HanKore Env   

Hankore onward march to 8-10cts.

You are an early bird coccx.

cccx123      ( Date: 06-Nov-2013 07:56) Posted: Well, I agree that Hankore's fundamentals are good and full of prospects. However it was only recently that the stock price started to reflect that. Remember that for most of the past two years, the stock was trading at 4-5.5cts.. Such cheap valuations did not do any favour to the recovery story. Well, no point speculating I guess. We will see what David's plans are in the EGM. leeeta      ( Date: 06-Nov-2013 01:14) Posted: HK is different from these companies..those that tanked hard with no recovery or recovered albeit a longer period either has no sexy growth story and poor FAs. The fundamentals of HK can only improve from here... and since Hk is now on a war path for growth...we can only expect good things to happen for the share price...except for this short term price gyrations

 

Well, I agree that Hankore's fundamentals are good and full of prospects. However it was only recently that the stock price started to reflect that. Remember that for most of the past two years, the stock was trading at 4-5.5cts.. Such cheap valuations did not do any favour to the recovery story. Well, no point speculating I guess. We will see what David's plans are in the EGM.

leeeta      ( Date: 06-Nov-2013 01:14) Posted: HK is different from these companies..those that tanked hard with no recovery or recovered albeit a longer period either has no sexy growth story and poor FAs. The fundamentals of HK can only improve from here... and since Hk is now on a war path for growth...we can only expect good things to happen for the share price...except for this short term price gyrations. cccx123      ( Date: 05-Nov-2013 19:21) Posted: Even euNetwork's stock price tanked in the immediate aftermath of the 50-1 reverse split. It only started to break even recently. would we like to experience that in the hope th stock price will recover? Lol.

 

HK is different from these companies..those that tanked hard with no recovery or recovered albeit a longer period either has no sexy growth story and poor FAs. The fundamentals of HK can only improve from here... and since Hk is now on a war path for growth...we can only expect good things to happen for the share price...except for this short term price gyrations.

cccx123      ( Date: 05-Nov-2013 19:21) Posted: Even euNetwork's stock price tanked in the immediate aftermath of the 50-1 reverse split. It only started to break even recently. would we like to experience that in the hope th stock price will recover? Lol.. cccx123      ( Date: 05-Nov-2013 19:11) Posted: Citigroup's share price tanked in the aftermath of the reverse split. Very sure there were lots of fund managers participation. If the stock price dips below 6cts we can reopen the old thread le. Been on a downward trend for a week even as ABL and one sky recover, albeit from extremely low bases. But then again, they were trading at multiples of their earnings and NTAs so it is not a fair comparison. Hankore has an NTA of 7.7cts. No reason for it to drop so much unless there are negatively viewed corporate developments such as this reverse split exercise. Prefer to be surprised pleasantly than shocked so I won't sugar coat anything.

 

Just came back from the bund..after sumptuos dinner.

The biggest loser in this exercise if the share price tanks with no recovery would be the one holding the largest pie. Will David shoot his own foot? Go figure. And Paul being a old bird with lots of experience and Alan may hv given him all the advice he needs.

I have said, long term prospect is good..short term there will be share price gyrations which will cause sleepless nights to some. Going past 1 dollar is not gonna be an issue but goin past 5$ compared to 50cts prior consolidation is a different game. Pennies being pennies are more speculative and therefore more interesting...compared to mid caps and blue chips. If HK can do a Wilmar or a old Cosco run then that will be fantastic but this is going to be hard to achieve..let's see.

I hv the feeling as I mentioned earlier in the post that big funds are not going to invest big time in a micro penny with a big float that is not even rated. Big funds may hv put forth this condition which causes this reaction from David.

I was once in Beyonics where the share after consolidation went up 15% to 20% on the first two days of trade and then downhill to almost 80% with no recovery. If the same happens on the first two days..then I might cash out 50%...or all and then come back in again with more lots when the share price adjusts itself. This price adjustments happens all the time prior or post..so be on the lookout for opportunities to exit and come back in again. That way we can increase our holdings by selling high and buying more at the lows. What I don't like is this share price uncertainty when HK has just seen the light...and I don't know for how long.

