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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Teller, The Great Manipulator Of HEXP

Teller, The Great Manipulator Of HEXP

+10
fireshelter
Ryan Hudson
worthiness
ifenny
Rifanmoh
Chinwi
nishjaya
Teller
stockback
Miss-Sangeetha
14 posters

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21Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 8:46 am

Rifanmoh


Equity Analytic
Equity Analytic
@Miss-Sangeetha wrote:
@Rifanmoh wrote:
@Miss-Sangeetha wrote:
@Teller wrote:Absolutely correct stock back, where is the Bartleet here. We couldn't see.
Think logically miss Sangeetha, I agree HAYleys owns  around 65℅. So do you think they can play what ever they like?  It's not like that.
Think based on accounting principles and Sri Lankan accounting standards.  
No need to do much justification with you . You will see very soon HEXP above 120/_ levels.
If it doesn't happen I will not write in this forum.  I know the secret here .
GL
This is Hayleys internal transfer not performance wise gain or outside sale, through this transaction they can increase the net asset value of both ALUMEX PLC and HEXP in enlarged amount. Here they are increasing their own asset value themselves in their books of accounts through this transaction, this is mere mirage.
Reality will come sooner than later, similar to COCR prediction of above Rs.110/- share price now COCR trading at Rs53.50.
Dear Sangeetha, it seems you don't understand how the accounting works. Why do you say NA of ALUMEX also will increase because of this transaction??

That is typing error, I mentioned the ALUMEX fixed asset / Land asset with inflated value determine by same directors or common directors in both sides (buyer and seller)
Whatever the amount ALUMEX paid to HEXP on this land purchase Will never ever increase the NA of ALUMEX. This is a arms length transaction where real movement of cash and property have effected between both the seller and buyer. ALUM didn't get the land for free for it to increase the NV. 


ALUM could have used Rs. 420 mn plus stampduty as cash/Borrowing or combination of both in order to settle the transaction. Think of simple double entry now. 


In line with Hayleys Group accounting policy, If ALUM decides to maintain this aasset at revalued amount, then they will revalue the land every three year or every year to update the BS. This will result in revaluation surplus and therefore increase NA by a small amount. This can happen only from at the end of 2017/18. 


HEXP have been holding this property in the B/S at cost value - the price they paid to buy the asset long time back. Now this profit is a real capital gain due to realisation of market value of the asset. There is no way you can say the price has been decided by BOD. The valuation has been done by independent valuer. In fact, they have been disclosing the market value of this property in every AR report in the past. Please download few of them and check. 


Don't worry about common directors in HEXP and ALUM. It's ultimately directors of Hayleys who would have decided to execute this transaction. 

22Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 9:30 am

Rifanmoh


Equity Analytic
Equity Analytic
@ifenny wrote:My opinion is : HEXP price can go up as a result of manipulation and will come down.
But if someone wants to invest on this share based on fundamentals, they should ignore temp increase of NAV due to Land transaction and wait to see what is HEXP management is intended to do with that money. What if they decided to settle some debts currently in the balance sheet ? (eg Rs. 89,288,000 of Interesting bearing loans) and pay a reasonable one time dividend (let's say Rs.5 per share x 8,000,000 = Rs. 40,000,000) ? There will be temp hike in the price, but it will come lower than it used to be in next quarter/year as it's NAV will be reduced again.
Technically, this is a internal transfer of assets within the same group of Hayl where there will be no immediate revenue generations for any of the parties involved in (HAYL, HEXP or ALUM). 

Other views/opinions are welcome as I see this topic as a very good learning opportunity on stock valuation.
Dear Ifenny, 

In contrast to your view. if an investor looks at fundamentals, he should invest immediately before price moves beyond a particular level. And if an investor fears the possible manipulation, then he should stay away from this stock.

It seems you understood that HEXP has generated cash of Rs. 420 mn but you don't understand the generation of profit on HEXP side.

