IOI Wants Your Money Again By Relisting Its Property Arm!

On Star Biz: IOI mulls relisting of arm

• Monday February 13, 2012
  IOI mulls relisting of arm
  By RISEN JAYASEELEN and DANIEL KHOO
  
  PETALING JAYA: IOI Corp Bhd is mulling a relisting of its property arm that would see the group unlock values in that segment and enhance the attractiveness of the parent company to investors as a more plantation-focused company, according to reliable sources.
  
  “The group is in discussion with two investment banks on this to get feedback, especially on the right timing of the exercise,” said a source.
  
  Analysts said the relisting of its property division would increase the stature of IOI Corp as a pure plantation play which would likely have higher valuations.
  
  “It will reduce the conglomerate discount and transform IOI Corp into a pure plantation play, with a controlling stake in a valuable property company IOI Properties. Sole industry companies usually tend to fetch higher valuations,” an analyst with a local bank-backed research house said.
  
  IOI Corp may wish to also time the relisting of its property arm in line with a more bullish view on the property sector.
  
  In a sales note to its clients issued in January, Maybank IB said that potential downsides had already been priced into the property sector and that it did not discount the possibility of raising its call on the property sector from “neutral” to “overweight” in the medium to longer term as developers today were “backed by considerable unbilled sales, providing near-term earnings visibility.”
  
  IOI Corp had privatised its arm in 2009. Then known as IOI Properties Bhd, IOI Corp had on Februuary 2009 launched a takeover offer at RM2.60 per share.
  
  The takeover was successful and IOI Properties was subsequently delisted on April 28, 2009. It is today wholly-owned by IOI Corp. IOI Corp has been actively growing its property business since.
  
  In January it acquired six acres of land in Singapore for RM995.5mil to build high-end condominums and will have to settle the entire amount to the government of Singapore within 90 days from the date of the tender acceptance letter.
  
  Presently, it has seven projects which it is developing locally with estimated gross development values (GDVs) of almost RM20bil.
  
  Properties can testify to its track record in building property projects that have sold well. Excluding the latest land buy in Singapore, it is also presently developing high-end projects in the southern neighbouring island state with GDVs close to RM6bil.
  
  IOI Properties has completed property development projects in Puchong, Putrajaya, southern Johor and Singapore before.
  
  Meanwhile, banking sources also said that IOI Corp was in talks with banks to raise more funds.
  
  “It is in a good position to do so, considering its huge cash flows from its plantation side of the business,” said one banker.
  
  The funds raised should give IOI Corp sufficient funds to not only pay for the Singapore land acquisition but also ready funds in the event it chooses to buy more assets such as plantation land.
  
  Based on its results for the first quarter ended Sept 30, 2011, IOI Corp had total short and long-term borrowings of RM688.24mil and RM4.87bil respectively. Most of these debts are denominated in the US dollar, the Singapore dollar and the yen.
  
  IOI Corp had cash and cash equivalents of RM3.22bil as at Sept 30, 2011.

Seriously?

Seriously?

You seriously cannot be kidding!!!

For those who 'forgot', do read how IOI Corp treated their minority shareholders of IOI Properties when they took IOI Properties private at a shockingly low price and worst of all, the privatisation was made one year after IOI Properties had completed a rights issue!

( In my humble and flawed view, this was the WORST privatisation done in KLSE history! )

Do read past postings:

• Minority Shareholders Of IOI Properties Are Screwed!

• IOI Properties?

• IOI Properties Minority Shareholders: You Do NOT have to SELL!

• On IOI Properties Privatisation Again

One More Question For Europlus

Blogged last week: That 7 Billion Highway Project!!!

Now there was one rather interesting news clip regarding Kumpulan Europlus published on the EdgeMalaysia.com on the 6th Jan 2012.

http://www.theedgemalaysia.com/business-news/198946-kumpulan-euros-6m-shares-done-off-mkt-at-97-below-regular-trade.html

• Kumpulan Euro's 6m shares done off-mkt at 9.7% below regular trade.
  Written by Joseph Chin of theedgemalaysia.com
  Friday, 06 January 2012 15:02
  
  KUALA LUMPUR (Jan 6): KUMPULAN EUROPLUS BHD [] saw 6.0 million of its shares transacted in an off-market deal at an average price of RM1.11 on Friday.
  
