Dec09 Personal - HYis borned , HZ sick and Fixmarket

Wah a really exhausting 2 Months for myself.

Hsien Yi is borned:)
My second son Hsien Yi is born on 17th November 09 Tuesday, hurray ! :) (37+ week)
It was in the evening time (the day before) when my wife suddenly felt water flowing, and after awhile we realised it is not your usual unable to hold the bladder. At that moment, we were caught unprepared and started to panic. We were actually trying to schedule a surgery next week on the 28th December (another 11 days later). We quickly got my parents here to take care of my elder son (3 yr old) and got the bag (luckily prepared in advance) with my wife's clothes and medical stuff and went straight to the hospital. As I was quite unprepared for a waterbag burst delivery (my first son symptons was actually slight bleeding) , I quickly grap some towels and a plastic sheet from somewhere and placed in the car.

As my wife started contraction, we think it was good to try a natural birth. However though there were contraction, there were no dilation, and there was a risk that the placenta may drop first , endangering the baby in the process, thus our gynae advised us for a cesarean surgery. The gynae came just before midnight and started the operation. And quite a coincidence, it is the Chinese Chu Yi. According to the Chinese it is a Da Ri Zhi (Big day) and only people with the ming (fortune) - you can be very successful and be the other opposite.

At 12am, Hsien Yi is borned, weighing 3.41 Kg and measuring 51 cm long with a very big head (39cm) - 90th percentile. It seems that my kids have something with being big headed haha :)

Hsien Yi is extremely alert, with his eyes opening on the next day already. (unlike my first one who only opened his eyes 1-2 days after being discharged in hospital)

The next month was a hectic month for us. The nanny who came is very unprofessional, she has an attitude problem ( I asked her to wake up at a certain timing to feed my son, while she say if she can wake up she will do so) - it really pissed me off. She also do some things which really got on my nerve, for instance washing vegetable in the basin ( extremely dirty !) , and washed ginger in the pail that I put my clothes in ! During the day time, she will also chit chat with my maid, sometimes oblivion to my wife asking for help (still recovering). It was a fustrating month for us. And although we though of changing the nanny, we viewed it week by week and thought that she will improve and we tried to close 1 eye. Well so we did not change and endured the 4 weeks. Also although the nanny takes care at night, when our son cries, we also wake up, and when he cries continously we as parents will also wake up in the night to see what is wrong.

The worst thing was during that time, my old neck problem came back. It pains after siting for some time. This problem came because I was too tired taking care of my wife and eldest son, such that when I fell asleep and slept in an awkward postion trigering the neck pain ( and I though it went away after not feeling the effects for more than the last 6 months)

The pain finally subsided after 4 weeks and luckily just in time after the nanny left. My this son is really difficult to take care. He drinks every 3 hours, meaning to say after 12 midnight, we have to feed 3am, 6am. And usually it takes about 45min to feed him, and burp him. Also, he has a habit of vomitting out milk quite easily. And he seems very alert and after awhile he will get very agitated and seems frightened (big eyes and panting heavily and cries if not pacified).

The first day the gynae left, I took the night shift, and after feeding him at 11am, I tried with no avail to get him to sleep. In the process I gave him another 2 bottles of additional feed before the 2am as he seems agitated and will only cool down after drinking the milk. The problem now on hindsight is that probably he is getting used to me and I am still inexperienced. ( everytime he sleeps, and when I put him down he gets up again and refuses to sleep. He then gets frightend and agitated and the cycle repeats itslef). That nightmare finally came to a rest when my wife woke up at around 3 am and I asked her for the pacifier. That really solved my problem partially.
Partially because we found out the next few days is that although he gets pacified, when the pacifier comes out he gets agitated again.

I have been taking night shift so that my wife can recover from her maternity. I have taken leave/scheduled leave which will last till next year. (2 weeks after HY 1 month) . Every night I sleep about 4-5 hours or less. 1 hr b/w 9pm-12am, 1-2 hr b/w 12am-3am, 1-2 hr b/w 3am -6am, and 2 hr fr 6am-9am. Sometimes he doesn't sleep from 12-3am, really exhausted. And this has been going on for the last 14 days...really shack.

Okay, lets see and hope this kid get better after the 2nd month. My eldest son is coping well with the new additional member. of course there is the ocassionally asking for attention and throwing tantrums , but he is happy with the new addition the the family.