Anyway..we can camp at the SGM and give David a very tough time. He either convinces us or he will face a major setback..which is no good for any of us..and David knows that.

Share7      ( Date: 05-Nov-2013 18:56) Posted: Interesting perspective. I agree on your overall assessment. HK's FA unchanged. This are all corporate development moves. However past share consolidated companies do not exhibit good returns although most are smallish companies without fund managers participation. If HK can attract major fund managers' participation and high net worth individuals, it may be a different picture. I support....leeete, what say you? As I like to say, look see, look see, and do nothing. But this time, better wait and pray. lol. :) reknab      ( Date: 05-Nov-2013 18:44) Posted: I've been following this forum for a while now, and just signed up to add to the discussion on Hankore. I can understand the stigma and the negative connotations behind a reverse stock split, but my opinion is that we should consider the circumstances and the rationale behind it. For example, in the US market, many reverse stock splits are done as a cosmetic action to avoid delisting. These companies are not financially sound to begin with, and hence we associate reverse stock splits with poor performance, but in my opinion Hankore is doing it from a position of strength.  Hankore has a solid growth story, as many in the forum have recognised, and a stable base with more than half its revenue recurring (and growing). I feel that the most important thing for Hankore now is to be able to raise more money so that it dosent miss out on significant investment opportunities that are popping up in China now. The problem with taking on too much debt (they have ramped up their debt levels significantly over the past year, finance costs up 25% y-o-y) is that this leaves Hankore vulnerable to 1) The inevitable tapering by the Fed and the subsequent rise in interest rates as well as 2) a maturity mismatch/gap between their debt (up to 7 years?) with the time period in which they need to finance their projects (> 20++ years?). Hence an equity infusion is needed, and is in fact prudent in my opinion.  As a penny stock, Hankore has an enormous public float - about 65% from their AR 2013 - and limited institutional ownership. But institutional ownership is important, both in terms of the price discovery process (institutions are, arguably more sophisticated and hence more able to value the stock accurately) as well as a base for stability and to avoid the price swings that have been associated with Hankore. I feel that Hankore is embarking on its first step to make the stock more attractive to institutions by cutting the float (and hence liquidity and volatility) as well as by trying to reduce the stigma associated with penny stocks by cosmetically pushing up its share price. At the end of the day, David recognises that Hankore has to raise equity capital and needs institutional ownership to help to properly value the stock and push its trading multiple up to level more comparable with its peers (and not just through a rights issue, but through a placement with a well known private equity/hedge fund for the signalling effect and to add to its legitimacy with the market.) The pity is that current investors are selling and losing faith in Hankore even when its fundamentals have not changed and when David's decision, in my opinion, is a calculated and well thought out. I'm actually cautiously optimistic on this, and happy that David is trying to raise the share price before an equity infusion and hence not diluting us (and himself) unnecessarily. Love to hear everyone's comments on this - I'm not familiar with local precedents of reverse stock splits and hence cant comment on whether the circumstances of their reverse split is from a position of strength, or from a position of weakness. FYI I'm vested at 6.5 cents

 

Europe recovery will have significant positive impact on freight rate which will in turn helps NOL.

 

I bought 6.3 and 6.4 when it dropped a few days ago and ended with a ST and contra 6.5. I like to collect over a few trades over days or weeks as It drops as I don't expect to catch the low on 1st trade. However, if it turns around instead, I'll do a ST instead. The TA is looking weak as it breaks down the 5 0days MA support. For FA to look attractive again and given the dark cloud of the share consolidation, it may have to wait for 5.4c or 30% discount from NTA of about 7.7c. Even that, share consolidation will usually sum up less than the original sum before consolidation. In another words, if Ye last traded price is 6c then with the 10-1 consolidation, the price may be traded less than 60c at least in the initial few days.

As I shared, I'm currently focusing on NOL while keeping an eye on Hankore.