  Stock market data showed the shares, which were crossed at RM1.11 each, were 9.7% below its regular market trade of RM1.23.
  
  The 6.0 million shares accounted for just 1.15% of the paid-up of 520.99 million shares.

So 6 Million shares were transacted in an off-market deal at an average price of RM1.11.

What was interesting was this deal was done 20 days before it was announced that KEuro won that amazing 7 Billion Highway Project!!!

Here's a news clip of the project award on 26th Jan 2012.

http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=200012&Itemid=79

Well, I am just curious.... who is the buyer of these 6 million shares at an average price of rm1.11?

Keuro last traded at 1.31.

MRCB Net Profit Rises to RM91.9M???

On Business Times this morning:

• MRCB net profit rises to RM91.9m
  
  Published: 2012/02/09
  
  KUALA LUMPUR: Malaysian Resources Corporation Bhd's (MRCB) net profit for the year ended December 31 2011 rose to RM91.92 million from RM73.79 million recorded previously.
  
  Group revenue edged up to RM1.21 billion from RM1.07 billion a year ago.
  
  MRCB said the improved performance was due to higher contribution from its ongoing and encouraging strata office sales of property development projects at Kuala Lumpur Sentral.
  
  The group recorded a slightly lower net profit of RM31.95 million in the fourth quarter compared with RM39.2 million previously.
  
  The lower profit was due mainly to recognition of full cost for variation order claims of which recovery of the same is pending clients' approval.
  
  Group net asset per share increased to 98.1 sen as at December 31 last year from 93 sen recorded as at end-2010.
  
  MRCB chief executive officer Datuk Mohamed Razeek Hussain said the group expects to deliver another year of revenue growth in 2012. This will be driven by ongoing property development projects in Kuala Lumpur Sentral, outstanding construction order book and the opening of the Eastern Dispersal Link Expressway (EDL).
  
  "However, given the intense competition within the construction industry and the anticipated start-up losses from the EDL, the board expects the profitability growth for the group to be challenging," he said in a statement yesterday.

All sounds so rosy except for that statement highlighted in red...

• The group recorded a slightly lower net profit of RM31.95 million in the fourth quarter compared with RM39.2 million previously.

rm 31.95 million compared with rm 39.2 million equals to 'SLIGHTLY LOWER'??

!!!

Here's the VERSION from the EdgeMalaysia... which is rather ......

• MRCB 4Q earnings down 37% to RM26.1m from RM41.50m yr ago
  Written by Joseph Chin of theedgemalaysia.com
  Wednesday, 08 February 2012 18:55
  
  KUALA LUMPUR (Feb 8): MALAYSIAN RESOURCES CORP []oration Bhd’s (MRCB) net profit fell 37% to RM26.11 million in the fourth quarter ended Dec 31, 2011 (4Q 2011) from RM41.50 million a year ago.
  
  It said on Wednesday the group recorded a slightly lower profit before taxation amounting to RM42.5 million for 4Q 2011 compared to RM49.3 million in 4Q 2010.
  
  “The lower profit reported was due to recognition of full cost for variation order claims of which recovery of the same are pending clients’ approval,” it said.
  
  Its revenue rose 8.6% to RM470.38 million from RM433.12 million. Its earnings per share were 1.88 sen compared with 3.01 sen. It proposed dividend of 2.0 sen a share compared with 1.50 sen a year ago.
  
  For the financial year ended Dec 31, 2011, its net profit rose 15.1% to RM77.46 million from RM67.27 million. Its revenue increased by 13.6% to RM1.213 billion from RM1.067 billion.
  
  “The improved performance in revenue and profitability in the current financial year was due to higher contribution from the group’s on-going and encouraging strata offices sales from property development projects at Kuala Lumpur Sentral.
  
  “However, this was offset by lower revenue from the infrastructure and environmental segment due to completion of existing environmental projects,” it said.
  
  On the outlook for 2012, MRCB expected to deliver another year of revenue growth, driven by on-going property development projects in Kuala Lumpur Sentral, outstanding CONSTRUCTION [] order book and the opening of the Eastern Dispersal Link Expressway (EDL).
  
