News

CEEI (0986) sells China Jicheng (1027), buys Luen Wong (8217)
Company announcement, 18-Aug-2016
What it doesn't say: CEEI has breached Listing Rules by failing to obtain shareholders' approval in advance of Major Transactions and by failing to announce them for 4 weeks. Each stock is the subject of SFC concentration warnings. We calculate that the purchase of Luen Wong shares is at a P/B of 321 and a P/E of 861. CEEI says the deal is "fair and reasonable", "a good investment opportunity" and "an attractive investment which will provide satisfactory return".
A sordid electoral affair
Webb-site.com, 17-Aug-2016
The HK Government, via its Electoral Affairs Commission, has tarnished HK's reputation for free and fair geographic elections for half of its Legislative Council, just to exclude a few candidates who were previously on the political fringe. There is nothing inconsistent between pledging to uphold the constitution and seeking to change it, and the Government now risks the courts overturning the election results. We also explain the fragmentation caused by HK's version of the party list system which has now reached epic proportions.
Concentration warning in Season Pacific (8127)
SFC, 12-Aug-2016
The top 20 shareholders have 99.9% of the company at 1-Aug-2016.
Concentration warning in Wang On Properties (1243)
SFC, 9-Aug-2016
20 shareholders own 97.24% of the company.
Union Asia Ent (8173): Mr Yeung Wing Yee breaches Takeovers Code
Company announcement, 8-Aug-2016
He's bought 32.87%, more than the 30% bid trigger, and his "legal adviser" has confirmed that he has no intention to make a general offer. The SFC is on the case.
Hao Tian (0474) buys stockbroker Paul Securities Ltd
Company announcement, 8-Aug-2016
The price mentioned in the annual report was net asset value plus HK$11m.
Chang Pui Yin & others v Bank of Singapore Ltd
HK Court of First Instance, 8-Aug-2016
The elderly couple win their case against the Bank (formerly ING Asia Private Bank) for accumulator losses. Damages will be assessed separately. The bank and the relationship manager, Yvetti Li Chau Kwan-siu, are heavily criticised in this judgment. In our view, the SFC should now take action against them.
MMT finds no insider dealing in Warderly shares
SFC, 5-Aug-2016
We don't disagree with the finding, but we annotate errors in the report regarding the outcome of an open offer. The MMT finds that when the duo sold shares in 2007, the information was no longer material, as the company was publicly known to be in difficulty and the stock was trading on its shell potential. Also, the alleged loss avoided becomes a profit avoided if the open offer had been taken up. Incidentally, Warderly is now known as Fullshare (0607) and in our view it is a bubble stock on 9x NAV, part of which is shares in another bubble stock, Zall (2098) which trades around 4x NAV.
Dining Concepts (8056): allotments and concentration warningCCASS allocations
Company announcement, 4-Aug-2016
The top 25 placees have 94.75% of the float.
HKSAR v Mark Edward Kirkham
HK Court of First Instance, 29-Jul-2016
Insurance broker Mark Kirkham wins his appeal.
Tech Pro (3823) crashes 86.3%: we told you so
Webb-site.com, 28-Jul-2016
In our article of 24-Sep-2015, we pointed to 3 bubbles, 2 of which have now burst: L & A (8195) and Tech Pro (3823). The remaining one is umbrella-maker China Jicheng (1027) which has net tangible assets at 31-Dec-2015 of about HK$0.0067 per share (post-split), so it has about 97% downside from today's closing price of $0.224.
SEHK may delist China Oriental (0581) in 6 months
SEHK, 27-Jul-2016
This threat can only hurt the public shareholders who own 7.9% and have had their investment frozen since 29-Apr-2014 on the grounds that the float is too small. At the suspended price, the public float is worth HK$269m, larger than in many other listed companies. Ironically, SEHK blames the company for "depriving shareholders of trading their shares". Look in the mirror, SEHK, it's your rule. Scrap it.