Hsien Zheng falls sick - gastric intestinal
Also, just the day after the nanny left, my eldest son fell ill (Thu/Fri). He vomitted in the middle of the night 2-3 times and had diahorrea, resulting in everybody not having enough rest. The next day I went to the clinic downstairs. At first, his vomitting stopped on Friday, but his diahorrea still perisisted. On Sunday when my in-laws came, HZ went wih my wife to Orchard road, and his vomitting came back. After a short rest, he seems to have recovered and wanted to follow his cousins to Mount Faber Jewel box to see the snow show. After coming back from there, he started vomitting again, and this time whatever we gave him (water, milk (soya bean)) he keep on vomitting. I quickly decided to send my son to the hospital (Mount E), as I am afraid it was something serious like food poisoning. At the hospital, the doctor (specialising in gastronomy- stomache) examined him and told us that his stomach is quite bloated (alot of air) and still do not seem to be very dehydrated. He gave us 2 options, either leave him at the hospital for drip or take medicine recommended by him. As he seems not that dehydrated, the doctor recommended the latter, as drip can be traumatic/painful even for an adult. And so, he was prescribed - Debridat ( for stomach pain), and continued with his lacteol fort sachet (antidiarrheal drug) , dramamine used for preventing vomitting.

Lacteol Fort - Lactic acid producing organisms ; Belongs to the class of antidiarrheal microorganisms. Used in the treatment of diarrhea, for patients suffering from the chronic intestinal disease known as irritable bowel syndrome. Patients show symptons of abdominal pain, bloating or gas, daily number of stools, etc


Fixmarket -Urghh ..I got a letter from ACRA to submit AGM, which I have to hold AGM withinin every calendar year . I am in the process of striking of the company which I applied in August, and unfortunately I believe the strike off process may run till January (5 months) the next calender year. After reading the website, I came across Section 175, Application for Extension of Time to Hold Annual General Meeting. Since I do not know when the strike of will end, I applied for 3 months (50 dollars per month). After reading further I saw Section 201, Extension of Time to Lay Accounts at Annual General Meeting under Section 201 of the Companies Act- the account must be laid not more than 6 months before the date of the AGM. Really pek chek and according to ACRA I have to sought legal advice to see whether I need to apply Section 201 as their ACRA officers are not empowered to give such advice. What the heck , I also applied 3 months extension. So I paid an additional 300 to the stupid cost. Vomit blood. I really hope to close this shit this year (or early next year).

Nov 09

Continue my extremely busy schedule.

October was a very hetic month for me.
Firstly at work, this is my company's financial year end, there are monthly /quarterly/ yearly reports to be done.
Secondly, me, my son and my wife's birthday fall in this month.
Thirdly, as my 2nd son is due I have to take leave to accompany my wife to see the doctor, and have to take care of my 1st son more often.
Fourthly, my dad had to see a urologist due to a high PSI reading. I accompanied my dad a few times to Dr.Png for consultation and for a biosyss.

Investment wise, I have been going in and out of the market (scared of correction). Thus this year my results is just flat. I went into DBS as I was confident of it posting better anticpated results and last quarter I believe will see a MtM (mark to market) to MtM2 (mark to model) accounting by financial institution, will this give the market a further boost ?On March 16, 2009, FASB proposed allowing companies to use more leeway in valuing their assets under "mark-to-market" accounting, a move that could ease balance-sheet pressures many companies say they are feeling during the economic crisis. On April 2, 2009, after a 15-day public comment period, FASB eased the mark-to-market rules. Financial institutions are still required by the rules to mark transactions to market prices but more so in a steady market and less so when the market is inactive. To proponents of the rules, this removes the unnecessary "positive feedback loop" that can result in a deeply weakened economy.

I also made a few bad mistakes, going into Genting because of some rumors.

The lesson here is to stay in the market (unless there was a big disaster coming along), and to pick up undervalued/potential big giants from mid/small caps.

My investment now consists of SMRT 47% CDL Hospitality Reits 31% Boustead 9% , B/M/V make 5% of my portfolio, and unfortunately I have still 7% in Celestial which I probably have to write off.

My outlook - US market will be hit by 2 more monsters - credit card / commerical debts . Right now, the stock market is feeding itself to too much exubuerance. Cash is rubbish now. Heli Ben has made cash absolutely useless. The only way out of this financial crisis is to blow up another bubble....see the comparison after the dot-com....US blew up the housing bubble.....now it is back to basics 101.

