How long can this balance cash being burned out (in months/years) if business continues to slump ???????
Anyone can offer clues
Despite the slump, China Milk still got positive operating and free cashflow. I don't think their little cash kitty will be severely impact.
They got over 2bil RMB of cash.
People are dumping the stock due to fears over whether the cash is real and why the management borrow 150mil usd and not spend it at all. When business was booming, nobody cared but now its falling apart with rivals catching up. Suddenly ppl are questioning whether was CM management complacent.
Posted: Sat Nov 07, 2009 3:58 pm Post subject: Re: CHINA MILK
ENSERV wrote:
Anyone could help in this question on CHINA MILK loan:
1) How much is the convertible loan amount outstanding as at 30 Sep 09 in US Dollars ??????? = RMB 1,048,264,000
US$
2) When is this Con Loan repayable i.e. date of payment = date/month/year
Appreciate kind help given
1) 150 mil USD
2) To be redeemed at 2012 but unless I am mistaken, investors have an option of redeeming next year.
CM 1Q 09 Report
Quote:
Convertible bonds
On 5 January 2007, the Company issued US$150 million principal amount zero coupon direct, unconditional,
unsubordinated and unsecured convertible bonds (the “Convertible Bonds”) due on 5 January 2012 (the
“Maturity Date”) with rights attaching thereto to convert into new ordinary shares in the capital of the Company
(each, a “New Share”) at the conversion price of S$2.00 per New Share (the “Conversion Price”). The
Conversion Price represented approximately a 45% premium over the closing price per share in the capital of the
Company on the SGX-ST on 7 December 2006. Based on the Conversion Price and assuming full conversion of
the Convertible Bonds, up to approximately 115.4 million New Shares are expected to be allotted and issued to
the holders of the Convertible Bonds. However, under the terms and conditions of the Convertible Bonds, the
Conversion Price is subject to adjustments upon the occurrence of certain events including but not limited to any
sub-division and consolidation of shares as well as the issuance of new shares and securities convertible into new
shares in the capital of the Company.
Unless previously redeemed, converted or purchased and cancelled, the Convertible Bonds will be redeemed by
the Company at 129.58% of their principal amount on the Maturity Date.
Further details on the Convertible Bonds were set out in the Company’s announcement dated
8 December 2006.
Since they more than enough cash to pay up the bond, there shouldn't be much of an issue...
Bot it quite some time back because of the reported strong cash position and unique market positioning. I even remember they produced a very nice annual report of a calf
But after a while, I cannot understand why they need to retain so much cash in their books and give so miserable dividend, and the bond issue just muddles the whole picture.
Then the melamine scandal broke, and the slew of problematic S shares with fake cash gives rise to uncomfortable realisation that in addition to the high risk prospect, I know very little about the industry.
Sold off my small stake at a big loss. I'll avoid something that begins with Sino or China. And for that matter, Cosco and yangzijiang too.
For those who gain on these counters, I congratulate them on their successful gamble, but I have enough misadventures and regrets with S. Hit stocks for the next decade.
I learn a similiar lesson from ChinaMilk. I vowed never touch another S Chip. I always wondered why they held on to so much cash for. I mean, if it was from their own earnings and they are super stingy - no problem. But if it came from a bond issue meant to raise cash to grow the company, then why are they hoarding it instead of acquiring assets. Something aint right.
Sold off in Jul for a small profit.
I went to their AGM. I last sold china milk at 51cents long back though.
Its nt that they didnt want to acquire assets, its that they had trouble doing so like the ban on importing cows for awhile,etc.
On normal circumstances, I would have bought them at these prices but suddenly be unable to sell some of the products is just *censored*. Besides that, the CB which they didnt use well, low or no dividend, really not worth looking at unless the price goes really low or their conditions improve.
They made 0.88cents this quarter. If one is to assume the worst that its gonna be 0.88cents per quarter, then its 3.52 cents per year which means PE is 9+ right now which is too high for them imo.
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