From Dr YC Chan Oct 2013 issue which mentioned NOL in the end of the report -

Dear Friends
After US Fed?s meeting on 30 October, matters relating to bond purchases and extremely low interest rate remained status quo. US Stocks however, dipped after hitting new high. The reaction is not unusual after short selling on good news. Before the good news was announced, the stock markets went up, which means the concluded result was expected by the markets.
Since the Fed?s market withdrwal forenounced in May this year, US stocks have dropped 3 times, conspicuously to rock bottom: 1 time in mid June 2 time end of August 3 time early October. The withdrawal does not happen this time round, but it will definitely happen in time to come. Thus I believe US stocks will repeatedly go up and down under the shadow of market withdrawal influence.

For the short term, US stocks will move independently depending on the performance of invidual listed companies. The local market should have its focus on the Third Plenary Session of the Chinese Communist Party and the the People?s Bank?s money supplies. US Fed will have another meeting in December. It should be the last meeting attended by the incumbent Chairman Bernanke who initiated the Quantitative Easing Monetary Policy (QE) of the US. Morally Bernanke should not simply leave as it is. Thus I am somewhat concern the December meeting might unexpectedly start to withdraw from the markets prior to Bernanke?s departure, and to let him handle the post withdrawal issues.

In December US Republican Party and the Democratic Party will negotiate once again on US national debt ceiling issue. The October 17 agreement was to push back the issue for 3 months Republicans will keep using the debt ceiling issue to force Obama to cut governmental expenditures. In September this year, US financial expenditures were surprisingly in black with some surpluses. I believe this could be the result of the Republicans? past successful automatic deficit reduction budget plan. In fact, if Obama would follow Clinton not spending frivolously, US tax revenue would exceed expenditure with no deficit, and the debt ceiling issue would not have happened.
Awhile ago, the share price of SkyOne Holdings plummeted. Since large numbers of dragon stocks and those Singapore companies with investments in China public listed in Singapore, problems often surface due to relatively poorer corporate governance in China. On the othe hand, there could be some people, reporters in particular, having received money from a 3 party,
purposefully spread unfavourable faked news of a company to let its share price drop, so that the 3 party who pay the money make profit from short selling prior to the faked news. Lately the Chinese Public Security Authorities arrest a Guangzhou New Express (广 州 新 快 报 )reporter suspected of spreading unfavourable faked news of Hong Kong listed Zoomlion (中 联 重 科 ).
How to we tackle this kind of problems?

The only way is to deversify your investments. Be wary of those manipulated dragon stocks. Do not over panic, search into the sources of the news to see if it is from some ones with motives spreading rumours.

NOL has turned around in 3
quarter. The worst senario of freight forwarders should be over.

Spivvy      ( Date: 05-Nov-2013 17:45) Posted: Jialak leeta has spoken. By the way, when is the share consolidation likely expected to be? Leeta is saying by xmas before consolidation to sell if want to. Newbie saying on X-day. Now waiting for Lucky's confirmation to sell signal liao.

 

Agreed, citi's share price tanked post reverse split. But if i'm not wrong, the drop was in-line with other listed financials.

Also agree that reverse stock splits have negative connotations associated with it, due to the fact that these companies are in trouble already in the first place. (Citi still has ALOT of " bad" assets on its books. Hopefully the market recognises that Hankore's fundamentals have not changed.

  At the same time the market can stay irrational longer than one can stay solvent, so like you said, its more preferable to be pleasantly surprised than shocked. 

 

cccx123      ( Date: 05-Nov-2013 19:11) Posted: Citigroup's share price tanked in the aftermath of the reverse split. Very sure there were lots of fund managers participation. If the stock price dips below 6cts we can reopen the old thread le. Been on a downward trend for a week even as ABL and one sky recover, albeit from extremely low bases. But then again, they were trading at multiples of their earnings and NTAs so it is not a fair comparison. Hankore has an NTA of 7.7cts. No reason for it to drop so much unless there are negatively viewed corporate developments such as this reverse split exercise. Prefer to be surprised pleasantly than shocked so I won't sugar coat anything.

 

Yup, i also think that the main thing is to increase institutional shareholder ownership. Which types of institutional shareholders also matter - the best would be long only funds or private equity funds that can add value and credibility to Hankore. 

