Sovgem Share Discussion Threads

[topvest] 22/5/2009 22:07

Well done - maybe I should have done the same!

[bardfield1] 22/5/2009 19:28

I got 16p, had it on a limit order and got it. Was pleasantly surprised.

[topvest] 21/5/2009 19:18

Wise move imho. How much did you get? I only got 14.5p.

[bardfield1] 21/5/2009 16:49

Sold today
Believe they will drift down, I'll be back in if they do.

[bardfield1] 20/5/2009 20:30

16p is my breakeven price, I've got my original stake back too.
Bit torn as whether to sell or not, encouraged by the way the price held relatively solid during the day was expecting to fall back as people took the opportunity to bail out.

[jhan66] 20/5/2009 16:40

Agree with that topvest.
I'm only interested in SOV when there's a sufficiently large NAV discount. I suspect it's bigger than the directors have been indicating through this merger but not big enough for me.
Glad you've recovered your investment.

[topvest] 20/5/2009 16:14

Had a squint at the reverse document on the Sovgem site and just bailed out. It looks an interesting deal. Trouble is, I ask the question; is it likely that this will drop after the excitement fades and the reality returns of running a small investment bank when AIM is dead in the water? My answer is yes, hence I've sold. I will watch this closely though as long term it looks a very good deal and I may well try and get back in at some point. Good luck to those that remain.

[topvest] 20/5/2009 15:41

The market likes what they see. Back to nearly the price I originally invested at - nice to see!

[jhan66] 20/5/2009 08:12

Today's opening seems to cast doubt on the Boards opinion that current NAV is 14.9p, the same as it was at year end 31/12/08

[topvest] 06/5/2009 21:32

The CEO looks like he is losing his job as a result of the reverse. Overall, I think it looks a good deal though in principle. Investment banks are great buys at the bottom of the market, but rubbish investments at any other point. Only happens once in every 5/6 years, but they bounce very strongly from the bottom when markets improve. For e.g. Daniel Stewart was less than a penning in techbust of the early 2000's and went to 30/40p. This investment bank looks a high quality small play and the combination with Sovgem could be interesting, if they can work the investment side with the bank. It will be interesting to see what the prospectus says about the investment bank and it's trading results. Could have to wait a month or so now though.

[jhan66] 06/5/2009 09:44

Don't know, bardfield. Changing into a different animal now.
I suppose if there is value there, this may be a useful step to realising it. Issuing new shares at 11.9p sounds great with current price of 7/8p
Perhaps it was becoming more difficult to find or access more of the bargain companies they previously unearthed. Exhausted their reservoir from Socgen (or wherever they originated)

Investment Banks aren't my favourite holding at the moment, any share price approaching true NAV would be helpful exit. I should say that by fluke (or bad luck?) I massively trimmed my holding just yesterday. But at least I made a 120% net gain. Wish I could do that more often.

[topvest] 06/5/2009 09:42

Sounds a good opportunity to me at the bottom of the market. Need to study further, but on the face of it, this looks positive.

[bardfield1] 06/5/2009 09:36

Thanks jhan, that tallies with my calculations.
What's your view on whether this is a good deal for shareholders ?

[jhan66] 06/5/2009 07:47

The number of the Consideration Shares to be issued as consideration for HansonWesthouse will imply a valuation for SovGEM of GBP2,710,225 (equivalent to 11.9p per Ordinary Share) which equates to a 20 per cent. discount to the SovGEM directors' estimate of the Company's average net asset value over the five business days ending on 5 May 2009.


Looks like I was wrong on asset value. Around 15p judging by today's announcement

[bardfield1] 05/5/2009 14:30

Harbin upto $10, AOB upto $4.5 and SinoEnergy upto $1.57
I think your right jhan NAV may well be nearer 20p than 15p.

[jhan66] 30/4/2009 13:35

PURE back up to £2.50

I'll be surprised in NAV isn't near 20p now. They last reported 15.5p in November. SSEC has risen 45% since then & 30% doesn't seem unrealistic after the steep fall in October.