SMRT
My rationale of keeping SMRT is obvious, in a downturn, it should hold as it is recession proof. In a potential upmarket, its current PE now is ard 13 (6.5 for 1st half), a complete steal for a monopoly. Look at its cash flow, it is at least 50% more. Growth will also come next year in terms of tourists growth due to the 2 IRs, circle line, and more economic recovery activities (more movement). Next 2 years growth should be ard 30% or so. I am also looking postively over the retails contribution next year (Doby Gaut / Orchard Xchange / Jurong East Exchange).
For more infor look at :http://singaporebuspage.wordpress.com/2009/11/01/next-stop-3-more-smrt-xchanges/

This is what I feel for more potential growth....although the governemnt is mulling over having a bid for the downtown line, I feel that XXXX. Y? the NE line already shows the stuXXX of the whole situation already, will the goverment still make another misXXX ? Let see a few years down the line how this get played out and whether I get this correct.

CDL
Its current yield is around 5.5 % at price 1.52 and 8 cents dividend. Next year I am very optimistic on the IR bringing many more tourists. There are actually many new tourists development being done in Singapore, besides the 2 IR/ F1/ smaller unnoticeable developments like manmade water surfing in Sentosa... bigger extension at the zoo - Wildlife Reserves Singapore Builds River Safari, Asia’s First River-themed Animal Attraction. CDL HR has shown it has weathered the downturn extremely well despite the recession and H1N1. It has managed to keep costs in check and has a sizeable hotel presence in Singapore which allowed it to have a certain level of economics of scale.

Boustead
At its current price, it should give a dividend yield of 5.5%. (4 cents/ 74 cent) I have faith in Wong FF for turning this gem into a bigger giant. It is credited for being forbes top 200 company. It will not reach last year's height as its real estate division will not sell of any of its properties this year unlike last year as this year most REITs are hit by credit crunch. I had bought Boustead much earlier on at 60 cents (30 stock split adjusted) and sold most of it at 1.1 cents (0.55 stock split adjusted) a few years back. It manage to ran up further because its profit YoY manged to grow and I did not expect it to manage to sell its real estate. This time, because of the low price, high cash (37 cents) , I expect it to provide a buffer for me.

Sep Update

Have been rather busy
June -
1) took my son to the zoo
2) going over to KL

July - Aug
1) climatised my son to his new school -Pat's schoolhouse

2) Repaired 2 of my lights, 1 is the one in the kitchen, tha ballast was spoilt. After tinkiering for a while, I finally gave up and got the boss selling lights to come over to my flat to fix it. apparently it needed to cut 3 wires, and then connect it back. It came to about 40-50, and I think it is well spent as it was a very tedious job looking up for almost an hour to fix it.

3) Called the plumber to fix up my kitchen basin ...its leaking. spent about 200 to glue up the basin, change the tap...it came loose and the pipe below.

4) Got the confinement lady for my wife's confinement

5) Look around maid agencies and selected a maid...coming in a month's time. Smaller agencies are more personal then big agenices like Nation.

6) Got new furnitures...went furniture shopping/IKEA/Furniture mall/ and got a new cupboard so that we can store our newborn clothes, new shoe rack so that we can transfer our first boy's toys into the cupboard...now it is quite unsightly around. Sold our room's TV as it is the CRT and taking up too much space. Had also to move our furniture around and rearrnging getting our first boy's older clothes.

5) Manage to finally solved my Fixmarket problem !!!! I called Emmy to help me strike off the company. We compromised that I will settle Mr. Jiang's debt 2 years of accounting fee and she will help me do the strike off - full financial statements and audit for free.
So I paid up 2700! due mainly to my negligance....but bo pian...take it as tution fees
I went to IRAs to ensure that Fixmarket had no outstanding accrual to the government agencies and then went to ACRA to confirm that I can strike off the company w/o major shareholder approval. In the ACRA website, I meet all conditions to strike off except w/o major shareholder approval as Mr. Jiang is nowhere to be found.
According to Ms Lee at ACRA, I have to hold evidence that I have tried all means to contact him, and I can proceed ahead to click on the condiditon all major shareholder approve of the strike off.
This is a fantastic relieve after so many years (almost 9 years !) of trouble. It will take about 5-6 months to proceed.