  “However, given the intense competition within the construction industry and the anticipated start up losses from the EDL, the board expects the profitability growth for the group to be challenging,” it said.

Shall we say... dare to be different!!?

Well for what it's worth, here's the numbers highlighted by Dow Jones Newswire...

That 7 Billion Highway Project!!!

On 28th Jan 2012, the following article was published on Star Biz.

• Saturday January 28, 2012
  Europlus’ RM7bil concession needs answers
  A QUESTION OF BUSINESS By P. GUNASEGARAM
  
  At a time when many concessions are near expiry, a 60-year toll-road one perplexes
  
  A CONCESSION for 60 years may well be a record for Malaysia and the only thing that comes to mind, which is longer than that is Malaysia's agreement to supply water to Singapore for hundred years signed in the sixties when the latter moved out of Malaysia.
  
  Even for the North-South Expressway, the original concession period was half of that at 30 years while its length was more than twice that of the proposed West Coast Expressway at over 770km.
  
  Not only is the concession extremely long, it is also very expensive with a development cost before land acquisition estimated at a whopping RM7.07bn for 316 kms from Banting, Selangor to Taiping, Perak out which 224km or some 70% will be tolled.
  
  Kumpulan Europlus Bhd (KEuro), a long-ailing public-listed company that had been involved in property projects especially housing, which had been mired in problems, announced that the concession was obtained by its 64.2% owned West Coast Expressway Sdn Bhd (WCE).
  
  The project, KEuro said, received an approval letter from the Public Private Partnership unit of the Prime Minister's Department but it does not appear that a government announcement has been made so far.
  
  KEuro, which is majority owned by entrepreneur Tan Sri Chan Ah Chye and another listed company IJM Corporation Bhd, said the project will be on a build, operate and transfer basis but it is clear that with a 60-year concession, many of us, including the project promulgators won't be around when the time for transfer arrives.
  
  Apart from the long concession period, there are other features which make it very attractive to WCE, including assistance from the government with a support loan of RM2.24bil starting from 2013 with an interest rate of 4% a year.
  
  Over and above this, there is an interest subsidy of up to 3% from commercial loans for 22 years. Both interest rate subsidies alone could be worth up to some RM4bil over the period, assuming a principal of RM6bil jand depending on how the principal is repaid.
  
  Meantime, the land acquisition cost of an estimated RM980 million will also be borne by the government. But any toll revenue over an agreed traffic volume will be shared 70:30 with the government getting the lion's share. However, on full settlement of the loan, WCE will get 70% instead.
  
  On almost every count, it looks like WCE has got itself a damn good deal. An examination of the deal based on earlier estimated construction costs and international costs again shows it to be favourable.
  
  Curiously, KEuro had announced in May 2007 that WCE had obtained approval for the same concession but on much less favourable terms, raising questions as to why the deal appears to be so much better now.
  
  At that time, it involved 216km and linked the same two towns, Banting in Selangor and Taiping in Perak, the main difference apparently being there was no construction of some 90-100km of non-tolled roads which there is now.
  
  But still, the overall development cost estimated then was substantially lower at RM3.02bil and the concession period was less by almost a half but still very long at 33 years.
  
  Comparing costs per km, it was substantially lower in the 2007 deal at RM13.9mil per km compared to RM22.3mil for the deal just announced. Over the last four years, WCE has been renegotiating the deal with the government and this seems to be the final outcome.
  
  While the cost of construction of expressways differs tremendously among different countries and terrain as well as the type and quality of expressway, a 60% increase in costs over four years for essentially the same area and terrain seems way too much.
  
  International comparisons are difficult because of different costs. India has a programme to build 1,000km of expressways for RS16,680 crores which works out to about RM10bil at current exchange rates. This translates to about RM10mil per km, less than half the figure for the West Coast Expressway.
  
  Considering that roads are expensive and the public is already burdened by an extensive system of tolls, the government should be rather circumspect about granting toll road concessions, especially one for the hitherto unheard period of 60 years.
  
  Before one can make a final judgement of whether this deal is fair, more details need to be released. The current and expected traffic on the highway has to be projected, the cost of construction established and a proper rate of return established so that a net value can be ascribed to the project.
  