The profit of Rs. 200 mn + has been realised in the accounts of HEXP. You will witness this in a note in Q3 accounts that will be published in Feb and you will see the profit in the income statement directly in Q4. As a significant post balance sheet transaction as at 31st Dec 16, they will definitely disclose this profit at least in the notes for Q3 financials.

This profit will be an unrealized profit for Hayleys only as the buyers and sellers are subsidiaries so the inter subsidiary transactions will be eliminated in consolidation of accounts. So You should not expect Hayleys PlC to show such a profit in their financials.

Why do you worry about what the management will do with the cash??. If they pay off debt. the company becomes debt free and can avoid interest cost and improve profit immediately. Even after paying off the debt, they will still be left with huge cash balance.

If they pay a one off dividend, isn't it good for shareholders??

If they reinvest the cash in the business, isn't it again good for shareholders?. Won't the future profit increase YOY with reasonable certainty due to enlarged organization??

23Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 4:36 pm

Teller


Moderator
Moderator
Really interesting discussions are going on. Thanks Sangeetha for opening the thread. now no one can hide the HEXP hidden value. We can see Rs
100 break out with in days or two.

24Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 5:10 pm

Chinwi


Associate Director - Equity Analytics
Associate Director - Equity Analytics


Both Rifanmoh and ifenny are doing good analysis.
Thank you.


@Rifanmoh wrote:Why do you worry about what the management will do with the cash??. If they pay off debt. the company becomes debt free and can avoid interest cost and improve profit immediately. Even after paying off the debt, they will still be left with huge cash balance.

If they pay a one off dividend, isn't it good for shareholders??


I think there is something to concern.  
If trading price increased beyond NAV due to millions in cash ,  as emphasized by someone in another thread ,   what will happen if they drain that cash by giving a big dividend ?  The share should  shrink back to original level.

That is why we should think about real cash in books and trading price especially when a company has considerably higher cash portion in assets.  If trading price go over the real asset level then we may steps into risk zone.  

I saw many people evaluating JKH Warrant prices time to time using various accepted formulas but what happened at the end?

Zero debt is also not 100% good if interest rates are reasonably low.

25Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 5:53 pm

Miss-Sangeetha


Moderator
Moderator
Common directors mean not healthy bargaining in this transaction, all coming in under Hayleys purview, and so called independent assessment/ valuation also question mark, appointed by whom or Puppet of whom ?.

Compare to the surrounding place land value, this transaction of land value is extra ordinary high value with huge difference, any how this is Haleys internal decision because they can reach any amount of value and buyers and sellers are same persons under within the Hayleys purview and sharing common directors.

Due to this transaction Hayleys ALUMEX PLC’s total Fixed Asset /land asset value as well as Hayleys HEXP so called profit in land sale of HEXP also increasing in inflated value that is two mangoes in one stone without any efforts and simple way of transaction

Some are even talking about one off dividend payment to share holders from this land sale proceeds

Any prudent concept following accountant or board of directors won’t allow the land sale proceeds to distribute as dividend with considerable proportion of land sale proceeds.

Hayleys ALUMEX PLC’s 420 Million going to be transferred to Hayleys HEXP’s Land disposal account but how sincerely they are going to spend on investment from this land sales proceeds is an another question mark, in the middle of incoming news of right issue of HEXP within three months is an another doldrums. If this right issue talk of HEXP is true, then this transaction will greatly helpful to them.    

26Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 6:30 pm

Rifanmoh


Equity Analytic
Equity Analytic
@Miss-Sangeetha wrote:Common directors mean not healthy bargaining in this transaction, all coming in under Hayleys purview, and so called independent assessment/ valuation also question mark, appointed by whom or Puppet of whom ?.

Compare to the surrounding place land value, this transaction of land value is extra ordinary high value with huge difference, any how this is Haleys internal decision because they can reach any amount of value and buyers and sellers are same persons under within the Hayleys purview and sharing common directors.

