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PR Newswire
24-09-2012, 05:56 PM
From Lim & Tan:
The board of directors (BOD) of China Fishery Group (CFG) said that there have been allegations in certain media publications that the group owns fishing quotas or owns or operates fishing vessels in Russian waters in violation of the applicable laws of the Russian Federation.
CFG confirms that it does not own any fishing quotas in Russian waters nor owns or controls any Russian fishing companies that have such quotas nor operates any fishing vessels in Russian waters. Based on legal advice, the CFG believes that their fish supply arrangements are in full compliance with all relevant laws and regulations of the Russian Federation.
The above is significant as CFG does most of their fishing in Russian Waters and would be significantly impacted if the allegations were to be true.
Fact is, CFG’s share price has been disappointing, having declined 39% from its Feb’12 high and 68% from its early 2011 high of $2.34.
Well known US based private equity firm Carlyle Group’s purchase of an 11.1% stake in the company in June ’10 at $1.85 a share only helped the stock temporarily reach its high of $2.34 in early 2010 before the stock went on a consistent decline to 75 cents currently which is its lowest since June ’09. The all time low of 48 cents was hit in Mar ’09.
CFG’s share price has been stuck in a narrow range of 75-82 cents since mid-July ’12 till current and 85-90 cents from May ’12-mid-July ’12.
Part of the reason is the continued low confidence in China related stocks and also its repeated delays in the start of the fishing season causing 3Q to June ’12 profit to decline 44% to US$21mln dragging down 9 months to June ’12 profit by 10% US$93mln.
Our upgrade to BUY in Feb ’12 when the stock was trading at $1.18 had proved premature and we are now downgrading to HOLD until management can deliver on their promised catch volumes.
The board of directors (BOD) of China Fishery Group (CFG) said that there have been allegations in certain media publications that the group owns fishing quotas or owns or operates fishing vessels in Russian waters in violation of the applicable laws of the Russian Federation.
CFG confirms that it does not own any fishing quotas in Russian waters nor owns or controls any Russian fishing companies that have such quotas nor operates any fishing vessels in Russian waters. Based on legal advice, the CFG believes that their fish supply arrangements are in full compliance with all relevant laws and regulations of the Russian Federation.
The above is significant as CFG does most of their fishing in Russian Waters and would be significantly impacted if the allegations were to be true.
Fact is, CFG’s share price has been disappointing, having declined 39% from its Feb’12 high and 68% from its early 2011 high of $2.34.
Well known US based private equity firm Carlyle Group’s purchase of an 11.1% stake in the company in June ’10 at $1.85 a share only helped the stock temporarily reach its high of $2.34 in early 2010 before the stock went on a consistent decline to 75 cents currently which is its lowest since June ’09. The all time low of 48 cents was hit in Mar ’09.
CFG’s share price has been stuck in a narrow range of 75-82 cents since mid-July ’12 till current and 85-90 cents from May ’12-mid-July ’12.
Part of the reason is the continued low confidence in China related stocks and also its repeated delays in the start of the fishing season causing 3Q to June ’12 profit to decline 44% to US$21mln dragging down 9 months to June ’12 profit by 10% US$93mln.
Our upgrade to BUY in Feb ’12 when the stock was trading at $1.18 had proved premature and we are now downgrading to HOLD until management can deliver on their promised catch volumes.