Results look overdue though. Hardly a good sign.

[jhan66] 20/4/2009 17:20

Hi Bardfield1, I bought SOV a week ago for about a sixth of the price I sold them in late 2007. Net assets looked substantially more than the share price, to protect the downside. My remaining concern was whether the price would just sit there. No dividend, no liquidity, no noise.
I've held too many bargain shares over the years which though undoubtedly undervalued, refused to budge. I guess the market perceived them as `for the benefit of the directors' & without dividends there was never any progress.

Hopefully Sovgem doesn't come under this category. Good luck in recovering your outlay.

[bardfield1] 20/4/2009 15:16

Good posts jhan, I'm a long term holder of SOV (sitting on a big paper loss), holding on and hoping that we will see some recovery over the next twelve months.
Nice rise today on very low volume - I presume in expectation of results and an updated NAV.

[jhan66] 11/4/2009 17:50

More background.

Oct.08 Amerprise sold 2.275M SOV shares.
Oct.08 MM bought 2.275M SOV shares increasing his holding to 3.329M.
Dec.08 MM trimmed his stake to 2.875M
Dec.08 PL declared 1.336M shares

MM & PL are Investment Advisers at TML (domiciled in Jersey probably in St.Helier near Sovgem)

Paul Luke – Chairman of TML
Paul Luke is co-founder and former chairman of Convivo Capital Management Ltd., a UK fund management company. He has worked in the City of London since 1977. Between 1977 and 1986 he worked at the Bank of England and the Cabinet Office. Thereafter, he held various senior investment banking positions within the West-Deutsche Landesbank and Deutsche Bank Groups, and was a director of Deutsche Morgan Grenfell.

Michael Milbourn – Director of TML
Michael Milbourn has been involved in the London financial community since 1970 and for ten years ran a successful Emerging Markets trading and financing business. In 1995 he made the transition to Chief Operating Officer at West Merchant Bank during a major transformation of the business, in which role he assumed responsibility for all operational, administrative and support activities as well as being chairman of the operations committee, counterparty risk committee and promotional activities committee


btw. results probably due this week ahead of the AGM

[jonwig] 10/4/2009 08:12

Many thanks for that: I did start updating my spreadsheet and your efforts will help me along!

[jhan66] 09/4/2009 21:41

Jonwig- done a bit of work to start you off. See what you think. I've pasted lines directly from Jun accounts so some of those `current value' figures will be confusing. Last line on each company is todays value.

30/6/08 had net assets of 28.8p = £6757456
17.3p of these assets (60%) were represented by these eight holdings below.

Harbin Electric (NASDAQ: HRBN)
SovGEM purchased its initial stake at $2 per share in 2005; the current price is $13.06.
500000 shares. Sold 380000 for $2.17M. Not sure when but received $5.70 average, so probably Dec.08.
Still got 120000. Today=$7.99=$960000

PureCircle (LSE:PURE)
SovGEM purchased PURE in Dec 2007 at 170p; the current share price is 238p.
Bought 147059 at £1.70. Now worth £2.26 =£332353

Cadogan (LSE:CAD)
average equivalent price of 86.1p current share price of CAD is 94p.
could be 483333 shares. Today 11.5p = £55500

American Oriental (NYSE:AOB)
Confusing. Had 325000 shares. Sold 265000 for $3M. Looks like most of this was sold before Jun'08 results. But pie chart below suggests differently. Had 60000 remaining worth $11.90 in Jun'08, Today=£4.04=$242000

SinoEnergy (NASDAQ:SNEN)
current market price of $6.64 compares to our purchase price of $3.40
Bought 200000 @ $3.04 ea. Sold 50000 @$4.32, around Oct'08. Now have 150000=$1.29=$193500

Renesola (LSE:SOLA)
current market price of 392p (SovGEM paid 79p)
Bought 243902 shares. Sold 218122 for £668000. Probably around October at £3.06 average.
Still got 25780. Today=£1.30=£33500

Worldwide Energy & Manufacturing (OTCBB: WEMU)
24 June 2008 SovGEM purchased 72,222 shares in WEMU at $4.50
current share price of WEMU is $6.75 also have some warrants
Price today $3.45=$249000

Tianyin Pharmaceuticals (OTCBB: TYNP) (amex:TPI)
current share price of TYNP is $2.30. Paid $1.60 for 312,500 shares
Today= $1.80 =$562500

In June last year, those investments were worth £4M. I can see today's value is £2M if I have the correct holdings, but there's plenty of sales to add back.