Due to this transaction Hayleys ALUMEX PLC’s total Fixed Asset /land asset value as well as Hayleys HEXP so called profit in land sale of HEXP also increasing in inflated value that is two mangoes in one stone without any efforts and simple way of transaction

Some are even talking about one off dividend payment to share holders from this land sale proceeds

Any prudent concept following accountant or board of directors won’t allow the land sale proceeds to distribute as dividend with considerable proportion of land sale proceeds.

Hayleys ALUMEX PLC’s 420 Million going to be transferred to Hayleys HEXP’s Land disposal account but how sincerely they are going to spend on investment from this land sales proceeds is an another question mark, in the middle of incoming news of right issue of HEXP within three months is an another doldrums. If this right issue talk of HEXP is true, then this transaction will greatly helpful to them.    
Because of this transaction, Hayles PLC's asset value or profit will never increase even by a cent. So there is ultimately no benefit to Hayleys. So how two mangoes in one stone?


If the price HEXP got for its land is considerably higher than surrounding land value, isn't it good for HEXP?? Higher the price higher the profit. 


I discussed the possibility of one off dividend as the least possible option to do with the cash profit of Rs. 200 Mn +. If the Board has no feasible investment opportunities, then they must give it to shareholders as dividends. If Hayleys, the parent, is in need of cash, then you can't eliminate the chance of one off dividend.


But the Board has clearly mentioned  in the related party transaction note released recently, that they have an investment opportunity to use the cash on. 

27Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 6:49 pm

Rifanmoh


Equity Analytic
Equity Analytic
@Chinwi wrote:

Both Rifanmoh and ifenny are doing good analysis.
Thank you.


@Rifanmoh wrote:Why do you worry about what the management will do with the cash??. If they pay off debt. the company becomes debt free and can avoid interest cost and improve profit immediately. Even after paying off the debt, they will still be left with huge cash balance.

If they pay a one off dividend, isn't it good for shareholders??


I think there is something to concern.  
If trading price increased beyond NAV due to millions in cash ,  as emphasized by someone in another thread ,   what will happen if they drain that cash by giving a big dividend ?  The share should  shrink back to original level.

That is why we should think about real cash in books and trading price especially when a company has considerably higher cash portion in assets.  If trading price go over the real asset level then we may steps into risk zone.  

I saw many people evaluating JKH Warrant prices time to time using various accepted formulas but what happened at the end?

Zero debt is also not 100% good if interest rates are reasonably low.
Could see your level of experience in your view. 

It's obvious that the share price will go back to its original value after the possible one off dividend. But one should not miss to see the point that the shareholders any way will get the price difference paid as dividend. So no loss to the shareholders. 

This possible one off dividend is not comparable with share warrants. Here all shareholders are treated equally. 

The Board will decide whether to pay off the debt, only if it's in the best interest of the company. If they think the debt is cheap now, then they will hold on to it. 

Remember that the interest rates at all time highs now considering past few years.

28Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 8:47 pm

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Well, if the loan had been taken sometimes back with fixed interest rate (not variable) the rate should have been very low comparing to that of current.

29Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sat Jan 14, 2017 9:20 pm

Rifanmoh


Equity Analytic
Equity Analytic
The borrowing of Rs. 89 Mn something is entirely short term loans most of which are O/D from HNB at a rate of LIBOR+4.25%. This variable rate doesn't look so cheap to hold on while such a cash surplus is in hand. Note that interest expenses for the half year was around Rs. 4 Mn which is around 49% of the operating profit. It's a viable decision to settle the loan fully. By this the PAT will increase by atleast 11%.

I repeat, 

The Board will decide whether to pay off the debt, only if it's in the best interest of the company. If they think the debt is cheap now, then they will hold on to it. 

30Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sun Jan 15, 2017 10:50 pm

Miss-Sangeetha

Miss-Sangeetha
Moderator
Moderator
@Teller wrote:Really interesting discussions are going on. Thanks Sangeetha for opening the thread. now no  one can hide the HEXP hidden value. We can see Rs
100 break out with  in days or two.