Share7      ( Date: 05-Nov-2013 18:56) Posted: Interesting perspective. I agree on your overall assessment. HK's FA unchanged. This are all corporate development moves. However past share consolidated companies do not exhibit good returns although most are smallish companies without fund managers participation. If HK can attract major fund managers' participation and high net worth individuals, it may be a different picture. I support....leeete, what say you? As I like to say, look see, look see, and do nothing. But this time, better wait and pray. lol. :) reknab      ( Date: 05-Nov-2013 18:44) Posted: I've been following this forum for a while now, and just signed up to add to the discussion on Hankore. I can understand the stigma and the negative connotations behind a reverse stock split, but my opinion is that we should consider the circumstances and the rationale behind it. For example, in the US market, many reverse stock splits are done as a cosmetic action to avoid delisting. These companies are not financially sound to begin with, and hence we associate reverse stock splits with poor performance, but in my opinion Hankore is doing it from a position of strength.  Hankore has a solid growth story, as many in the forum have recognised, and a stable base with more than half its revenue recurring (and growing). I feel that the most important thing for Hankore now is to be able to raise more money so that it dosent miss out on significant investment opportunities that are popping up in China now. The problem with taking on too much debt (they have ramped up their debt levels significantly over the past year, finance costs up 25% y-o-y) is that this leaves Hankore vulnerable to 1) The inevitable tapering by the Fed and the subsequent rise in interest rates as well as 2) a maturity mismatch/gap between their debt (up to 7 years?) with the time period in which they need to finance their projects (> 20++ years?). Hence an equity infusion is needed, and is in fact prudent in my opinion.  As a penny stock, Hankore has an enormous public float - about 65% from their AR 2013 - and limited institutional ownership. But institutional ownership is important, both in terms of the price discovery process (institutions are, arguably more sophisticated and hence more able to value the stock accurately) as well as a base for stability and to avoid the price swings that have been associated with Hankore. I feel that Hankore is embarking on its first step to make the stock more attractive to institutions by cutting the float (and hence liquidity and volatility) as well as by trying to reduce the stigma associated with penny stocks by cosmetically pushing up its share price. At the end of the day, David recognises that Hankore has to raise equity capital and needs institutional ownership to help to properly value the stock and push its trading multiple up to level more comparable with its peers (and not just through a rights issue, but through a placement with a well known private equity/hedge fund for the signalling effect and to add to its legitimacy with the market.) The pity is that current investors are selling and losing faith in Hankore even when its fundamentals have not changed and when David's decision, in my opinion, is a calculated and well thought out. I'm actually cautiously optimistic on this, and happy that David is trying to raise the share price before an equity infusion and hence not diluting us (and himself) unnecessarily. Love to hear everyone's comments on this - I'm not familiar with local precedents of reverse stock splits and hence cant comment on whether the circumstances of their reverse split is from a position of strength, or from a position of weakness. FYI I'm vested at 6.5 cents

 

Haiz...cut loss as well!

 

Can we stop this at SGM? if can I will be there ,first time .

I have 1700+lots so far .2200+lots this morning. 

 

The picture is very clear....up to individual to decide now..

 

Even euNetwork's stock price tanked in the immediate aftermath of the 50-1 reverse split. It only started to break even recently. would we like to experience that in the hope th stock price will recover? Lol..

cccx123      ( Date: 05-Nov-2013 19:11) Posted: Citigroup's share price tanked in the aftermath of the reverse split. Very sure there were lots of fund managers participation. If the stock price dips below 6cts we can reopen the old thread le. Been on a downward trend for a week even as ABL and one sky recover, albeit from extremely low bases. But then again, they were trading at multiples of their earnings and NTAs so it is not a fair comparison. Hankore has an NTA of 7.7cts. No reason for it to drop so much unless there are negatively viewed corporate developments such as this reverse split exercise. Prefer to be surprised pleasantly than shocked so I won't sugar coat anything.

 

Citigroup's share price tanked in the aftermath of the reverse split. Very sure there were lots of fund managers participation. If the stock price dips below 6cts we can reopen the old thread le. Been on a downward trend for a week even as ABL and one sky recover, albeit from extremely low bases. But then again, they were trading at multiples of their earnings and NTAs so it is not a fair comparison. Hankore has an NTA of 7.7cts. No reason for it to drop so much unless there are negatively viewed corporate developments such as this reverse split exercise. Prefer to be surprised pleasantly than shocked so I won't sugar coat anything.