June09

Regional indices have been rallying and STI/HK is up 30-40% this year.

Unfortunately yours truely have been severly underperforming, portfolio is down 4-5% this year, although an improvement from the low of 24% in March, mainly due to my biggest holding Celestial.

I have divested most of my Celestial taking a sharp loss which will unfortunately although business is sound, may face a financial liquidity crunch, unable to finance its convertible bond.

I have also divested Darco taking a sharp loss. I also read the annual report of Darco, I did not like I see as its receivables/debts has been ballooning upwards.

I have also divested MIIF which I find that its dividends may be cut even further due to its debt and subsidary debt. Its parent is also selling of them.

I have shifted most of my funds to SMRT, CDL hospital Trust. Why ? Most blue chips have ran up, with the banks/SPH ard 15-20x this years PE. SMRT is ard 16x giving me a dividend of abt 5%. Growth next year will be the circle line and more integrated network making it the most dorminant transport infrastructure in Singapore. Next year will be boosted by more attractions in Singapore. Just think, it will be so easy going to the zoo, IR.

Why CDL ? The IR is aiming to attract high flyers, but I feel that the tourists mass will be fr SE Asia region like Malaysia/Indonesia/Thailand, people who will most probably fill up the 3-4 star hotels which CDL fit the bill. At 79 its dividend should be ard 10%. 1st Q2009 DPU is ard 2 cents.

In an article published in October 2008, the Singapore Tourism Board is said to be confident of a
recovery in the Singapore tourism industry by 2010. The industry outlook is expected to remain
positive in the medium to long term, as a result of a strong line-up of world-class events such as
the annual Formula One Grand Prix and the Youth Olympic Games in 2010. The two Integrated
Resorts (“IR”) scheduled for completion within the next two years and the doubling of Singapore’s
cruise ship capacity by 2010, when the new International Cruise Terminal becomes operational,
are also expected to increase passenger traffic to Singapore.
In addition, Singapore continues to draw international interest in the Meetings, Incentives,
Conventions & Exhibitions (“MICE”) space, including the APEC conferences to be held in 2009.
Having been voted as the “Top International Meeting City for 2007” by the Union of International
Associations in August 2008, the completion of new convention facilities in the two IRs will
enhance Singapore’s ability to attract a wide range of international events.
Continued low debt to asset ratio
On 30 January 2009, CDLHT had its properties re-valued at S$1.48 billion, down from S$1.63
billion previously. The re-valuation of its properties has no impact on distributions.
Notwithstanding reduced property values, CDLHT continues to enjoy one of the lowest gearing
ratios among Singapore REITs with debt to assets of 18.2%. Furthermore, CDLHT continued to
demonstrate strong operating cash flows of S$102.8 million, and a healthy interest cover of 11.1
times. CDLHT is also proactively managing its portfolio and financing risks, with discussions in
progress to explore various options to secure refinancing of its S$273 million borrowings due July
2009.

key differentiating factors for commercial office properties

...this is a reply from dydx on the wallstraits forum on the commercial office property which I find it useful for evaluating commercial office property investment

I am no property expert, but I believe some of the key differentiating factors for commercial office properties are -

1. A good location - e.g. Raffles Place; close to a key MRT station; being part of an integrated development (e.g. like Suntec, where the shopping mall and convention centre elements make the offices there desirable, even though the MRT is quite a long walk away). This usually makes a property become "Prime" in the location sense.

2. A good architectural design, with big-enough floor plates, up-to-date techinical specifications, and high-quality furnishings, suited for large modern offices. All these make a property "Grade A" in additional to its location. In this aspect, new buildings are always one-up against the older buildings. That's why big some companies or banks have no qualms in moving their main offices every few years - especially when the economy is looking up and their businesses are expanding - going for the best and cheaper deals.

3. Property owners giving naming rights of the building to key tenants. Some big companies or banks like the idea of having their rented building carrying their names, and for that they are willing to sign a longer lease and perhaps pay a premium rent.

Notwithstanding the above, commercial office rental rates are ultimately governed by supply/demand forces, be it for Prime, Grade A, or other lower grades. On the demand side, the main driver is the state of the economy, and whether the foreign banks and other financial institutions, coporates, and related providers of support services, are expanding. At the end of the day, companies and banks hire more staff and spend or invest in new offices because of business requirements - i.e. there is business to be done, or at least a strong likelihood of it happening.

