China Minzhong Food Corporation

[CityFarmer]

I think if we want to buy china company, we can easily buy from hk exchange, where it is better regulated, have better companies, and in a sense it is unfamiliar territory, investor might think more before they invest in these foreign companies.

"correct me if i am wrong" I dont see how these listed s chip benefits singapore retail investor, except listing fee, commission for sgx, if sgx really wants to show it is "working", go and get the whale, like alibaba, etc, if not they might as well not do anything. Singapore investor grow up with our trusted local companies, and have not been exposed to the untrustworthy s chip, by listing these companies in sgx, it cause investor to categorize them as trustworthy as local companies, and usually ends up in sorrow.

we know what is the problem with these companies, fake accounts, fake story, and no recourse for investor when it is exposed, i dont see how these are going to improve going forward, because fundamentally, these are foreign companies, we cant do anything to them

I think looking at the statistic are important, if we have been losing money in those s chips, isnt it better to stop buying no matter how attractive the "story", "valuation", "account" is

my naive view

Here are my views.

China is a difficult market for foreign companies now, but it is still too costly to ignore by major companies from the rest of the world. SGX, as a key regional exchange, can't ignore China market, I guess. Of course, individual investor has the choice to shy away from them.

China companies aren't homogeneous. Alibaba isn't the only quality one. In fact, I don't think Alibaba fit as the best stock under value investing criteria. As long as the right process installed, after the last lesson learned, we should just venture on, IMO

(sharing views)

[testwrite]

anyway there is big drop in minzhong revenue and income in the most recent financial statement, this definitely support the takeover by the CEO, just too coincident, just like keppel corp takeover of keppel land, keppel land net income will drop and keppel corp net income will increase, just that S chip will do it in a more dramatic action. Not sure where is the value in these s chip, since they can come down like a house of card anytime

[weijian]

CMZ does it again this year, with interim dividend of 6.43cts declared just months before full year closes.

http://infopub.sgx.com/FileOpen/CMZ%20-%...eID=355248

The timing is similar to last year. With a pending Mgt G.O, it makes little sense for Mgt to want to declare this dividend unless the G.O wouldnt be going through.

Else, their Indonesian Towkay could just be hard up for cash again but the timing is interesting (earlier, i read that the rupiah is seasonally weak during this period as Indonesian companies repay their foreign liabilities)

No choice liao got to extract as much cash as possible to recoup expensive investment

Declares interim dividend of 4.19 SG cents.

http://infopub.sgx.com/FileOpen/declarat...eID=303927

(Not Vested)

[testwrite]

hard to tell the timing and rational for the dividend, as minzhong is so opaque

but it is either
1. the takeover fail, so at least some dividend to boost the morale of shareholder

or

2. the takeover is even more imminent, as it was supposed to happen by june, and indofood wants more money to sell

[testwrite]

http://infopub.sgx.com/FileOpen/CMZ_Upda...eID=358165


after half a year, still cannot raise money to fund the takeover, then why raise the idea of takeover so early. I guess the dividend was a harbinger that the takeover isnt happening

[cyclone]

It seems they are really serious.

Payment of Earnest Sum
The Board of Directors of China Minzhong Food Corporation Limited has also been informed by CMZ BVI on 30 December 2015 that, pursuant to the terms of the MOU,CMZ BVI has paid the earnest sum of S$40,000,000 to PT Indofood.

<vested, tikam tikam>

[weijian]

It seems they are really serious.

Payment of Earnest Sum
The Board of Directors of China Minzhong Food Corporation Limited has also been informed by CMZ BVI on 30 December 2015 that, pursuant to the terms of the MOU,CMZ BVI has paid the earnest sum of S$40,000,000 to PT Indofood.

<vested, tikam tikam>

Paying 40mil for 1.20sgd/lot will buy one about ~5% of CMZ shares, so this means they have paid 10% deposit, similar to how Marco Polo Marine had previously paid SembcorpMarine for PC400 jackup. So, Mr Lin and his CFO seems serious but consequences are not exactly catastrophic if they don't proceed with the SPA.

14th Oct 2015 announcement: http://infopub.sgx.com/FileOpen/CMZ_MOU%...eID=373544

Mgt now has until 14th Oct 2016 and earlier to finalize funding arrangements before signing the SPA. If they do sign eventually by the deadline, they will still have to proceed with the mandatory G.O. Before this announcement, Mr Market had already assigned a very low probability that it will go through - The gap between post and pre G.O announcement narrowed 50% to ~1.05sgd, only for it to steadily fall back to pre-G.O price and then languish to current ~70ct level.

Some interesting questions:
- Will Mr Market still be right?
- Will it still pay an outsized dividend during mid year 2016? (2014: 4.19cts, 2015: 6.43cts)

[HitandRun]

MOU Extract:

If however,CMZ BVI fails to pay such earnest sums on the due date or the Parties fail to sign the SPA by the Expiry Date,the MOU shall be terminated and PT Indofood shall be entitled to forfeit the earnest sums paid by CMZ BVI,and CMZ BVI shall have no right or claim against PT Indofood for costs,expenses,damages,losses,compensation or otherwise.


Ha Ha, it would certainly be catastrophic for me if I lost $40 million because it will be money that I do not have. But maybe Mr Lin has much more money, so $40 million could be like loose change to him. Money money money, must be funny, in a rich man's world....

[testwrite]

it is weird, these deal are supposed to be highly certain and lucrative, and using rational reasoning, the market should not be lagging so much from the offer price, but i think too many scam with 'S' chips have made people wary for too good to be true deal. I guess 'S' chips in Singapore, "head you win, tail i lose", if it is good, the management will buy back at cheap price, lizhong, li heng, if it is lousy, singapore investor will lose big time

[cyclone]

20160129103311, there is a married deal of 4,000,000 shares done at 0.78 sgd.
Who will be right, who will be wrong ? Only time will tell.