 

I also agree (& the assessment is what I like/want to read). End of the day, if there is demand, even shares of no profit company can shoot up high high...I'm still vested. Good luck!

Share7      ( Date: 05-Nov-2013 18:56) Posted: Interesting perspective. I agree on your overall assessment. HK's FA unchanged. This are all corporate development moves. However past share consolidated companies do not exhibit good returns although most are smallish companies without fund managers participation. If HK can attract major fund managers' participation and high net worth individuals, it may be a different picture. I support....leeete, what say you? As I like to say, look see, look see, and do nothing. But this time, better wait and pray. lol. :) reknab      ( Date: 05-Nov-2013 18:44) Posted: I've been following this forum for a while now, and just signed up to add to the discussion on Hankore. I can understand the stigma and the negative connotations behind a reverse stock split, but my opinion is that we should consider the circumstances and the rationale behind it. For example, in the US market, many reverse stock splits are done as a cosmetic action to avoid delisting. These companies are not financially sound to begin with, and hence we associate reverse stock splits with poor performance, but in my opinion Hankore is doing it from a position of strength.  Hankore has a solid growth story, as many in the forum have recognised, and a stable base with more than half its revenue recurring (and growing). I feel that the most important thing for Hankore now is to be able to raise more money so that it dosent miss out on significant investment opportunities that are popping up in China now. The problem with taking on too much debt (they have ramped up their debt levels significantly over the past year, finance costs up 25% y-o-y) is that this leaves Hankore vulnerable to 1) The inevitable tapering by the Fed and the subsequent rise in interest rates as well as 2) a maturity mismatch/gap between their debt (up to 7 years?) with the time period in which they need to finance their projects (> 20++ years?). Hence an equity infusion is needed, and is in fact prudent in my opinion.  As a penny stock, Hankore has an enormous public float - about 65% from their AR 2013 - and limited institutional ownership. But institutional ownership is important, both in terms of the price discovery process (institutions are, arguably more sophisticated and hence more able to value the stock accurately) as well as a base for stability and to avoid the price swings that have been associated with Hankore. I feel that Hankore is embarking on its first step to make the stock more attractive to institutions by cutting the float (and hence liquidity and volatility) as well as by trying to reduce the stigma associated with penny stocks by cosmetically pushing up its share price. At the end of the day, David recognises that Hankore has to raise equity capital and needs institutional ownership to help to properly value the stock and push its trading multiple up to level more comparable with its peers (and not just through a rights issue, but through a placement with a well known private equity/hedge fund for the signalling effect and to add to its legitimacy with the market.) The pity is that current investors are selling and losing faith in Hankore even when its fundamentals have not changed and when David's decision, in my opinion, is a calculated and well thought out. I'm actually cautiously optimistic on this, and happy that David is trying to raise the share price before an equity infusion and hence not diluting us (and himself) unnecessarily. Love to hear everyone's comments on this - I'm not familiar with local precedents of reverse stock splits and hence cant comment on whether the circumstances of their reverse split is from a position of strength, or from a position of weakness. FYI I'm vested at 6.5 cents

 

Just one day ,one news it changed from panacea to poison .

Yesterday it's my whole hope ,today ,I try to run away ASAP

What a tragedy it is ,what the fuc*k David is thinking about .

always a han-whore.

My broker just called me to be careful of this whore ,it's first and

only time he called me .I hardly know him .from Kim eng .