On the supply side, the main driver is the completion of new office buildings in particular locations. E.g. When the currently under-construction new Straits Trading Building and Keppel Towers are completed, total supply of Grade A office space at Raffles Place will increase significantly. Unless demand continues to grow in the short term to mob up the new supply - unlikely under the current scenario - office rental rates in Raffles Place will come under serious competitive pressure and will have to fall, so the the new supply of space can be absorbed within a reasonable period of time, giving the owners of the new buildings a chance to collect some rev.

Another point to note, when big companies do not make money, it is entirely possible that the management will downgrade their offices from Grade A at Prime locations, even into their factories/warehouses in Jurong! And we must not forget most of the large banks are moving their back-end operations to Tampines or other offside locations in order to cut rental expenses and place such units in more longer-term premises.

Singapore tycoon sues Citi over $684 mln losses-paper

SINGAPORE, May 19 (Reuters) - Singapore-based businessman Oei Hong Leong has sued Citigroup's private bank for negligence and misrepresentation after he lost S$1 billion ($684 million) on foreign exchange and bond trades last year, the Straits Times reported on Tuesday.

Oei's lawsuit said Citi, with which he has a 30-year relationship, repeatedly gave him an inaccurate picture of his trading exposure, which led him to take on more positions than he would have taken otherwise, the newspaper said, citing court documents. It said Oei declined to comment about the court case.

A spokesman from Citi told Reuters in an email: "We believe that the claim is without merit and we fully intend to defend our position vigorously." It declined to comment further on the matter.

There was no immediate comment available from Oei's office.

Oei was ranked Singapore's 29th richest person by Forbes last year with a net worth of $210 million. Forbes calculated Oei's wealth based on his stakes in publicly traded companies and in private company filings.

According to Straits Times, Oei claimed he felt compelled to close his positions at an extremely volatile time in October last year, taking huge losses, as he felt he had no choice after discovering the full extent of his exposure. Some angry Asian private banking clients have filed lawsuits after losing money on complex financial products battered in a global market meltdown last year, forcing the industry into damage control.

.....My thoughts :
1) Again my advice, Banks are never your friend ! Don't get mesmerized by being a so call priority or private client of a bank. It just throws a veil over you...make you important and happy.... so that they can sell you financial products.

I remembered being tried to sell a product, which gives you 7% interest annually, but is tied to the worst performnace of 3 global indices (S&P, Nikkei & Euro market) in October 2007. Once any market drop 30%, I will have to absorb the loss ! Investors sold on the 7% interest will have a nasty shock. My RM was telling me ...oh stock market correct 10-20% the most, so you have a high chance of getting 7% annually, just put a token sum inside. What rubbish. The signs of the housing market in the US and financial orgy were already cracking.

Be investment and financial savvy and treat the bank as a partner. Only you youself is accountable to your own well (wealth) being.

2) OHL case is just an example that you may be accumulating wealth for many years, but just need a single wrong step to set you back sevealy. It is very easy to go down, earning back is 10x harder.
Lesson learnt is that one must always be guarded, treat every single cent/ investment extra cautious.

Price cuts draw buyers to 3 condo relaunches

May 19, 2009
Price cuts draw buyers to 3 condo relaunches
By Joyce Teo

Three prime condominium projects that struggled to generate interest last year saw a surge of buyer activity over the weekend after developers cut their prices.

The freehold 19-storey Parc Centennial in Kampong Java Road - where all 51 units are served by private lifts - sold 32 units at $1,115 per square foot (psf) to $1,233 psf, or from $1.27 million to $1.93 million. This price level is about 20 per cent lower than last year's $1,450 psf, and the interest absorption scheme is included.

Developer EL Development sold only six units in April and May last year when the project was originally released for sale. And at a private preview in March this year, it sold a 2,486 sq ft penthouse unit for $1,005 psf.

It held a preview this past weekend and has now sold all the two-bedroom units, which start from 1,098 sq ft. The three-bedders increase in size to 1,572 sq ft.

Managing director Lim Yew Soon said he had raised the prices of the remaining 12 three-bedroom units at Parc Centennial by 2 per cent.

