Even after today's plunge, Kingston is trading at 13.2x net tangible assets of $0.508 per share, 70.8x trailing earnings, and is heavily dependent on low-cost loans from its majority shareholder. Don't bet on that continuing. We also look at the extent of its margin lending to controlling shareholders of large numbers of other listed companies.

Kingston (1031): things you should know
30 January 2018

There's a few things that investors should be aware of when considering Kingston Financial Group Ltd (Kingston, 1031). The stock fell 16.61% today to $6.73, following last night's concentration warning from the SFC, that the top 20 holders have 91.653% of the shares as at 8-Jan-2018. That warning was long-overdue, in our view.

The family wealth appears to originate from Mr Lee's Macau VIP room operations. According to a 2005 press release, Mr Lee was involved in the Macau casino industry since 1990 and founded the "Gold Club" VIP rooms at the Lisboa Casino, before which he was a "consultant for Caesar's Palace Las Vegas". In 2005, Kingston called Mr Lee "the leading VIP Room operator in Macau". Perhaps this promises an endless stream of financial support with low-cost loans to the listed company via Mrs Chu's Kingston Finance, but we wouldn't bet on it.

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