Creo Medical Share Discussion Threads

[birdman101] 17/4/2010 14:03

I think the company are reasonably close to announcing an update on the Singapore move. My interpretation of the situation is they have submitted the required documentation to the SGX and are now awaiting (maybe already have?) feedback/approval from them. They'll then look to issue the listing documentation (and agree on various restrictions in the trust documents) and call an EGM for approval by shareholders.

At the same time I believe they can get to a point with the SGX where all they have to do is agree a date following approval by shareholders.

I'm guessing you're now talking the back end of June or July for the actual move.

Following a share split and the associated publicity the listing will provide, I expect a rerating to £7-£8 fairly quickly.

It is worth remembering that 1.5m shares have been bought back at 330p and also that the year end NAV was struck at 11.25 GBPCNY which is now trading closer to 10.5 GBPCNY. There is also likely to be a 5% appreciation in the Yuan vs USD in the next 12 months.

[2ngawang] 16/4/2010 12:59

Thanks very much, newswseller.

[newswseller] 16/4/2010 12:17

I believe we should hear some news shortly on the Singapore listing, especially if it's mean't to be listing in June.

Should hopefully give us another rise up closer to the NAV which is currently over £11.

[birdman101] 15/4/2010 19:51

Out to the pub?

[hazl] 15/4/2010 12:31

into brci am out for now and out ish gl to holders

[ppowerscourt] 08/4/2010 20:41

Wondered why such a severe drop today? There is a sell of 23,700 shares at about midday but late-reported.

[eddie1980] 08/4/2010 18:31

I don't think we need to be concerned about REO - they sold out in the recent tender. They also had to sell out at below the trading price when the tender was announced (think it was at 360p, tender at 330p), and so are no longer connected to CREO (except through any common directors) It was in fact a good buying opportunity as the price shot up once the tendor had been completed.

Re the comment of whether the assets belong to treasury rather than CREO, I think you are saying if Treasury earn a certain fee and its not paid in cash but in effect give them entitlement in any asset - well this would be captured in any NAV quoted for CREO (as this would obviously be after any payment to Treasury), so I don't think you would have to consider it unless you are attempting your own calcs in advance of any announcement.

Besides, if no fee for Treasury in 2009, and hopefully a Singapore listing by Summer 2010 bringing the share price closer to NAV, any potential fee for Treasury, unless absurd, is neither here nor there as I suspect most UK investors will have sold out (hopefully at good gains from todays price!) before the end of 2010.

[longsight] 08/4/2010 15:01

Thank you for the above post & apologies for not finding this info. I am unclear from the note however as to what % fee they earn & if the benchmark changes after a fee entitlement arises, & if so, how, . I do recall that previously the fee was as high as 25% of asset appreciation after a certain level was achieved. Obviously shareholders do need to consider this arrangement carefully in deciding how much of the assets in effect belong to Treasury Holdings rather than CREO. TH & CREO share the same director & of course is also related to REO, which I believe is insolvent or at the least is in serious financial difficulty.

[eddie1980] 08/4/2010 14:24

Further to my last email, I can give you the source - the CREO accounts for 2009, and with 100% certainty, pg 85& 86 of the 2009 accounts. Changes in 2009 include no fee for the movement of RMB vs GBP. Also states no fee accrued for 2009 as missed targets.