 

Interesting perspective. I agree on your overall assessment. HK's FA unchanged. This are all corporate development moves. However past share consolidated companies do not exhibit good returns although most are smallish companies without fund managers participation. If HK can attract major fund managers' participation and high net worth individuals, it may be a different picture. I support....leeete, what say you? As I like to say, look see, look see, and do nothing. But this time, better wait and pray. lol. :)

reknab      ( Date: 05-Nov-2013 18:44) Posted: I've been following this forum for a while now, and just signed up to add to the discussion on Hankore. I can understand the stigma and the negative connotations behind a reverse stock split, but my opinion is that we should consider the circumstances and the rationale behind it. For example, in the US market, many reverse stock splits are done as a cosmetic action to avoid delisting. These companies are not financially sound to begin with, and hence we associate reverse stock splits with poor performance, but in my opinion Hankore is doing it from a position of strength.  Hankore has a solid growth story, as many in the forum have recognised, and a stable base with more than half its revenue recurring (and growing). I feel that the most important thing for Hankore now is to be able to raise more money so that it dosent miss out on significant investment opportunities that are popping up in China now. The problem with taking on too much debt (they have ramped up their debt levels significantly over the past year, finance costs up 25% y-o-y) is that this leaves Hankore vulnerable to 1) The inevitable tapering by the Fed and the subsequent rise in interest rates as well as 2) a maturity mismatch/gap between their debt (up to 7 years?) with the time period in which they need to finance their projects (> 20++ years?). Hence an equity infusion is needed, and is in fact prudent in my opinion.  As a penny stock, Hankore has an enormous public float - about 65% from their AR 2013 - and limited institutional ownership. But institutional ownership is important, both in terms of the price discovery process (institutions are, arguably more sophisticated and hence more able to value the stock accurately) as well as a base for stability and to avoid the price swings that have been associated with Hankore. I feel that Hankore is embarking on its first step to make the stock more attractive to institutions by cutting the float (and hence liquidity and volatility) as well as by trying to reduce the stigma associated with penny stocks by cosmetically pushing up its share price. At the end of the day, David recognises that Hankore has to raise equity capital and needs institutional ownership to help to properly value the stock and push its trading multiple up to level more comparable with its peers (and not just through a rights issue, but through a placement with a well known private equity/hedge fund for the signalling effect and to add to its legitimacy with the market.) The pity is that current investors are selling and losing faith in Hankore even when its fundamentals have not changed and when David's decision, in my opinion, is a calculated and well thought out. I'm actually cautiously optimistic on this, and happy that David is trying to raise the share price before an equity infusion and hence not diluting us (and himself) unnecessarily. Love to hear everyone's comments on this - I'm not familiar with local precedents of reverse stock splits and hence cant comment on whether the circumstances of their reverse split is from a position of strength, or from a position of weakness. FYI I'm vested at 6.5 cents

 

Cut loss..

trade with care..

 

yes, I do not know of good share consolidation example but bad example plenty. Then again, most of the share consolidation did not have good sponsors or good prospect. HK may have got the proposal after the AGM/SGM sent out and definitely they couldn't reveal at GM, similar to last SGM for purchase of JT, they didn't mention of share placement to Asdew. But definitely they have something line up with big money to invest. I still think it is likely placement rather than rights as David also pocket not so big otherwise he would have delisted HK. Someone (insider) told me that during SGM (JT). If you have a better baby, go for it. But if not, look see look see first lah. FY14 1Q results is very important for me to gauge how strong will HK be. Unless results so so and they tell good story which David is quite good (former journalist). I am looking elsewhere to see can find another meiren mei (baby stage - very difficult to spot). If cannot, see how long I can tong. CE