  To get the best deal for itself and for the rakyat, the government should have been transparent over the process and invited all qualified parties to bid to keep project cost, tolls and the concession period as low as possible.
  
  It is still not too late to do that.
  
  Independent consultant and writer P Gunasegaram (t.p.guna@gmail.com) hopes against hope for transparency, open tenders and proper evaluation to save public money.

The issues raised were serious and TI-M was quick to express its concerns over the lack of transparency. The following was posted on the EdgeMalaysia on 30th Jan 2012.

• TI-Malaysia: Explain awarding of RM7.07 bn West Coast Expressway project Written by Joseph Chin of theedgemalaysia.com
  Monday, 30 January 2012 18:36
  
  KUALA LUMPUR (Jan 30): Transparency International Malaysia (TI-M) has expressed concern over the apparent lack of transparency and proper procedure in the awarding of the RM7.07 billion West Coast Expressway concession project.
  
  Its president, Datuk Paul Low said this mega project would involve massive public financing of a soft loan of RM2.24 billion and payment of RM980 million for land acquisition, and an unprecedented 60-year toll concession.
  
  “TI-M views with concern the apparent lack of transparency and proper procedure in the award. Given the public funding and long concession period, there could have been proper governance and transparency in the award through an open, transparent and competitive procurement process and public disclosure of the terms and conditions of the contract,” he said in a statement.
  
  To recap, on Jan 26, KUMPULAN EUROPLUS BHD [] announced to Bursa Malaysia that its 64.2% owned West Coast Expressway Sdn Bhd (WCE) has received the government’s approval to build the 316-km west coast project costing RM7.07 billion.
  
  The 316-km Banting to Taiping expressway would be on a build-operate-transfer (BOT) with a concession period of 60 years.
  
  KEuro also said the land acquisition cost of up to RM980 million for the project would be borne by the government.
  
  The company had also said a government support loan of RM2.24 billion, starting from 2013 at an interest rate of 4% per annum, and an interest subsidy, of up to 3% from commercial loans for a period of 22 years, would be granted to WCE,” it said.
  
  KEuro had then said toll revenue in excess of an agreed traffic volume would be shared on the basis of 70:30 between the government of Malaysia and WCE till full settlement of the government support loan and subsequently 30:70 after the loan is settled.
  
  However, on Monday, Low pointed out that such a mega project and also its impact on the public was an ideal candidate for implementing the Integrity Pact (IP), a tool for curbing corruption risks in public contracting projects.
  
  “The government has recognised the potential benefits of IPs by a Treasury circular dated Dec 16, 2010 outlining guidelines for implementing IPs in government procurement.
  
  “Further, MRT Corp., the GLC tasked with implementing the MRT project, has agreed to incorporate the IP in its procurement exercises,” he said.

Today, we have an article on BTimes.

I was shocked to read how BTimes would allow an UN-NAMED SOURCE to feature in the write-up. I thought the issues raised were dead serious and to have an un-named source making a lot of statements on the issue were rather disturbing.

Sigh.

Why can't the source be named?

Don't they know there's not much value and credibility in the article when everything is based on an unknown source?

Sigh!

What an insult!

• 'Incentives not sweetheart deal’
  
  By ADELINE PAUL RAJ Published: 2012/02/02
  
  LONG-TERM PLAN: Soft loan, perks for Kumpulan Europlus are to jumpstart expressway project, says source
  THE RM7.07 billion West Coast Expressway (WCE) project awarded by the government to Kumpulan Europlus Bhd (K-Euro) is no “sweetheart deal”, says a source close to the project.
  
  The deal, which involves the government providing KEuro a soft loan of RM2.24 billion at four per cent interest, among other supportive moves, as well as a 60-year toll concession, has drawn criticism that it favours the public-listed company at the government’s expense.
  
  The source, however, argued that the deal was structured with government support in order to get banks comfortable enough to help fund the deal.
  
  Without the soft loan, no bank would have come forward and the project would never take off, he said.
  
  The 316km WCE, which will link Banting, Selangor to Taiping, Perak, is meant to be an alternative to the increasingly congested North-South Expressway (NSE).
  
  It will take five years to complete the project, with work expected to start by yearend, the source said.
  