The Company and THCL entered into an investment advisory agreement dated 25
June 2007 pursuant to which THCL is responsible for the provision of investment
advisory services for the Company's property assets and, at the discretion of the
Company, development management and project management services. The
agreement is for an initial period of three years from its July 2007 admission to
AIM and will continue thereafter until terminated by the Company on 12 months'
written notice provided that the agreement may be terminated by either party on
shorter notice in the event of, inter alia, breach of contract or insolvency.
In accordance with the investment advisory agreement, THCL shall receive 50%
(or a higher percentage decided by the investment manager) of the value of the
performance fee in the form of allotted and issued ordinary shares in the Company
("Performance Fee Shares"). The number of Performance Fee Shares to be issued
shall be calculated by dividing the amount of the performance fee to be satisfied
by the Performance Fee Shares by the net asset value per share of the Group at the
year end.
At 31 December 2007 the calculation of the 2007 performance fee was based on
the movement in the adjusted NAV. Since 2008, all calculations have been
benchmarked against the Group's performance as assessed on an EPRA NAV
basis.
In June 2009, the following amendments to the terms of the investment advisory
agreement have been agreed. These changes eliminate from any future
performance fee calculation (i) any increase or decrease in the value of RMB
against GBP; and (ii) any increase in net asset value per share arising from the
Company repurchasing its shares. For the purposes of calculating any future
entitlement to performance fees:
i) EPRA net asset value at the end of each financial period will be expressed in
RMB. The payment of a performance fee remains subject to a high water mark
which will initially be determined by reference to the Company's net assets as
at 31 December 2008 expressed in RMB at the exchange rate prevailing on
that date; and
ii) if the Company repurchases its own shares during any relevant period, the
EPRA net asset value per share at the end of that period will be adjusted to
eliminate the impact of the share repurchases on net asset value per share.
86
Notes to the consolidated financial statements
For the year ended 31 December 2009 (continued)
27. Related parties (continued)
(a) Investment advisory agreement with THCL (continued)
At the same time as agreeing the above, the board of Directors engaged THCL as
investment manager for a further two years so that, except in certain specified
circumstances, the earliest date on which notice may be given will be July 2012.
According to the revised investment advisory agreement, THCL was entitled to
receive the following fees in 2009:
i) Investment management fees of GBP1.57 million (2008: GBP5.29 million).
ii) Development management fees of GBP1.82 million (2008:GBP2.46
million).
iii) Performance fee accrual for the year of nil (2008: GBP43.77 million).
No performance fee was accrued for the year ended 31 December 2009 as the
conditions described in the agreement were not satisfied.

[eddie1980] 08/4/2010 13:39

I cannot give the source or say with 100% certainty, but I am sure I read that the management fees had been renegotiated, and further, that increases in NAV due to currency movements were explicitly excluded. (now hoping I haven't got this confused with Hirco.) I will go have a look and try and find the article though.

[kramch] 08/4/2010 11:22

longsight, I hold and recently increased, but like you I have reservations (see post 505 8-3-10) which are common to all AIM property "funds" with separately owned management companies.

Carpathian Asset Management seem to have got a very generous deal to wind up CPT, with the aquiesence of Laxey and Weiss. The role of GOAL at SDIC is an open sore for shareholders and I believe is becoming a concern to the banks.

I will be sorry if Singapore allow this CREO listing without insisting on internalising the management. Separate management Cos which can suck cash out of a company will, in my view, always compromise the share price vs NAV.

The directors' buys encouraged me to add as their personal interests become more aligned with ours, and the discount is, not withstranding the above, excessive IMO. K.

[longsight] 08/4/2010 10:17

Mikeja, just read the Edison note & obviously it is quite bullish. Clearly there are positives [which I was largely aware of] - but it does not deal with the performance fee issue or the various conflicts of interest between Treasury Holdings, CREO & REO. I had read in some comment that the performance fee mechanism was being renegotiated but I have yet to come across the terms of such renegotiation though I can not imagine any issue being of greater importance for shareholders. I think the fee stunk - were the parties [who are all related] unaware of the possibility of currency appreciation when they agreed its terms???

To reiterate - I have no position here, long or short, & no intention to invest even though I'm sure there is further share price appreciation to come.

I will continue to read posts on here to see if someone has satisfactory answers to the issues I raised but I will make no further contribution to the BB

[longsight] 08/4/2010 09:58

mikeja - I asked sceptical questions about wcc at that time but I did change my mind & bought in quite heavily. I was seriously thinking about buying in here having read about CREO in the FT in early March. I spent a day reading up about CREO & produced my own report & decided not to buy - some of the reasons are in my above post. I appreciate that Edison might have dealt with my issues - I didn't see their Report & will read it today - but I am very surprised that none of these points are really discussed on here. In particular, I thought the performance fee was an utter disgrace - and I didn't think much of the REO tender sale either.

