Prosperity Minerals Share Discussion Threads

[dr contrarian] 14/6/2013 09:11

ACC speculation back on the back-burner, though with the ACC stake valued at 75p a share, it still provides a useful support to the undervaluation story.

Back to the really undervalued assets, the property portfolio, we should be finally getting that trading update with the results in 1 to 2 weeks.

Hopefully followed by some action on behalf of the Company to highlight the undervaluation story here and address the massive gap between the current share price and net asset value.

Celeritas, you mentioned a possible investor roadshow alongside the usual results presentation to Institutions. This would be a good start, noticed davidosh on the naibu thread also trying to promote private investor meetings with smaller companies.

[celeritas] 14/6/2013 09:04

I could go on.
Add in £23m from Hangzhou
Add in £126m from property sales, a further 5 months of sales are still to add from that to present, prices have been higher per sqm.

Income form Silver Bay
Income from Oriental retail and office space.
Not forgetting Changzhou City, Fujian Province where pmhl have already invested £24m

[celeritas] 14/6/2013 08:48

Yep, it's worth 106m today. 11m less than pmhl.

Add in the £15m pmhl will receive from Liaoning and the cement plants account for more than the current cap.

[john henry] 14/6/2013 08:43

ACC down today in a positive market ( swings and roundabouts)

[celeritas] 14/6/2013 08:36

Re-visiting my post yesterday.

Interim results November 2012

Up to 30 September 2012, contracted sales of residential units amounted to RMB 1,144 million ($180 million) with the Company having received approximately RMB 1,043 million ($164 million) in cash. Since then, contracted sales have increased to RMB 1,318 million ($211 million) with RMB 1,217 million ($190 million) already received

There is obviously a time lag between the sale and receiving the money.
Sales of 211m with 190m received, 21m difference.

Sales are being quickly converted into cash which means the buyer is following through with the entire purchase.
The time lag isn't long at all, couple of months I would say from the initial signing.

[topvest] 13/6/2013 20:32

This does look well poised to make further progress this year and next. As we get closer to the real estate profits getting book we should see sentiment markedly improve.

[look alive] 13/6/2013 15:47

He won't be able to force through an unrealistic offer unless outside shareholders agree.

[philjeans] 13/6/2013 15:33

No trading update this year; he's doesn't want to put too much shine on the property sales before he launches a low ball offer - after he gets all the shares he can pay a massive special div - just to himself (and /or his other companies).

Don't rule it out.

[celeritas] 13/6/2013 13:59

We shouldn't foget that pmhl received £337m for their cement business back in June 2010. The share price back then reached 170p. The bulk of the cash was invested into property which is only now coming to fruition.

Anhui Conch is the most likely to buy acc, but I wouldn't rule out TCC.

I remember when pmhl sold it's majority of cement plants and wondered why acc was never part of the TCC (Taiwan cement corporation) deal. On further research i found that pmhl was still in a lock in period so couldn't legally sell acc, so it never became part of the deal. That period is well past now.

[dr contrarian] 13/6/2013 13:50

JH - Lets see how events unfold.

There have already been two significant diposals this year the stake in cement maker TCC and the stake in the Hangzhou property development. It wouldn't be a total surprise to see ACC sold, however it would be an unexpected bonus.

Like a few on here, I am mainly holding for the recognition and revaluation of the Company's property developments which most probably represents 70% of the assets.

[john henry] 13/6/2013 13:41

No smoke without fire and ACC has been very strong in a weak market

[john henry] 13/6/2013 13:37

Dr C If PMHL have been approached for there 33% stake, then I guess a takeover

of ACC is on the cards.

Now that would stir a little interest in PMHL stock.

[dr contrarian] 13/6/2013 13:00

Can not find any more information about the impressive rise of ACC, although I do recall that Anhui Conch Cement (China's largest cement maker by market cap) was the second largest holder after PMHL's 33% stake. Might they be interested in the Company's stake ?

[dr contrarian] 13/6/2013 11:54

JH - I agree the Chinese way of doing business, especially the related party deals doesn't sell well to western investors. Though it's worth noting that the Company's most obvious related party transaction was the development in Guangzhou and this appears to be significantly surpassing all expectations.

[john henry] 13/6/2013 11:39

In fairness I think it is all the related party deals involving Wongs other

Interests that casts a shadow over the company.

[fft] 13/6/2013 11:23

thanks. missed the nov interims. That does seem to derisk the property side. Which only leaves the question as to why it hasn't been taken out/private already !

[dr contrarian] 13/6/2013 10:57

Celes - You beat me to it and with more up to date data :-)

[dr contrarian] 13/6/2013 10:54

fft - Also think that at some point PIHL or Chairman Wong will make a move to take this private.

Given that LIM have a put option for most of their holding with PIHL at the equivalent of 130p, The Company could consider an offer at this level. However given the value of the company's assets (ACC alone worth 77p per share) and imminent property development profits, 130p would be a steal, even though it is 50% above current levels.

With regards to pre-sales, the sales literature indicated that discounts were offered to those who paid in full. Judging by last years trading statement I think quite a few have chosen this way as the company had already received US$70m up to 24th May 2012.

Also as the apartment prices of the development have continued to rise significantly over time I think the chances of investors walking away are not that high.

[celeritas] 13/6/2013 10:42

fft

Interim results November 2012

Up to 30 September 2012, contracted sales of residential units amounted to RMB 1,144 million ($180 million) with the Company having received approximately RMB 1,043 million ($164 million) in cash. Since then, contracted sales have increased to RMB 1,318 million ($211 million) with RMB 1,217 million ($190 million) already received

No sign of your 5% deposit.


I also sold once the majority of the cement sites were sold, as you say it was far too early to value the property and it could have turned out badly.
But as it is I've always kept up to date and noticed that rather than go down the pan, Wong has played a blinder with the property investment. Avg selling price is now North of 40,000 with Oriental Landmark being the place to be. Pmhl started selling at 31,000, it's really gone through the roof.

We also have other property that really takes a back seat to Oriental but is still substantial.

[fft] 13/6/2013 10:01

If the company has real value (and I have been in and out of a number of Chinese companies that havnt), then Wong, or investment partner will surely take PMHL private at some point.

That should provide an easy 50% gain from here. Which may not be great for long term holders, but good for those who have bought in the last month or 2.

FWIW, I bought originally in the low hundreds in 2009/2010, and got out after the special div and the switch from cement into property. maybe a small loss, but at the time the investment was no longer clear as property was/is not a slam dunk in china.

I have come back in in the last few weeks as there does seem to something up with ACC that can only be good, the property side looks to be doing well, although I am worried that they may have only taken 5% deposits (fairly standard asian method) and when it comes time to pay the rest that 'buyers' will walk away. The iron ore side is a drag as too many related party txns and not obvious if we are making or losing money with all the side txns.

[john henry] 13/6/2013 09:52

Celeritas surely Wong must realise the AIM market will never give a fair

valuation to PMHL.

Market will simply continue to give him the Bird.

[celeritas] 13/6/2013 09:34

I agree, thats the problem.

[john henry] 13/6/2013 09:26

Celeritas I don't think the market gives a 4X about Wong.

A few astute investors may make good profit.

Hopefully myself and a few others share in that profit.

[celeritas] 13/6/2013 09:25

I can't believe they had to delay printing that 10k buy.

[dr contrarian] 13/6/2013 09:20

JH, It appears that any sellers (there have been a few) have been quickly picked up at these levels.

The large seller which had been holding down the price was cleared when LIM asset management recently increased their stake. Perhaps they are still picking up any loose stock.