  “Traffics in this corridor is generally quite low except for the Klang Valley area, but the government sees huge long-term potential in the project in reducing traffic pressure on the NSE,” the source told Business Times yesterday.
  
  With low traffic projections and high costs, the government’s support loan provides “enough comfort for bankers to support the deal from the beginning”, he added.
  
  The project now would cost more thandouble to build than it would have in mid- 2007, which was when the project wasoriginally planned, due to several reasons, including that building material costs were now substantially higher, the source said.
  
  He said the estimated RM7.07 billion cost took into account the fact that the highway stretch was 100km longer than originally planned, and would include 5km of elevated sections (in the Klang Valley) that cost “four to five times more”, extra structures, and “fairly large” bridge crossings over four rivers.
  
  On rising material costs, he said stones and sand as well as bitumen, for example, now cost about three times more than in 2007, while the price of steel has shot up by more than 150 per cent.
  
  “All of these have contributed to the added cost,” he said.
  
  It will take time to build up traffic volume on the WCE, which is why a longer concession period is needed, he said, adding that it could take 10 years before “decent” traffic builds up.
  
  KEuro’s proposed 60-year concession is the longest known so far in the country.
  
  By comparison, it was offered a concession of 33 years in 2007.
  
  The traffic volume forecast in the current deal is about “20-odd per cent” lower than in 2007 and deemed more “realistic”, the source said.
  
  This was why, he said, the company was prepared to share toll revenue in excess of agreed traffic volume with the government on a 70:30 basis, in favour of the government, for as long as it’s paying off its soft loan.
  
  Under the current deal, the government is also providing KEuro subsidy of up to three per cent for commercial loan interest payments. Land acquisition costs of RM980 million is also to be borne by the government.

And here is my question. With this unknown source admitting that traffic is generally low, why this highway project????

Why?

Can the projected traffic justify that 7 Billion price tag?

****************************

ps: Oh yeah, I deeply deplore the usage of 'according to sources' in our financial news and reports. When the source is un-named, how does the reader know the credibility of the said article. And seriously, shouldn't financial news based on facts and quotable sources?

When the financial news is based on un-known source, the financial news becomes nothing more than a gossip tabloid!

I pray that such practise ends!

Malaysian AE Models 2Q net profit jumps 70%???

The following article was posted on the Edgemalaysia.com

• Malaysian AE Models 2Q net profit jumps 70% to RM3.34m
  Written by Surin Murugiah of theedgemalaysia.com
  Tuesday, 31 January 2012 18:33
  
  KUALA LUMPUR (Jan 30): MALAYSIAN AE MODELS HOLDINGS [] Bhd (MAEMode) net profit for the second quarter ended Nov 30, 2011 jumped 70% to RM3.34 million from RM1.97 million a year earlier, due mainly to higher revenue and better profit margins from logistics projects.
  
  The company said on Tuesday that its revenue for the quarter rose 44.24% to RM165.46 million from RM114.71 million in 2010.
  
  Earnings per share was 3.12 sen compared to 1.84 sen a year earlier, while net assets per share was RM2.21.
  
  For the six months ended Nov 30, MAEMode’s net profit surged RM7.76 million from RM2.82 million in 2010, on the back of revenue RM317.09 million compared to RM224.33 million a year earlier.
  
  On its outlook, the company said it was confident on the improvements of the global economy that may enhance its future profit moving forward.
  
  “With the current order book and barring any unforeseen circumstances, the board is optimistic that the group will remain profitable for the remaining quarters of the financial year,” it said.

Sounds good, yes?

However, this is one stock which I had blogged several times before and it was blogged based on all the wrong reasoning.

Past postings: http://whereiszemoola.blogspot.com/search/label/MaeMode

On 29th July 2011, my last posting on MaeMode was Maemode's Mind Boggling Q4 Earnings.

Let's review the issues.

1. Is there improvement in profitability?

Current half year sales revenue increased to 317.088 million. Current net profit totals 7.764 million. This equates to a margin of 2.4% only. Last fy 2011, MaeMode had margins of 3.08%.

2. Is there improvement in cash balances?

Company said its profits increased a lot. Well if the company is making more money, surely the company has more cash, right?

Here's a snapshot of MaeMode's balance sheet.