Over at the 302-unit Martin Place Residences in River Valley, a soft launch over the weekend saw sales of 80 units at $1,450 psf on average, out of a total of 100 units launched.

Developer Frasers Centrepoint Homes said the 'attractive pricing' drew buyers. It released units priced from $1,260 psf to $1,700 psf, compared with the initial 28 units sold at $1,700 psf to $2,000 psf last year.

Singaporeans made up 62 per cent of the buyers at Martin Place Residences, with the rest being permanent residents and foreigners.

Earlier, CapitaLand had reported strong weekend sales at its 173-unit The Wharf Residence. About 95 per cent of the buyers chose not to take up the stamp duty waiver and interest absorption, preferring a straight 8 per cent price cut, it said yesterday.

Prices started at just below $1,000 psf for units with private enclosed space and many of the weekend deals were done at less than $1,300 psf, industry sources said.

Attractive price cuts, coupled with the recent stock market rally and a fear of losing out, are some of the key factors spurring buyer interest, experts said.

Compared with the situation late last year, buyers are more confident and developers seem to be taking advantage of improving sentiment to relaunch projects at attractive prices, said PropNex chief executive Mohamed Ismail.

.............Coincidentally, I went over the weekend to enrol my son into Meyer Road Pat School House. It costs about above 700+ for a half day course. The other school I saw was Modern Montesorri which cost about 600+. PS has a ratio of 1:7 while MM a ratio of 1:12. Furthermore, PS has a classroom of muscial instruments.

This is my thoughts... I have colleague who place their kids into church school which costs around 200+, but this does not include school holidays. So effectively they have to find ways to take care of them, also they enrol them for Chinese+Music+Art class which will cost another additional 200-300+. In PS, you have everything in 1 roof, which will save time/effort too.

PS anyway has very good reviews and I think it is time for my little one to learn some independance and some skill sets which we as parents/grandparents may be hard to instill.

....Anyhow, after registering my son, we visited a new classy condominuium "View at Meyer". Its has a very classy architectural building with private lifts. It is sort of a boutique condo. But wow, the price was also classy. It range from 1250 psf (3th floor) to 1450-1500 (9th floor) and 1700 psf at 20+ floor. A 3-bdrm is 1600+ sqf and 4-bdrm 1790 sqf. Thus the price is ard 2.2- 2.9 million. Well according to the property agent there, this is considered a boutique condo, and this is the price to pay. Nearby condos like Esta/Seaview/One amber is ard 900 + psf, but there are easily few hundred units there. I suspect there might be traffic jam just trying to get back home.

I am thinking, at the end of the day, convenience is still my top prority. Getting food is a breeze to me, at my current place, I can get good food within 3 mins walk.

It is also next to a upcoming central MRT. If I were to stay in those Condo, I will have missed out on all these convenience. When my kids grow up, I need not fetch them up/down frequently. My Uncle who lives in Bukit Timah Coronation road, although is considered prime land, he has to be a full time chauffeur as it is so inaccessible.

At the VaM, I also saw Zhou Chu Ming. He seems to have bought a 1-bdroom trying to rent out at 3.5K. Well good luck.

Property seems to be picking up, due to pent up demand and sentiment. However the avalanche of TOP property next year and the wave of expatriate going back home only means that supply is still in abundant. I am not optimistic of property prices in the next 1-2 years, which had not corrected much.

2009 Arsenal EPL review

It has been another lously year for Arsenal, 4 years without a trophy, and is a tough pill to swallow for Arsenal fans.

This year without Arashavin, Arsenal may still be fighting for 4th place. I feel that this year Wenger has got many of his tactics and strategy wrong.
- not fielding Arashavin in the FA cup, the only realistic cup to win
- persisting with Diaby who is crap and even worse playing him out of position
- in the 1st championship match, Walcott was already in Evra pocket, with of little use, in the 2nd match Wenger still played him in that position....poor decision. I will have moved Bendtner there who played much better in the 1st leg after taking over from Walcott, and placed Walcott central striker instead of Van Persie. The space & penetration in the final third was lacking. Van persie is more technical, but had no speed and thus no space. Walcott would have been better as a second striker feeding of Edabayor.
- In the last match vs Man U, we see that they have improved vastly, maybe because Man U was also cautious.
So what next, I feel that Arsenal although has progressed, is still lacking as a top club. They lack speed which only maybe Walcott is providing. Nasri is a central midifielder and playing him wide is a bad choice as there is little speed. He is not like Pires who gets into very dangerous position in the final third and scores lots of goals. Nasri playing wide does not get into dangerous position in the final third, usually outside the box.
1) Maybe they should get a natural wide winger with speed like Ryan Babel, 2) a more tenacious midfielder and and 3) tall capable defender. 4) And definitely a speedy tall & techinical striker to replace Edabayor who has lost interest and ineffective.
Bendtner although tall, is not good technically. Look at simple 1st touch which he hopelessly miss. Will he get better as he is still young? Although his goal tally is good for his age, it has to improve. If not he should be let go sooner, it is a waste of time, and waste of future precious points.