 If your left hand transferred 420 Million to your right hand, will you beat the drum as a very good transaction with huge profit? What is the purpose that the HEXP mentioned honestly about the word “subsidiary companies of Hayleys” and “common directors” in their announcements?  Your PV inner system possibly fabricated storey and how many peoples in the world accessible to your PV inner bullish?

Earlier when The Capital Trust dump JKHW00023 on retails head or Acuity stock brokers dump ALHP on retailers head or even your Bartleet stockers dump HEXP at 96, Have they claimed their responsibility? Or were their Name in company’s first ten share holders list? They had used only third party’s account to dump on others head

I reiterate or reaffirm any prudent concept following accountant or board of directors won’t allow the land sale proceeds to distribute as dividend with considerable proportion of land sale proceeds.

No point in arguing with fake recently opened ID profile with zero or one, two reputation point and less than 20 post, they are coming here for the course of HEXP and disappear or reborn with new ID profile after the manipulation of HEXP.

31Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Sun Jan 15, 2017 11:44 pm

Rifanmoh


Equity Analytic
Equity Analytic
Such a negative mind you have Sangeetha. I honestly don't know if any manipulation were done by any members in the past. 

But I am looking only at the current potential of this stock and I have explained how in my every reply above. You might point out if there were any misleading information. But it seems you couldn't. So that you come with a paint fake IDs.

Since you have no any values placed at this stock, I wonder why you waste so much time on this topic.

I am new to this forum so my statistics will be in line with that. 

God bless you.

32Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Mon Jan 16, 2017 12:05 am

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Rifanmoh wrote:
@Chinwi wrote:



I think there is something to concern.  
If trading price increased beyond NAV due to millions in cash ,  as emphasized by someone in another thread ,   what will happen if they drain that cash by giving a big dividend ?  The share should  shrink back to original level.

That is why we should think about real cash in books and trading price especially when a company has considerably higher cash portion in assets.  If trading price go over the real asset level then we may steps into risk zone.  

Could see your level of experience in your view. 

It's obvious that the share price will go back to its original value after the possible one off dividend. But one should not miss to see the point that the shareholders any way will get the price difference paid as dividend. So no loss to the shareholders. 


Wrong or you did not get my idea.

I tried to say there should be no premium in trading price for amount of cash it has.

if not,  dividend < price difference  = loss

33Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Mon Jan 16, 2017 12:30 am

Rifanmoh


Equity Analytic
Equity Analytic
@Chinwi wrote:
@Rifanmoh wrote:
@Chinwi wrote:



I think there is something to concern.  
If trading price increased beyond NAV due to millions in cash ,  as emphasized by someone in another thread ,   what will happen if they drain that cash by giving a big dividend ?  The share should  shrink back to original level.

That is why we should think about real cash in books and trading price especially when a company has considerably higher cash portion in assets.  If trading price go over the real asset level then we may steps into risk zone.  

Could see your level of experience in your view. 

It's obvious that the share price will go back to its original value after the possible one off dividend. But one should not miss to see the point that the shareholders any way will get the price difference paid as dividend. So no loss to the shareholders. 


Wrong or you did not get my idea.

I tried to say there should be no premium in trading price for amount of cash it has.

if not,  dividend < price difference  = loss
My point was based on the profit earned that's about to be published. Not the cash balance. 

To put it simple, the shareholders' wealth has increased by Rs. 25 per share because of the cash profit Rs. 200mn + generated. If the information on this profit was not already absorbed into the last Tuesday price, then the share price should go up approximately by this Rs. 25.

34Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Thu Jan 19, 2017 2:35 pm

Miss-Sangeetha

Miss-Sangeetha
Moderator
Moderator
This is our Honorable Teller said on July 27, year 2016

Teller, The Great Manipulator Of HEXP - Page 2 Teller12

This is our Honorable Teller said on Sep 05, year 2016

Teller, The Great Manipulator Of HEXP - Page 2 Teller13

This is our Honorable Teller said on October 3, Year 2016
Teller, The Great Manipulator Of HEXP - Page 2 Teller14

35Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 10:42 am

Teller

Teller
Moderator
Moderator
We recommend HEXP from 50 levels so those who trusted us are real winners. There is no doubt at all as we promised HEXP will be touched 130/ levels.
Current market scenarios effected overall market sentiment that's thereason our target took some time.
How ever HEXP is the golden share we should accumilate at this stage.
GL


_________________




Teller said is said..

36Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 10:53 am

Rifanmoh


Equity Analytic
Equity Analytic
It seems the Market did not understand/get attention of the huge profit that has been recorded in the books of HEXP.

Await the quarterly financial to reveal the reality. I am a professionally qualified Accountant working as an Accountant at one of the blue chip companies in Sri Lanka. There is no any doubt on the cash profit of Rs. 200 Mn + because of the sale of the land.

37Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 12:25 pm

Miss-Sangeetha

Miss-Sangeetha
Moderator
Moderator
@Teller wrote:We recommend HEXP from 50 levels so those who trusted us are real winners. There is no doubt at all as we promised HEXP will be touched 130/ levels.
Current market scenarios effected overall market sentiment that's thereason our target took some time.
How ever HEXP is the golden share we should accumilate at this stage.
GL

First of all you were not recommended the HEXP at Rs.50, that is Karuna the first person recommended the HEXP at Rs.45 after the HEXP share price collapsed due to value added tax rumors and panic, in the middle you hijacked the HEXP on behalf of your boss Bartleet. Now Karuna masquerading as Rosa maria, Wisdom 78 and Wisdom79.
CSE has more than 15 trading members including your boss Bartleet, They have their own research department for shares, in addition to this, lot of local as well as foreign banks and high net worth institutional investors are also participating in CSE daily, and they don’t know or understand the  golden value of HEXP? Or Are they blind enough, unable to catch your golden share HEXP?
Here you portrayed transaction between two subsidiaries of Hayleys with sharing common directors as a great sale of land in the history of CSE.
 If the so called independent valuator, valued HEXP land value as Rs.200 million and if Hayleys subsidiary ALMEX PLC, sharing common directors, willing to pay 420million to HEXP another subsidiary of Hayleys, Could the independent valuator block the transaction?
https://cdn.cse.lk/cmt/upload_cse_announcements/4901484047847_.pdf

Usually some companies are doing this type of transaction to enlarge their books value of fixed asset or Cash asset prior to their right issue, here the incoming news of HEXP right issue within 4 months also confirming their transaction purpose.

After deliberate enlarged land value transaction than surrounding place land value for the right issue purposes, no one can expect one off cash dividend from this transaction.
 Last time they offered beggar’s dividend of Cents 50, that too subject to taxation.
I have the fellow membership of then The Charted Institute of Management Accountants of UK        

38Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 1:02 pm

Rifanmoh


Equity Analytic
Equity Analytic
Who said the land was valued at 200 Mn by independent valuer?? It's 420 Mn. Did you check past annual reports where you would see how the market value of this property has been moving.

Ok your point is that the price the land transaction was executed at is significantly higher than true value. My question is how this can be a negative effect to HEXP?. If the price you got as seller Is high, then why it is bad?

39Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 1:54 pm

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Only one question I have.

If they - HEXP and ALUMex were not related to each other , not managed by same people, would ALUMex pay this unusual amount to HEXP for a 8 acre land ?

People are taking about a big profit. ALUMex collected 800 million from public at IPO 2 years ago and now HAYL change owner's name of a land and transfer 400 million from ALUMex to HEXP .

If they give a big dividend then will money go back to the Public ?
No ! to the pockets of main shareholders of HEXP .

40Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 2:15 pm

Rifanmoh


Equity Analytic
Equity Analytic
@Chinwi wrote:Only one question I have.