3. MaeMode has an issue with its receivables, is there any improvement?

MaeMode's total receivables, ie trade receivables+amount due from customers on contracts ( I wonder why the need to have list these items separately since both items essentially represent amount owed to MaeMode) now totals 499.464 million. Same quarter last fiscal year, the receivables totalled 442.443 million.

Receivables increased a lot once again!

Now, let's refer to table posted in the last posting: Maemode's Mind Boggling Q4 Earnings.

In FY 2006, MaeMode's receivables was 186.128 million. Receivables today stands at 499.464 million!

 Is that mind boggling or is that mind boggling???!!!

4. Is MaeMode owing more money now?

One of the other issue was the MaeMode's loans kept on increasing. As at end fy 2011, MaeMode owed some 368.224 million.

Let's have a look at MaeMode's current borrowings.

MaeMode's current total borrowings now stands at 410.097 million!

It's borrowings increased a lot, once more!!!

But the most worrying issue is stated on notes B9.

Amount payable within next 12 months is 376.997 million!!

!!!

And Happy Chinese New Year To You Too!

Here's to a splendid and blessed Chinese New Year!

Is XDL Talking To Air Or Talking Air?

In the posting Would You Bet On XiDeLang (XDL) ???, I highlighted the new twist in bold published on BTimes.

Let me repeat once again:

• "Ding will reject the offer from Navis, and instead put in a rival proposal to create liquidity in the market place," a person familiar with the company said yesterday.

It was utterly nonsense.

Think about it.

Fact: The talk with Navis was purely informal.

Fact: The talk happened FEW MONTHS ago.

And if that's the case, why on earth is XDL making such a big fuss over it? And worst still Ding is said to reject the offer from Navis.

How?

If he had NO intention to accept the offer, an offer made few months ago, why make such a big fuss? Heck, XDL was even suspended so that it can make this announcement of 'no substance' (Yeah, in my flawed opinion, there's no substance. It was an informal discussion and no price was even mentioned! )

But note the snakey spin put on it.

• "put in a rival proposal to create liquidity in the market place,"

Oh yeah, with such a statement, XDL was going to have to answer to Bursa once more.

And the reply was not shocking at all.

• Reference is made to the news article published on page B2 in the Business Times entitled “Xidelang board to meet over Navis’ buyout offer” in particularly the following sentences:-
  
  “…instead put in a rival proposal to create liquidity in the market place”
  
  “It will be a script based reward exercise”
  
  “….Ding will likely propose that XiDelang to undertake a bonus issue and a warrant exercise so that…..”
  
  XDL, after having made due and diligent enquiry with the Board of Directors, major shareholder, namely HongPeng International Holdings Ltd and all such persons reasonably familiar with the above matter, wishes to inform that the Management has merely engaged in exploratory discussions with various professionals to undertake various corporate proposals to enhance value for the Company and shareholders. However, no concrete plans or proposal has been finalised at this juncture.
  
  XDL will make the necessary announcement to Bursa Malaysia Securities Berhad (“Bursa Securities”) in a timely manner in accordance with Bursa Securities Listing Requirements, should there be any further development on this matter.

Exactly!

Another exploratory discussion only.

NO CONCRETE PLANS yet!.

Is this talking to air or talking air?

I dunno.

I guess when the boss is frustrated with the stock lousy performance in the exchange, anything is possible!

And best of all, BTimes carried yet another article on XDL.

Yeah..... OMG!

• Xidelang in talks to boost shareholder value
  
  By Francis Fernandez Published: 2012/01/12
  
  KUALA LUMPUR: Xidelang Holdings Ltd, China's second largest maker of running and skateboard shoes, says it's in exploratory discussions with various professionals to undertake various corporate proposals to enhance shareholder value.
  
  The company said this in a statement to Bursa Malaysia yesterday, in response to an article in Business Times which stated that the mainland-based company is considering a script-based exercise to reward its shareholders.
  
  Business Times had reported that Xidelang could introduce a bonus-cum-warrants exercise so that shareholders, who did not directly benefit from Xidelang's growing business, will be rewarded in the market place.
  
  Xidelang's share price had fallen by as much as 35 per cent last year to 29.5 sen a share.
  