Well it is time to look for next season, hoping the next experience players get recruited, and definitely will look forward towards Arashavin, an improved Walcott, Educardo and Rosicky fighting for next season.

Confession of a S-Chip CEO

The speculation is that the writer is the ex-CEO of Fibrechem and he was referring to the D&H team. I have no idea how "authentic" this email is but i have to say that i am "not surprised" by the contents of what was alleged in the email. It is an interesting read for the "IPO" market. If you want to "read" only the gist of the story, start from "Then my life-changing incident took place." in red below

THE CONFESSION OF AN S-CHIP CEO

We are victims as well!!! Let me tell you the story. By the time you read this article, it would reached have hundreds of investors, bankers, regulators and journalists. My purpose was to shed some light on the “dark sides” of the business of S-Chips (Chinese companies listed on Singapore Stock Exchange), so as to help prevent more financial losses in the future hurting the ordinary people on the street. From this angle, I wish to redeem myself somewhat.........

It all started some 6-7 years ago. My colleagues and I were just a few of the million of entrepreneurs in China struggling to make ends meet at the textile fibre factory that we bought from the government. Some of our older colleagues had laboured for more than 20 years before having the chance to “privatise” the state-owned textile fibre factory in Fujian Province that we have worked for since the day we left school under the Premier Zhu’s “government retreat, private sector advance” scheme, literally at a song. We thought we were going to be very rich very soon. Little we knew that when the local governments of the various counties and villages decided to “retreat”, we end up! with thousands of “privately-owned” textile fibre spinners that competed ever more aggressively. Despite ever rising revenue, margins were disappearing fast....... Sometime, we just wonder why we have worked so hard only to earn next to nothing. Perhaps, our only reward was meant to be “the master of our own destinies”...... But we never really gave up hope...... One day, we shall strike gold.......

1990, the year after the TianAnMen Incident, was really a very difficult year. Many of our clients, the textile manufacturers who were enjoying the initial euphoria of the burgeoning export demand, went belly-up within a short 2 years of economic contraction. However, we pulled through all the vanishing receivables and anguish cashflow-balancing exercises.

By 1993, we were off for the biggest boom ride of our life-time. Our textile fibre business blossomed as China becomes the clothing factory of the world, benefiting not least from the one-off Renminbi devaluation that the Chinese government engineered in 1994. Those were the good old days, where sufficient numbers of our competitors were eliminated by the TianAnMen-induced recession, and the world began to look to China for every piece of garments stretching from the heads to toes.

Money was easy......and we expanded our production capacity as quickly as we could, limited only by the fact that the state-owned banks were not really very keen to lend money to private enterprises like ours, and we just have to borrow from our villagers at some 15% interest rates!!! Nevertheless, we did good business and our leader, the general manager of the factory, could even afford a chaffer-driven Santana. In any case, he was too old to learn new trick, even as simple as driving itself. I was the rising star which had to bide my time, as I was the only person who speaks decent English. I was meant to be the tongue of the company in dealing with the external world. But I am getting impatient. For while the company was booking increasing profits, we never seems to have cash to be distributed as any excess cash generated from the business was never enough to cover the capital expenditure needed to expand the production .

We just owned an ever-growing production business. Unfortunately, good profit margins never last in China. Good demand quickly attracted new entrants into the business as the barrier of entry is relatively low. At the same time, some of the so called “obsolete capacities” came back from the grave and soon, we found ourselves struggling to churn our profit. It was like working for free again......lots of revenues but just no profit!!!