Nevertheless, Sovgem appeared to have had very real NAV shrinkage 12/9/08 NAV= 26.9p, 26/11/08 NAV=15.5p.





Also have interests in these companies. (11.5p of June'08 assets? Judging by the Jan. pie Chart, Russian Timber & Petrocom are a significant % of overall assets)

Russian Timber Group (formerly Tynda Forest Holdings) - an established forestry products company based in the Amur region of Russia's Far East servicing Chinese demand for timber

Sinosoft Technology plc (AIM: SFT.L) - a leading Chinese e-Government software provider. www.sinosoft-technology.net

Petrocom Energy – an unquoted company that constructs state-of-the-art Coal Blending Facility (CBFTM) to produce compliant coal to serve the growing demands of China's power generation market. The Lianyungang CBF project is the first of PEL's 25 projects in China. Petrocom is headquartered in Hong Kong, registered in the Cayman Islands. www.petrocom-energy.com

HaiKe Chemical Group (AIM: HAIK) - based in Shandong, China, HaiKe manufactures petrochemicals, speciality chemicals and fine biochemicals. www.haikechemical.com

Concorde Oil and Gas plc - an unquoted company seeking to invest in or acquire operational oil and gas assets in the Russian Federation

CEP International Petroleum Limited - an unquoted oil exploration company with onshore exploration licences on the Kamchatka Peninsula in the Russian Far East. www.cep-international.ca

KimCor Diamonds plc (AIM; KIM.L) - a new mining and exploration company with various projects in South Africa. www.kimcordiamonds.com

Sorell Inc (OTCBB: SLLI) - designer and manufacturer of portable multimedia players, mobile phones and multifunction music players. Sorell was acquired by Togen, a UK-based holding company. www.sorellinc.com

China GengSheng Minerals (OTCBB:CHGS) - a manufac of refractory products for the steel and oil industries


Jan'09 pie chart suggests these values(very approx)
Harbin 16%
Russian Timb. 15%
Petrocom 14%
AOB 12%
Sinoenergy 10%
Pure 9%
Tianyin 9%
Worldwide E&M 5%
CEP Int.Pet 4%
Cadogan 2%
Haike 2%
Chin GenShen 1%
Sinosoft, Concorde, Renesola, Infosmart, SRT 1%


Well needs more work but I suspect there's up to £2.5M in share assets and £1M in cash or new investments. Take away admin costs, add back dividends and you end up with a figure seriously over current share value (£0.8M)

My glasses are excessively rosy, focussing only on the positives, so I suggest you go through these figures more thoroughly.
It will probably be made very clear at the AGM in a couple of weeks but my be worth a punt before then.

[jhan66] 31/3/2009 12:31

Cadogan Petroleum plc, [LSE: CAD]

not one of their wiser investments but it's doubled in March if they're still holding.

[jonwig] 27/3/2009 12:19

Fast reading - nope, I was just checking my Harbin numbers.
I'll cross-check the two pdfs for holdings over the weekend. (They are both dated 12/08).
Then I'll get the header up-to-date I hope.

[jhan66] 27/3/2009 12:02

Blimey, fast reading!
It's from the SOVGEM website. so is this one



They say holding was 120000 Harbin at 28th Nov. from an original 500,000 ($1M @$2 each, so Hybridian wrong)

[jonwig] 27/3/2009 11:53

Thanks for that - hadn't come across Hybridan before.

But on p14 they say SOV has a residual holding of 816,000 shares in Harbin Electric.
Surely not!