  This year, however, the shares are up by as much as 25 per cent to close the trading day at 38 sen.
  
  Up to the nine months ended September 30 2011, Xidelang's pre-tax profit stood at RM84.52 million, while for the 12 months of 2010, the company's pre-tax profit stood at RM106.78 million.
  
  As it stands, Xidelang is the only China-based company traded here with a consistent dividend policy in place.
  
  Xidelang paid out a 1.5 sen dividend in 2010 and a one-sen dividend the following year, giving shareholders a 12-month dividend yield of 2.63 per cent a year.
  
  The company also has about RM134 million in cash, while its book value per share comes in at just under 60 sen.
  
  Xidelang is the third China-based company to be listed on Bursa Malaysia.\

One huge article just to say "Xidelang Holdings Ltd, China's second largest maker of running and skateboard shoes, says it's in exploratory discussions with various professionals to undertake various corporate proposals to enhance shareholder value".

Duh!

Xian Leng's 52 Million Ringgit Loss Provision!!!

Sae the following news clip on Xian Leng posted on Business Times.

• Xian Leng impairment loss provision
  
  Published: 2012/01/11
  
  KUALA LUMPUR: Xian Leng Holdings Bhd is of the view that the provision of RM52.11 million for impairment loss provided for in its last quarterly report will not be recovered in the forseeable future.
  The impairment was in respect of the value of fish ponds incurred by another unit involved in breeding of Arowana fish. The impairment loss exercise and provision is independent of the special audit that is still ongoing.
  Shares of Xian Leng rose 3 sen yesterday to close at 40 sen.

Stock rose 3 sen yesterday? LOL!

Ok the special audit was highlighted in the posting Special Audit To Be Carried Out On Xian Leng!

A loss provision of 52.1 million???

What? What?? What???

I decided to check Xian Leng's announcements on Bursa website.

This is what Xian Leng said yesterday:

• With reference to the announcement dated 27 December 2011 on the third quarterly result for the quarter ended 31 October 2011 in respect of the Provision for impairment loss on property, plant and equipment, the Board of Directors ("Board") wishes to furnish the following additional information for public release.
  
  Impairment loss testing exercise is carried out based on information prevailing and available to the Board prior to the release of every quarterly results. In compliance with FRS 136, the Board will deliberate on the impairment loss computation based on discounted cash flow basis method as adopted in concurrence with the external auditors.
  
  During the third quarter results which were under reviewed then, RM11.39 million impairment loss was provided for a subsidiary involved in the breeding of other tropical fish, such as guppy, platy fish and cat fish. No provision was provided to this subsidiary in previous years/quarters due to gestation period provided to assess the profitability of this said subsidiary project in respect of start-up period. As this subsidiary continues to incur losses after a reasonable period and based on information currently available, the Board is of the view that provision for impairment loss of RM11.39 million on property, plant and equipment relating to this project should be fully provided in this Quarter onwards. Revision will be made in the future if this subsidiary could generate positive contribution to the Group thereafter.
  
  In addition, RM52.11 million of impairment loss was provided for in respect of the value of fish ponds incurred by another subsidiary involved in the breeding of Arowana fishes. Due to continuous and persistent drop in productivity and selling prices as compared to the previous year/quarters results, the forecast for future yearly/quarterly revenue (discounted cash flow basis) of the Company has deteriorated further and likely to trend downwards. In view of this latest development and assessment, , higher amount of fish ponds value incurred in respect of capital expenditures incurred with regard to expansion plan carried out in previous years is not envisaged to be recovered in the forseeable future. As such, the Board is of the view that the additional provision of RM52.11 million is necessary in accordance to the FRS 136 and thus impairment loss was provided in this Quarter onwards.
  
  We wish to highlight that this impairment loss exercise and provision is independent to the Special Audit that was announced on 17 October 2011. Special audit is still on-going and the Board will re-assess the impairment loss ( if any) quantum and its impact to the financial statements once the Special Audit is concluded and the Final Report is received.
  
  
  This announcement is dated 10 January, 2012

WOW!

Does it really cost that much?

11.39 million for the breeding of tropical fish such as guppy, platy fish and cat fish?????

Seriously that much money??????

Damn!

How much did you last pay for your guppies?

oO