News

China Innovative Finance (0412) bubble
Webb-site.com, 26-Sep-2016
Hao Tian Development (0474) has confirmed our view by dumping 9.06% of CIFG at a 61.9% discount, still well above the net tangible asset value of $0.099. CIFG should trade below NTAV due to its appalling governance and membership of what we call the "Chung Nam Network". The purported profits of its leasing division are largely illusory and depend heavily on 1 customer in which CIFG has invested. HTD has also been allowed by HKEX to skirt the Listing Rules on corporate transactions.
Legislators visit ICAC and the Three Rickies
ICAC, 23-Sep-2016
...and the current ICAC Commissioner Simon Peh "reiterated that ceasing the acting arrangement of an individual officer [Rebecca Li] had absolutely nothing to do with any investigations [of C Y Leung's payments from UGL]". This is getting UGLy.
C.P. Lotus (0121): Li Wen Hai is our Executive Chairman but not Chairman
Company announcement, 19-Sep-2016
This follows a complaint by Webb-site that the Articles of Association only allow for one Chairman. The "One Company, Two Chairmen" formula does not work.
Zall (2098): we have two Co-chairmen but our articles don't allow it
Company announcement, 14-Sep-2016
Zall clarifies that only one of them is responsible for the legal duties of Chairman, but they will try to amend the Articles. This follows a complaint from Webb-site that appointing two Chairman was ultra vires. It's the least of their problems though - the stock is in a bubble, in our view.
HKICPA fines Ernst & Young and partner Stephen Hui Kin Fai HK$30k
HKICPA, 12-Sep-2016
They doesn't name the listed firm involved, but Webb-site can tell you it was New Century Group HK Ltd (0234), in relation to the sale of a hotel in Batam, Indonesia.
Jewellery customer charged with HK$30k bribe for refund of diamond ring
ICAC, 8-Sep-2016
Ng Yuk Keung is the Finance Director of Kingsoft (3888) and INED of 3 other listed companies: Sany Heavy Equipment (0631), E-Commodities (formerly Winsway Enterprises, 1733) and Zhongsheng (0881).
Submission to SFC-HKEX consultation on listing regulation
Webb-site.com, 6-Sep-2016
These are our views on SFC-HKEX proposals to reform regulation of listings and listed companies. If you are an investor who cares about the future of HK's markets, please submit your support. The proposals are better than the status quo, but a political compromise on the 2003 Expert Group recommendation to transfer regulation to the SFC, and that should be Plan B.
Union Asia (8173): unauthorised disposal of property
Company announcement, 4-Sep-2016
The company claims that its subsidiary surrendered a property for S$5.62m in April and the company didn't know until 2-Sep.

Our stories

China Innovative Finance (0412) bubble
Hao Tian Development (0474) has confirmed our view by dumping 9.06% of CIFG at a 61.9% discount, still well above the net tangible asset value of $0.099. CIFG should trade below NTAV due to its appalling governance and membership of what we call the "Chung Nam Network". The purported profits of its leasing division are largely illusory and depend heavily on 1 customer in which CIFG has invested. HTD has also been allowed by HKEX to skirt the Listing Rules on corporate transactions. (26-Sep-2016)
Submission to SFC-HKEX consultation on listing regulation
These are our views on SFC-HKEX proposals to reform regulation of listings and listed companies. If you are an investor who cares about the future of HK's markets, please submit your support. The proposals are better than the status quo, but a political compromise on the 2003 Expert Group recommendation to transfer regulation to the SFC, and that should be Plan B. (6-Sep-2016)
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)

Other news

Legislators visit ICAC and the Three Rickies
ICAC, 23-Sep-2016
...and the current ICAC Commissioner Simon Peh "reiterated that ceasing the acting arrangement of an individual officer [Rebecca Li] had absolutely nothing to do with any investigations [of C Y Leung's payments from UGL]". This is getting UGLy.
C.P. Lotus (0121): Li Wen Hai is our Executive Chairman but not Chairman
Company announcement, 19-Sep-2016
This follows a complaint by Webb-site that the Articles of Association only allow for one Chairman. The "One Company, Two Chairmen" formula does not work.
Zall (2098): we have two Co-chairmen but our articles don't allow it
Company announcement, 14-Sep-2016
Zall clarifies that only one of them is responsible for the legal duties of Chairman, but they will try to amend the Articles. This follows a complaint from Webb-site that appointing two Chairman was ultra vires. It's the least of their problems though - the stock is in a bubble, in our view.
HKICPA fines Ernst & Young and partner Stephen Hui Kin Fai HK$30k
HKICPA, 12-Sep-2016
They doesn't name the listed firm involved, but Webb-site can tell you it was New Century Group HK Ltd (0234), in relation to the sale of a hotel in Batam, Indonesia.
Jewellery customer charged with HK$30k bribe for refund of diamond ring
ICAC, 8-Sep-2016
Ng Yuk Keung is the Finance Director of Kingsoft (3888) and INED of 3 other listed companies: Sany Heavy Equipment (0631), E-Commodities (formerly Winsway Enterprises, 1733) and Zhongsheng (0881).
Previously on Webb-site.com
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