dabbles in the market.

Considering the fact that our market HAD ENJOYED one incredible stock rally recently, surely one would have assumed that Yung Kong would have enjoyed a much better luck with their UNKNOWN investments.

However, it would appears that life is simply unkind to them!

And here comes an even more horror show from Yung Kong!!



Total investments at cost is now at 42.200 million!!!!!!!!!!!!

Looks like they dabbled MORE into more investments.

And look at the end result.

Market value at end of reporting period is only 19.410 million! Which means the company is now carrying a 'paper' loss of 22.79 million!!!!!!!!!!!

So from 1999 to 2008, despite witnessing one incredible bull run, Yung Kong's unknown investment paper loss has increased from 7.94 million to a whopping 22.79 million!

Holy cow!

How?

Firstly, don't you think that Yung Kong should give up its so-called unknown investments?

Secondly, don't you think there should be more transparency here and that it's only right that Yung Kong disclose exact information on their investments?

How now my dearest MooMooCow?

5 comments:

Remnant 613 said...

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zulfazli said...

hi, i subscribe to your blogs via the rss feed but i only get a few lines from your blog.i think there is some settings which you have disabled.i would very much appreciate it if you publish full articles like fellow bloggers dali, seng, or boon.thanks =>

Moola said...

Dear zulfazli,

I am not too well verse with what's happening with these feeds and most rss feeds that I subscribe to personally do not send out the full article and what is broadcast is the first few lines of the article.

Anyway, currently the rss feeds available are via yahoo, google and feedburner. Do let me know which feed is giving you a problem.

I will have a look into it but I cannot guarantee you anything.

Ok?

-----------------

Dear remnant 613,

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rgds

kaseboy87 said...
This comment has been removed by the author.
kaseboy87 said...

i did a little digging and found this:
there are 3 main tabs on your blog homepage, "postings", "settings" and "layout".You have to go to "settings",then click on "site feed", and then select "full" in "allow blog feeds". =>