Our stories

A sordid electoral affair
The HK Government, via its Electoral Affairs Commission, has tarnished HK's reputation for free and fair geographic elections for half of its Legislative Council, just to exclude a few candidates who were previously on the political fringe. There is nothing inconsistent between pledging to uphold the constitution and seeking to change it, and the Government now risks the courts overturning the election results. We also explain the fragmentation caused by HK's version of the party list system which has now reached epic proportions. (17-Aug-2016)
Tech Pro (3823) crashes 86.3%: we told you so
In our article of 24-Sep-2015, we pointed to 3 bubbles, 2 of which have now burst: L & A (8195) and Tech Pro (3823). The remaining one is umbrella-maker China Jicheng (1027) which has net tangible assets at 31-Dec-2015 of about HK$0.0067 per share (post-split), so it has about 97% downside from today's closing price of $0.224. (28-Jul-2016)
Submission to Public Engagement Exercise on Retirement Protection
We call for abolition of non-means-tested schemes, staggered subsidies for public healthcare and a deployment of the savings on a higher socal safety net and better healthcare. HK can't pursue a universal handout without breaching the Basic Law, and even if it could, the Laffer Curve may make it unsustainable as taxable profits and earnings would shift away. Finally, the MPF is a costly interventionist failure that should be scrapped, and if it is not, then LSP must be phased out to allow full portability of MPF assets. (21-Jun-2016)
SEHK tackles bonus issues, misses the obvious
The Stock Exchange, in a guidance letter tonight, says it will reject listing of bonus issues of 200% or more, because they tie up too much of the float between the ex-date and distribution date. They propose stock splits as an alternative, but they omit the faster and better way to reduce board lot value, which HKEx itself used in 2008. (27-Apr-2016)
HKEx cuts hit corporate governance of whole market
A circular slipped out by an HKEx subsidiary, HKSCC, will slash the effective voting window for general meetings, reducing the participation of institutional investors in important decisions such as acquisitions, connected transactions and dilutive share issues. We urge HKEx to rethink this deeply damaging move. (18-Apr-2016)
Ticket markets and Rugby Sevens finances
Put down your beer jug and take a look at two inter-related problems: the almost non-existent secondary market for event tickets in HK due to an anti-free-market law, and the finances of the Rugby Sevens, which is hoarding cash, underpaying for the HK Stadium, and expecting taxpayers to build another one for at least HK$33.5bn. (10-Apr-2016)
Submission on Electronic Road Pricing
Speak out! Put market forces to work on the roads. Read our response and then tell the Government whether you agree or not. Consultation ends this Friday, 18-Mar-2016. (12-Mar-2016)
One registration, two companies
Webb-site reveals how a UK company registered in HK and then swapped names with another one, which illegally kept the HK registration. That company is now a subsidiary of UK-listed Cobham plc. (7-Mar-2016)
Preventing cash shells
Webb-site proposes a new Listing Rule to prevent cash shells. The Cash Shell Test introduces equity discipline for existing companies and provides clarity for those proposing transactions and fund-raising. It should be welcomed by investors, regulators, issuers and their advisers. HKEx needs to build a proper sanitation system for this village rather than dig a new cesspit. (3-Mar-2016)
Lerado settlement could be worth $0.066 per share
Lerado has settled its dispute with the buyer of its core business, but fails to state what the positive impact will be on its income statement and net asset value. Webb-site estimates that it will add $255m of profit or $0.066 per share to NAV. (2-Mar-2016)
Tom Lee Music practices not fair play
We look behind an ICAC prosecution of music teachers and find bad practices at the tax-exempt Tom Lee Music Foundation, which requires its teachers to exclusively push products for Tom Lee Music Company. (28-Feb-2016)

Other news

CEEI (0986) sells China Jicheng (1027), buys Luen Wong (8217)
Company announcement, 18-Aug-2016
What it doesn't say: CEEI has breached Listing Rules by failing to obtain shareholders' approval in advance of Major Transactions and by failing to announce them for 4 weeks. Each stock is the subject of SFC concentration warnings. We calculate that the purchase of Luen Wong shares is at a P/B of 321 and a P/E of 861. CEEI says the deal is "fair and reasonable", "a good investment opportunity" and "an attractive investment which will provide satisfactory return".
Concentration warning in Season Pacific (8127)
SFC, 12-Aug-2016
The top 20 shareholders have 99.9% of the company at 1-Aug-2016.
Concentration warning in Wang On Properties (1243)
SFC, 9-Aug-2016
20 shareholders own 97.24% of the company.
Union Asia Ent (8173): Mr Yeung Wing Yee breaches Takeovers Code
Company announcement, 8-Aug-2016
He's bought 32.87%, more than the 30% bid trigger, and his "legal adviser" has confirmed that he has no intention to make a general offer. The SFC is on the case.
Hao Tian (0474) buys stockbroker Paul Securities Ltd
Company announcement, 8-Aug-2016
The price mentioned in the annual report was net asset value plus HK$11m.
Chang Pui Yin & others v Bank of Singapore Ltd
HK Court of First Instance, 8-Aug-2016
The elderly couple win their case against the Bank (formerly ING Asia Private Bank) for accumulator losses. Damages will be assessed separately. The bank and the relationship manager, Yvetti Li Chau Kwan-siu, are heavily criticised in this judgment. In our view, the SFC should now take action against them.
MMT finds no insider dealing in Warderly shares
SFC, 5-Aug-2016
We don't disagree with the finding, but we annotate errors in the report regarding the outcome of an open offer. The MMT finds that when the duo sold shares in 2007, the information was no longer material, as the company was publicly known to be in difficulty and the stock was trading on its shell potential. Also, the alleged loss avoided becomes a profit avoided if the open offer had been taken up. Incidentally, Warderly is now known as Fullshare (0607) and in our view it is a bubble stock on 9x NAV, part of which is shares in another bubble stock, Zall (2098) which trades around 4x NAV.
Previously on Webb-site.com
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