Yangzijiang Financial Holding

[Bluechipfan]

First of all, it has been a while since I am here and I wish everyone a very huat rabbit year going forward. YZJF is the second S-chip that I invested heavily. First one was China Sunsine [CS] which I still have 100k shares at the average cost of 27 cents post split. I have held 500k shares of CS at one point before gradually exit most of it just prior to the announcement of split.

Pardon me for the seemingly unrelated information above, but I find it kind of relevant because as with CS, YZJF is also simply viewed negatively by some quarters with the label of S-chip. Some people just don't trust S-chip but I hope YZJF can turn out to be another CS for me. It wasn't easy investing in S-chip because the negative opinions/views on S-chip can be overwhelming at times. It's hard to ignore them and sometimes it make people, who are vested in S-chip, started to have self doubts. I still remember some comments on CS such as 'it's high risk, the factory could be on fire' or something to that effect.

For YZJF, what attracted me to it was the historical high profits and generous dividend payout pre split [YZJS]. Once the management undertake the dividend policy of at 40% payout NPAT, the only question I have to ask is how likely the profits will continue and sustain post split as YZJF. After seeing their management recruitment and insiders buying post split, I decided to build my position in YZJF. If Ren and the management can build YZJS from scratch in the past, Ren with his management can now also build up YZJF. This is track records. They just need time and I figure that while waiting, the risk can be mitigated with the dividends and the relatively low cost of purchases due to the suppressed share price. My average cost is now about 38 cents and I reckon that if the dividend is between 1.5-2 cents per year, not only it will bring down my 'average cost' correspondingly, the share price will bound to surpass 40 cents too and/or even more within 2 years. I think the cost and the risk is commensurate in this case and 2-3 years is reasonable timeframe to have a even clearer picture one way or another.

2 years has passed. Not exactly as envisaged, as YZJF ditched the focus to be a fund manager and old Ren came back to helm the company and refocusing / added Maritime businesses, which is his expert areas. Meanwhile, I have totally exited CS and reinvested most of the fund into YZJF. Other than the aforesaid, the rest of the scenarios panned out more or less as reality, specifically the 1.5-2 cents dividends payout amount [1.8c 2023 & 2.2c 2024] and the share price crossing 40 cents. The timeframe I given myself, i.e. 2-3 years has arrived and let's see if the upcoming results would provide a clearer picture in term of business growth and earnings visibility.