Friday, April 26, 2013

Do You Want More China Based Companies To Be Listed Here?

Saw the link to the article on Star Business: Kanger set to be 10th China-based company to list on the local bourse

I did not even want to read about it.

First thing on my mind was 10th!

Do we really need all these Chinese companies to be listed in our stock exchange?

Come on Bursa!

Stop thinking like a commission based  salesman! These companies are stinking our stock exchange! Come on. You can't smell it? You guys complain about the lack of retail investors all the time and here you are, inviting all these China based companies to be listed here.

You just don't get it, yes?

More quantity is not going to increase retail investing participation.

QUALITY is the only word that is important.

What is stock investing?

Stock investing is investing in good quality businesses at a good price.

Investors don't want to invest in all these poor quality companies only to find the value of their investment shrink like hell after a few months!

Here's proof.

The three most recent listed Chinese stocks.

China Automobile Parts Holdings Limited
IPO Price: 68 sen
Listed 30/1/2013
Current Price: 36 sen

China Stationery Limited
IPO Price: 95 sen
Listed: 24/2/2012
Current Price: 34 sen

Maxwell International Holdings Bhd
IPO Price: 54 sen
Listed: 6/1/2011
Current Price: 31 sen

Compare the current share price as of this morning versus the IPO price of these 3 China based stocks. All IPO investors of these Chinese stocks would be cursing at the stock performance as of today.

The following table shows the current price versus the IPO price and the % change of all Chinese listed companies.

On average, investors of these Chinese stocks are starring at an average loss of 63% since listing!!!!


Bursa Malaysia, are you aware of this stat?

If so, why?

Why are you pushing for another Chinese stock to be listed on our stock exchange?

Do you care for the quality of the stock exchange?

Or do you just list such companies hoping just for more revenue for the exchange????

Here are the charts showing the performance of all these Chinese stocks since listing.

Chinese Automobile Parts (CAP)

China Ouhua Winery Holdings Ltd (CNOUHUA)

 China Stationery Limited (CSL)

HB Global Limited (HBGLOB) (Old name: Sozo Global)

K-Star Sports Limited (KSTAR)

Maxwell International Holdings Bhd (Maxwell)

Multi Sports Holdings Limited (MSPORTS)

XiDeLang Holdings Limited (XDL)

Xinquan International Sports Holdings Limited (XINQUAN)


limko said...

Looking at the performance of China counters vis-a-vis their financial indicators, I have to throw out all that I learned in Finance and investment classes.

Or a different set of valuation yardsticks is required?

Maybe I am too dumb!

Moolah said...

Limko: I don't think you should use financial indicators.

Common sense perhaps.

Consider the disposal of shares by the shareholders last month.

As mentioned briefly in a post here, the disposals of shares was at 60 sen. CSL IPOed at 95 sen. Make sense?

And to make financial indicators go bonkers, the disposal of shares were cheaper than the CASH PER SHARE the company said it was holding.

What gives?

Either the owners have ZERO understanding of CASH PER SHARE or perhaps we can say the CASH PER SHARE sum is in doubt!!!!