HDM-Carlaw To Be Taken Over By CIB

One company caught my attention this weekend. HDM-Carlaw.

Let's go back to June 2007. On Star Business: HDM-Carlaw: Validation takes long time

• MD: This caused high trade receivables
  
  PENANG: HDM-Carlaw Corp Bhd’s high trade receivables last year was due mainly to the long process required by its Japanese customers to validate the new automated equipment from the group.
  
  For the financial year ended Dec 31, 2006, the company’s trade receivables swelled to RM9.2mil, while its revenue stood at RM6.25mil.
  
  Managing director Tong Keng Yoon said the validation process for the new automated equipment took six to nine months.
  
  “Presently, seven or eight units of our automated equipment, used in the paper and print industry, are being validated by our Japanese customers,” he told StarBiz after the company AGM on Monday.
  
  “The nine-month period is almost up, and we are confident of recovering the amount from our customers,” he said, adding that the group had no provision for the receivables.
  
  Tong said for the first quarter ended March 31, HDM-Carlaw’s trade receivables dropped slightly to RM8.6mil, as some payments had been settled. It recorded pre-tax profit of RM99,000 on revenue of RM1.4mil for the quarter.
  
  Listed on Mesdaq last year, HDM-Carlaw specialises in manufacturing automated equipment for the paper and print industry and medical examination gloves..... (read rest here )

A pre-tax profit of only 99 thousand?


My data showed HDM closed at 0.41 on June 26th 2007.

The MD was seen disposing his shares Changes in Director's Interest (S135) - TONG KENG YOON

In Oct 2007 the MD was still selling his shares. Changes in Sub. S-hldr's Int. (29B) - Tong Keng Yoon. HDM was trading between 35-40 sen then. (Plenty of other disposals too. Did not check most of the postings. :p )

On 27th Feb 2008. HDM plunges on heavy volume. Data can be seen from finance.yahoo website.

Here's the chart.


Now two days later, on 29th Feb 2008, HDM announced its earnings

29th Feb 2008. Quarterly rpt on consolidated results for the financial period ended 31/12/2007. Look at the sales revenue for the quarter: ZERO!

Company said:

• A negative revenue of RM97,137 was recorded by the Group in the quarter under review, which represented a decrease of RM2,175,947 as compared to RM2,078,810 revenue registered in the preceding quarter ended 30 September 2007. In line with the decrease in revenue, a loss before tax of RM1,417,912 was recorded by the Group, which represented a decrease by RM1,588,547 as compared to profit before tax of RM170,635 in preceding quarter ended 30 September 2007. This was because no machines were delivered during the quarter and a reversal of sales of certain accessories and modification upgrades which were not delivered.

No machines delivered = ZERO sales.

Hmmm... this does explain the massive plunge (with extreme volume) just two days ago!

And if my eyes do not fail me, I see that HDM did not even get queried!

Sep 2009: HDM-CARLAW CORPORATION BERHAD ("HDMC" OR "COMPANY") - ANNOUNCEMENT PURSUANT TO GUIDANCE NOTE 5 ("GN5") OF BURSA MALAYSIA SECURITIES BERHAD ("BURSA SECURITIES") ACE MARKET LISTING REQUIREMENTS

• Reasons for the default
  HDMC is unable to service and repay its debts to RHB as the Group is experiencing operational difficulties and cash flow deficiency due to operational losses incurred in the last two (2) quarters, which reduced turnover and low margins. (ps: size of the debts weren't big at all but HDM still defaulted! see Carlaw - Ann GN5.pdf )

And here's HDM-Carlaw's last reported earnings in Feb 2010: Quarterly rpt on consolidated results for the financial period ended 31/12/2009

HDM-Carlaw lost some 6.7 million for the quarter.

**Note HDM wrote off their bad debts worth some 6.018 million. Trade receivables now zero! **

Last month, April 2010, HDM-Carlaw got lucky. They found a buyer for their listing!

HDM - Requisite Announcement.pdf

• CIB Interactive proposes to acquire the entire equity interest in CIB from the CIB Vendors for a total purchase consideration of RM38,250,000 ("CIB Purchase Consideration") to be satisfied entirely via the allotment and issuance of 382,500,000 new ordinary shares of RM0.10 each in CIB Interactive ("CIB Interactive Shares") at an issue price of RM0.10 each ("Consideration Shares") ("Proposed Acquisition").

WOW! Holy Cowpitalist Cow!

A purchase consideration of rm 38,250,000 for HDM-Carlaw?

WOW! WOW! WOW!

Hmmm...

Anyway CIB's RTO purchase of HDM-Carlaw is featured on today's Star Business: CIB to go regional after RTO