If they - HEXP and ALUMex were not related to each other , not managed by same people, would ALUMex pay this unusual amount  to HEXP for a 8 acre land  ?  

People are taking about  a big profit.  ALUMex collected  800 million from public at IPO 2 years ago and now HAYL change owner's name of a land and transfer 400 million from ALUMex to HEXP .

If they give a  big dividend then  will money go back to the Public ?
No ! to the pockets of main shareholders of HEXP .

Obviously No!. But then who is the loser? Buyer or seller?

HAYL doesn't own 100 % stake at HEXP. HAYL gets benefited, so do the other shareholders!



Last edited by Rifanmoh on Fri Jan 20, 2017 2:18 pm; edited 2 times in total (Reason for editing : Spell correction)

41Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 2:45 pm

Ryan Hudson


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
What is this ? Supreme court of sri lanka with lot of lawyers, debates should be fruitful, the land has been valued by licensed valuer, so no loss to either party, its win win

42Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 3:00 pm

Rifanmoh


Equity Analytic
Equity Analytic
@Ryan Hudson wrote:What is this ? Supreme court of sri lanka with lot of lawyers, debates should be fruitful, the land has been valued by licensed valuer, so no loss to either party, its win win
This is what I have been telling. It was a arms length transaction. But people come with their valuation skills and say that, the value of the land was too high.

So I ask them if the price paid by ALUM to HEXP is high, why it is bad for HEXP?

43Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 3:29 pm

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
From the beginning my argument was this is bad for minority shareholders of Alumex. They lose their money. That's all.

44Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 20, 2017 3:44 pm

Rifanmoh


Equity Analytic
Equity Analytic
@Chinwi wrote:From the beginning my argument was this is bad for minority shareholders of Alumex. They lose their money.  That's all.

You are correct.

It is bad for ALUM if it paid an unnecessary premium to acquire this land.

It is extra good for HEXP if there was such an unusually high premium included in the price. But however the extra premium could not be more than 50 Mn. As reported in every annual report, the annual movement in the market value of this property justifies the price Rs. 420 Mn.

45Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 27, 2017 2:23 pm

ifenny

ifenny
Senior Equity Analytic
Senior Equity Analytic
After reading all these arguments, I still believe it is too early to predict price movement of both HEXP and ALUM based on land transaction until it is clear to public shareholders that what HEXP is going to do with the money and what is ALUM is going to do with the land.

46Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 27, 2017 3:50 pm

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Rifanmoh wrote:
@Chinwi wrote:From the beginning my argument was this is bad for minority shareholders of Alumex. They lose their money.  That's all.

You are correct.

It is bad for ALUM if it paid an unnecessary premium to acquire this land.

It is extra good for HEXP if there was such an unusually high premium included in the price. But however the extra premium could not be more than 50 Mn. As reported in every annual report, the annual movement in the market value of this property justifies the price Rs. 420 Mn.


Small clarification.

I still want to explain  more for sake of business minded people to indicate how I build my argument.

They are paying 420 million for 8 acres of land to build a factory. i.e. 52 million per acre.
If they are developing a residential park then it is justifiable.  

If I build this factory I will go few kms away and buy a land paying 20 million.

NOW , I will direct you to resent news of Horana Tyre factory.
To defy accusations done by Hon. Rajitha Senarathne MP, another cabinet minister Hon. Malik Samarawickrama today disclosed the valuation details of the land.

“The statement that the land was given for Rs.100/- per Acre is incorrect.

In fact, the Government Chief Valuer had valued the land at Rs. 170,825,000/- and the investor has agreed to pay the total amount upfront.”

For 100 acres the valuation is 170 million.

i.e.  1 acre is 17 laks. 10,600 per perch. This seems to be a fair price. If this is an undeveloped bare land.

Now, we can compare ,
One company pays 420 million to buy 8 acres
another company pays 170 million to buy 100 acres.

Both for same purpose.

