04-10-2014, 11:53 PM
(04-10-2014, 11:26 PM)touzi Wrote:(04-10-2014, 05:33 PM)CY09 Wrote: I am bit skeptical of FJZY's financial and worried when i saw the news. ...
On the balance sheet it has 437m RMB or s$91.3M of cash with about 29.5m RMB or s$6.2M of ST-debts; and FJZY market cap is s$15.5M. Even the company's level of cash & equivalent is higher than current mkt cap.
High level of cash by itself does not indicate that there is fraud. Is there any signs that hint of fraud?
-Was there any rights issue? (no)
-Is there high level of debt? (the loan amount is small which makes the usual explanation that it is to maintain relationship with bank more believable)
-Is the interest earned from the cash particularly low? (not sure. need to verify)
-Has the company been giving dividend? (yes)
Anybody can add to the checklist ?
At the moment I am more concerned with mismanagement of the business than fraud. Quality issues indicate serious operational weakness and to lose a customer that is big enough to carry out a project in Iraq must be very damaging to its reputation.
Are you saying the market has seriously mis-priced this stock?
I agree that having high level of cash by itself does not indicate that there is fraud. But however, almost all the S-chip that imploded earlier on exhibited the same characteristics - having lots of cash and the share px is languishing at a level lower than the cash backing per share.
This is not a phenomenon only found in Singapore. Go check out the S-chips listed in Malaysia.
Since they have so much cash and if you are a shareholder, can you get them to do either of the following?
- Give a yearly bonus dividend payout
- Start a share buyback program
- Get the management themselves to start buying shares
- Take the company private since the px is so low now
There are no good stocks. Stocks are only good when they go up after you bought them.