Firstly, I must clarify that the China based listed companies that I sold were: XDL, MSPORT, and MAXWELL that are still listed in Bursa Malaysia. I shared some of my insight about these companies few years ago. They are still fundamentally attractive, I must admit it. However, some questions that appear in my mind cannot be answered satisfactorily. Thus, I decided to clear them out from my portfolio with margin loses.
The very first question is: If you got many extra cash, do you put all your cash in bank account or fixed deposit account for years? Money management: Fixed Deposit Versus Simple Bank Account
I believe a successful business person should always optimise his or her limited resources, especially cash. Putting abundant of cash in bank account instead of Fixed deposit for years is definitely unacceptable for me. Both accounts have the same level of risk, say bankruptcy? I believe that even a simple educated person sure will put his or her extra money in Fixed deposit (instead of bank account) for years. It is a very simple action to at least earn some interest for almost risk-free.
No dividend, again
Moreover, with so many extra cash, these directors appear no willing to share their profits with their shareholders. For a company that earned 20sen yearly, 2sen dividend appears just a very affordable task. Personally, if directors are ONLY willing to share their RISK with shareholders, then it is no point for me to invest my precious time and money on their companies.
Shareholders' interest
Although I may not a very patient investor to hold the shares of a companies for years with nothing tangible return like dividend, it is still acceptable for me to hold companies' shares for nothing, if and only if, I can 'feel' the management or directors of that companies are willing to take care the interest of their shareholders.
There are many ways to take care the interest of their shareholders. The core idea is to optimise the value of each shareholder. It is totally understandable that companies need to reserve certain amount of cash for any potential impact or unexpected events in the future. But I do not believe that holding abundant of cash in Bank Account is a way to optimise the value of shareholders. This suggests that the management or directors are lack of money management skills.
This post excludes the potential of "Cooking the Book". This is because it requires more information to discuss this matter. Nonetheless, my logical thinking and observation based on the few questions above suggest me to get rid of these companies as soon as I can.
Please do not sell them if you have good answers or explanations upon my silly questions and concerns above. That's all for today. More fascinating articles and sharing will be updated from time to time in Xaivier Blog. So, you are welcome to subscribe our feed, look at our sitemap or simply visit our Homepage for latest sharing.
Written by: Xaivier Chia
P/S: The above sharing is solely based on personal insight and information that believed to be reliable. Your valuable feedback are very welcome.
last time bought at 0.335, hang for a long time....luckily manage to sell it at 0.345....the 2 china listed companies stock i sold were maxwell and CSL.....luckily CSL manage to cut lost, else now even worse....from now on, i not dare to buy any china listed company stock even the fundamental is so attractive...don't be a fool again...
lu mati...i was looking before at 32 cents..in January...then i see something is not right...luckily didn't buy...mana tau last few weeks up till 40 cents....sure mati kering
I held Maxwell many kk shares. Lots of cash but hold back div. for 2013. Just sold all at 30cts and switch to China Stationery Ltd - got a good deal at 19.5cts/share. Better financials and potential div. coming. EPS also better. wish me luck!
Also sold all my Multi Sports Hld. and switch to China Stationery few weeks ago at 0.215/share. Lucky for me Msport now 17cts. CSL still 20cts. All depends on CSL now to perform.
I've finally lost faith in Chinese stocks, sold every single one of them. I'll never never never never never never never never never never never never never never never never never never never never ever going to buy any Chinese stocks in my life. NEVER AGAIN!!!!!! Malaysian should boycott all Chinese stocks from mainland.
Maxwell.Intl. should seriously consider giving "free" warrants in lieu of dividends like Xinquan. How about it Maxwell.Intl's directors? Maxwell price will shoot like a rocket. Win Win??
Their so-called share buy-back is a farce. 1 batang, 10 batang, the lady boss must think Malaysian investors easy to dupe. This stupid counter always say got how many million cash pile lah, building factory here and there lah, but stingy until don't even want to give dividend, not to mention the share price only goes south. And worse thing is the director or what always threaten to privatise lah, want to delist and re-list in HK. Then why the hell they list in Malaysia in the first place?
If the company forever don't pay out dividends to shareholders, the share price will forever not go up! The higher the risk, the higher is your cost of undertaking, imagine yourself going to hold the shares for the next 10 to 20 years and the price still is going to stay around 20 cents! I bet God will also tell you this is a crazy thing to do if the purchase shares!
Most of the China companies were listed with the help of OSK Investment Bank on the Malaysia stock market but they started to perform badly not long after their listings here. I wonder whether their poor performance have anything to do with OSK Investment Bank's reliability and very questionable reputation?
The management is not a responsible person. The company can decide not to declare dividends but the shareholders can not afford to live without dividends. Even worst is, the company does not keep market share price at value. The market price is 20 cents and the value of nta=$1.19. After they sell you the shares, they forget about you, then they spend the money in China to do whatever they want. This company doesn't take care of shareholders, I really pity ourselves, why do we support people that don't take care of us, don't you think it is funny. They should at least keep the market price at IPO price so that investors don't feel ripped off by these Chinese nationals.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
anbz
5,163 posts
Posted by anbz > 2013-09-19 16:47 | Report Abuse
kakijudi/tonylim..i noticed that someone is flagging u for your "..." commment...why huh?...it's not me...seems u have more than one enemy..haha