This is what I wanted to emphasize .  Minority shareholders screwed.  Extra premium is over 400 million.

47Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 27, 2017 5:29 pm

stockback


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
me manussaiayata therenne naha.

Ekala kiyanne Factory zone ekak. ehema hama thanama factory danna baha. specialy Yakada sahitha anshu wathayata muda harina nisa. e factory special zone ekaki karanne.

mama inne ekala kittuwen. ape paththe perch ekak yana gana api dannawa. nikan moda katha kiyanna epa.

Alumex eke anith share holderslata usawi yanna puluwan. ehema case ekak dala nahane. 51% thibunai kiyala hama transaction ekakma karanna baha....

48Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Jan 27, 2017 5:34 pm

Rifanmoh


Equity Analytic
Equity Analytic
@Chinwi

400 Mn premium? LOL

Don't compare Apple with Orange.

49Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Thu Feb 02, 2017 4:34 pm

Rifanmoh


Equity Analytic
Equity Analytic
Q3 Financials are released. While there is excellent improvement in the profits, the company also has disclosed on the profit earned (Capital Gain) with regard to the sale of land in a note to the accounts.


Events occurring after the Reporting Date
The Company disposed its Ekala Property to Alumex PLC (which is a subsidiary of Hayleys PLC) at a consideration of Rs.420,000,000/=. Deed of transfer was executed on 10th January 2017 subsequent to the reporting date.
This had been approved by the shareholders at the EGM held on 27th of July 2016. The gain on disposal of above property amounts to Rs. 215,000,000.

https://cdn.cse.lk/cmt/upload_report_file/768_1486027854496.pdf

This has been disclosed as the transaction was executed after the end of the Q3. This profit will be included in the Q4 financials.

As i have been repeatedly arguing that a profit per share above Rs. 25 has been earned due to the sale, now it is evident that profit of Rs. 26.875 per share has been actually disclosed. Divide Rs. 215 Mn by number of shares 8 Mn.

This profit is a permanent addition to NAV. So now think of the PBV of 1.38. So the share price is capable of going up by (1.38*26.875) Rs. 37. This is around Rs. 120

The company's cash position has drastically improved to Rs. 150 Mn even even before the sale the land. With the sale of land cash per share to stand at Rs. 71.25. This provides an opportunity for a huge one off dividend unless the Board has plans to reinvest the cash in the business.

50Teller, The Great Manipulator Of HEXP - Page 2 Empty Re: Teller, The Great Manipulator Of HEXP Fri Feb 03, 2017 9:50 am

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Rifanmoh wrote:Q3 Financials are released. While there is excellent improvement in the profits, the company also has disclosed on the profit earned (Capital Gain) with regard to the sale of land in a note to the accounts.


This has been disclosed as the transaction was executed after the end of the Q3. This profit will be included in the Q4 financials.

As i have been repeatedly arguing that a profit per share above Rs. 25 has been earned due to the sale, now it is evident that profit of Rs. 26.875 per share has been actually disclosed. Divide Rs. 215 Mn by number of shares 8 Mn.

Your calculations are correct. Agreed.

This profit is a permanent addition to NAV. So now think of the PBV of 1.38. So the share price is capable of going up by (1.38*26.875) Rs. 37. This is around Rs. 120

The company's cash position has drastically improved to Rs. 150 Mn even even before the sale the land. With the sale of land cash per share to stand at Rs. 71.25. This provides an opportunity for a huge one off dividend unless the Board has plans to reinvest the cash in the business.

You multiply 26.875 by PBV 1.38 to get 37/-

I understood it but my way is different. I do not multiply cash by PBV if a company has a big % of assets as cash. Because cash is cash.

IF they give big dividend they cannot give PBV increase.

26.875 x 1.38 = 37/-
If 26.857 given as dividend, you get 26.875 +
0  x 1.38 = 0

---

If they use this cash to buy an income generating property or do value addition to existing business then the story is different.

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