For the record I made a new year's resolution not to post destructively on shares I don't own or which I have sold - but these are legitimate & sincere concerns & I thought it reasonable to raise them, especially since I did do my homework on CREO. If I have got it wrong then please inform me & others of the answers so they might invest with greater confidence in the integrity of the Directors. The massive share price discount to assets presumably didn't come from nowhere.

[mikeja] 08/4/2010 09:48

Matrix also put out a report with a target of 750p in mid 2009,b4 Singapore listing suggestion and when outlook was less bullish than now.
What is your agenda on this board,are you a holder or a shorter?

[mikeja] 08/4/2010 09:39

Longsight,suggest you read edison report of Dec 2009 which deals with these points.Were you not in the WCC site running them down some months ago only to revise your stance now?

[longsight] 07/4/2010 12:21

There was some mention of changes to the calculation of the performance fee. I could not find any info on this. Does anyone know if the basis of this has been altered & if so how? Does the fee operate like a rachet, taking out chunks of the assets in good years but having no rebate in bad years. Difficult to believe that Treasury Holdings & CREO were unaware of the potential mega fee through currency appreciation? There seems to be a conflict of interest between Treasury Holdings & CREO. This might explain the large discount to asset values historically.

Also does anyone have a view on the REO share tender? If REO are bankrupt, is there an issue with creditors receiving an undervalue on this asset? I note the relationship between CREO & REO.

I note that rental yields are very low & vacany rates have risen, lease terms are typically just 2 years. CREO does not make a profit. All the return for shareholders is in increases in asset values - but how much of that is taken out of the Co through the performance fee? My concern will be how asset vales will get hit by an interest rate rise in PRC.

Also worth noting the concentration on Shanghai Property in its portfolio & that irrespective of Shanghai being considered as the epicentre of the Real Estate bubble in PRC, there is a surge of new Office space coming through in 2012.

I guess CREO wish to list in Singapore because of the quite lax corporate governance regime. Not sure they wd have got a HK listing since these issues might have looked bad in a weighty listing doc. Will even Singapore allow CREO to list?

Very surprised that none of the holders here want to discuss these issues. They leapt out at me when I looked into the Co.

[flip101] 05/4/2010 21:55

Chinese crude consumption up 28% yoy. It's economy is booming. This means firstly that CREOs properties are well underpinned at the latest NAVs and secondly the Yuan is going to appreciate against the USD thus bosting the GBP NAV.

[mikeja] 31/3/2010 10:36

bt 10k at 455

[mikeja] 31/3/2010 06:33

Steg's comment is on the nail.

[mikeja] 31/3/2010 06:32

Have bt a few so mms look for stock for me.I use Worldspreads on the phone.
I have a small ac at CMC which I use for L2and they are not taking any more buy orders.

[ambuchanan12] 30/3/2010 19:07

Mike - that really irritates me like newsletter i has did a variety od fastrade orders and didnt get one share either. i guess i should have phoned.. there is a squeeze going on - may try agin tomo..

[flip101] 30/3/2010 13:20

Yes and you should be able to deal within the spread if in large enough size depending on supply and demand at the time.

I get the feeling that there is not much stock out there. Doesn't really seem to be much volume coming out.

[stegrego] 30/3/2010 13:13

A decent broker and a phone is usually how things like that go down.

[newswseller] 30/3/2010 13:09

how did u manage to get 25k? TDW (which sucks) would only allow me to buy a maximum of £500 worth, tried from 8-10am and then gave up.

[flip101] 30/3/2010 12:52

mikeja - would purely be to trim by position a little. The majority is going for around 800p at least.

Selling now is a little daft in my view.