leeeta      ( Date: 05-Nov-2013 17:29) Posted: just found some time to update...been busy the whole day. There was no discussion of share consolidation during the AGM/SGM. I am unhappy for three reasons... 1. firstly we just had the AGM/SGM   and why was this not discussed then? Was this deliberated ? or was there an event that happened very very recently (after the AGM/SGM) that led David to conclude that share consolidation is a better option (cant get big funds in? or is this a requirement by big funds becoz of the heavy float?). If its deliberated then this is sickening, cant trust them anymore. Yes the prices tanked but so did many of the pennies and i dont think many is aware of their plans. Take a look at YHM, Enersave, Mirach, Albedo, amplefield , SHY, innopac etc..all down and down. 2. during the last two AGM/SGMs, shareholders have reminded the management against raising of rights and share consolidation....now they are not listening to the attendees anymore..they are now tuning their ears to the big funds..really kanasai. 3. Share consolidation exercise on the short term is a pain for shareholders .. yes, we have examples like Swing, Abterra, Lantro that price tanked after consolidation and never recovered.. however we also have examples where price recovered and trend up a bit ie EuNetwork....problem with these companies is that there is no sexy growth story unlike HKs and in that magnitude.   Short term , HK's price will be seen floating between 6 - 7cts hopefully, with good 1stQ result, some tongers can escape if they want to give up. Normally BB who wants to escape will also move the share up..so grab your chance to sell if you dont want to invest anymore. Which means by Christmas.. prior consolidation...no more double digit and multibagging liao..that will come..but later liao..next year perhaps. This is my frustration. Long term wise, this is still a good stock..and can head up and shoot past 1 dollar post consolidation once the selling is done due to so many good factors as already mentioned in this forum...no doubt about it..question is when? Moving from penny to 2nd liner stock is a good thing to attract reputable funds who wants a pie into China's water treatment market..what more a company that will have their base in Singapore and growing pies in China. The growth story is real and is already in motion. LT story is sweet and if managed well, price appreciation is guaranteed and big funds in will surely press David for dividends..ST is not. Take a look at SinoGrandness..share split but price also up..will this happen in the future with HK from 10:1 then share split much later and price go up becos of solid growth? Limitless possibilities ..if we only know of their plans. Multi bagging can still happen however not in the magnitude i expect anymore.  For those who wants to sell, pls do at whatever level..to limit your losses or protect your gains/capital when the opportune time comes..you can always re-enter post consolidation. Good luck and CE. To each his own.

 

I've been following this forum for a while now, and just signed up to add to the discussion on Hankore.

I can understand the stigma and the negative connotations behind a reverse stock split, but my opinion is that we should consider the circumstances and the rationale behind it. For example, in the US market, many reverse stock splits are done as a cosmetic action to avoid delisting. These companies are not financially sound to begin with, and hence we associate reverse stock splits with poor performance, but in my opinion Hankore is doing it from a position of strength. 

Hankore has a solid growth story, as many in the forum have recognised, and a stable base with more than half its revenue recurring (and growing). I feel that the most important thing for Hankore now is to be able to raise more money so that it dosent miss out on significant investment opportunities that are popping up in China now. The problem with taking on too much debt (they have ramped up their debt levels significantly over the past year, finance costs up 25% y-o-y) is that this leaves Hankore vulnerable to 1) The inevitable tapering by the Fed and the subsequent rise in interest rates as well as 2) a maturity mismatch/gap between their debt (up to 7 years?) with the time period in which they need to finance their projects (> 20++ years?). Hence an equity infusion is needed, and is in fact prudent in my opinion. 

As a penny stock, Hankore has an enormous public float - about 65% from their AR 2013 - and limited institutional ownership. But institutional ownership is important, both in terms of the price discovery process (institutions are, arguably more sophisticated and hence more able to value the stock accurately) as well as a base for stability and to avoid the price swings that have been associated with Hankore. I feel that Hankore is embarking on its first step to make the stock more attractive to institutions by cutting the float (and hence liquidity and volatility) as well as by trying to reduce the stigma associated with penny stocks by cosmetically pushing up its share price. At the end of the day, David recognises that Hankore has to raise equity capital and needs institutional ownership to help to properly value the stock and push its trading multiple up to level more comparable with its peers (and not just through a rights issue, but through a placement with a well known private equity/hedge fund for the signalling effect and to add to its legitimacy with the market.) The pity is that current investors are selling and losing faith in Hankore even when its fundamentals have not changed and when David's decision, in my opinion, is a calculated and well thought out. I'm actually cautiously optimistic on this, and happy that David is trying to raise the share price before an equity infusion and hence not diluting us (and himself) unnecessarily.

Love to hear everyone's comments on this - I'm not familiar with local precedents of reverse stock splits and hence cant comment on whether the circumstances of their reverse split is from a position of strength, or from a position of weakness.

FYI I'm vested at 6.5 cents 

 

Guys, stay calm and keep cool if you already pay for the shares and got paper loss. Wait for next week after China's 3rd plenary announcements and HK's FY15 1Q results out on 14 Nov. If results in line with all the high growth story rhetoric, then HK MAY gap up.Of course CE, no guarantee hah. Make your own decisions.