By the middle of 1990’s, we were doing great business selling to our customers in different areas of the coastal areas. In 1995, we suddenly found ourselves having to deal with fast rising cost pressure. However, the market was buoyant enough for us to raise our product prices to pass on the cost increase to our customers. Then, we realized that we must move ahead in term of technology and product offering. Like everyone else around us, we took advantage of the tax concession offered by the government to the so-called joint venture companies. We recycled our “cash” to Hong Kong, set up a “foreign company”, which in turn pumped back the cash to Fujian in the form of a joint venture entity, using the cash to purchase some second-hand German equipment to produce the chemical fibre! s needed in all kinds of fabrics and artificial leathers.

However, luck did not really favour us, at least thus far. Soon, we were told that our economy was experiencing very high inflation rates and soon, the then Premier Zhu Rongji stepped a hard brake on the economy, cutting the bank credit to many state-owned enterprises which were producing things that no consumers wanted. While as private enterprise we did not enjoy the benefit of bank credit, its sudden massive contraction hurt us as bad as the state-owned enterprises who received such reckless loans. We were entangled like the other enterprises in what we called the “triangular debt” problem, where everyone owes the next person money and there was just no money at the source for anyone to get paid.......!!! The situation last for quite sometime as we lived from hands to mouths, sometimes having to send out local thugs to chase for receivable payments from cash-strapped clients. Then again, what else can we do? We had so much or our friends’ and relatives’ money with us investing in all these machinery now that the only road for us is to struggle forwards......turning back would have made us the “outcast” of the village....... By the time the rest of the Asian economies cracked in 1997 amidst the so called Asian Financial Crisis, we were already becoming numb to bad news. I remembered there were days that I wished I had not joined the textile industry, or any industry at all......for making money out of making something is so darn difficult....... I thought I might have just wasted my youth. Somehow, we managed to pull through as a group. The general manager of the factory, who is now getting seriously old, made his sacrifice along the way by selling his Santana in order to keep more mouths fed. We all had no where else to turn to but to continue pushing hard to sell our new product, the chemical fibres.

Finally, by year 2000, the economy began to recover. Our hard work and persistence were also beginning to get paid off handsomely as China had become the centre of all textile, shoe and furniture manufacturing in the world, and all these products required some forms of chemical fibres. We were beginning to rake in cash beginning 2002!

Then my life-changing incident took place.

One fine day in late 2002, I was introduced over the dinner table to one Singapore “Deal-maker” who was to become one of the richest men in his country in the next 5 years. Mr D was still a “relatively” poor deal-maker at that time. Just like many so called “deal-makers” running around China at that time, they hope to make small fees introducing companies to capital, or vice versa. Mr D claimed that he had successfully engineered a number of private equity transactions in China, helping companies with so called “mezzanine” financing to prepare the companies to be listed in stock exc! hanges outside of China. He was fully aware of the psychology of Chinese entrepreneurs and their deep dissatisfaction with the bias of the Chinese government in allowing only state-owned enterprises to list on the local stock exchanges. To us, having a listing status in China is like having acquired the right to print money. One just has to cook up a nice investment story and he could get Chinese investors to subscribe to the right issues of a listed company at any price. It was so much more an elegant way to make some money, rather than to have to toil for a few cents selling chemical fibres....... Mr D went further to claim that he had taken some of the invested companies public in both Hong Kong and Singapore Stock Exchanges and given his investors had made some money, he always have a group of ready-investors willing to back all his “stock picks”. He went on to ask quite a number of detailed questions on the operating conditions of our companies over the dinner, jotted them down carefully on a small note book along the way. Later on, we adjourned up-stair the restaurant for a KTV session. I must admit that I remembered clearly Mr D was a good Chinese song singer, having sung some hot-off-the-chart songs that I heard my niece hummed sometime shortly before the incident. His smooth handling of the KTV girls, which he asked for two concurrently, also showed that he had been around.........

The next time I met Mr D was three months later, quite unexpectedly as I had thought he could have decided to give our company a miss given our relative small size. He requested for a factory visit which, after having consulted our old general manager, I accompanied throughout. As usual, no serious business until after dinner and getting slight tipsy after a few drinks forced down by the KTV girls in the evening. I must admit that Mr D is a seasoned operator. He was quick to recognise that I was an impatient young man to take over the operation from my older colleagues. Throughout the entire evening, he was trying to convince me to move the gear one notch faster to accept some private investors into the company, beyond which he was confident to help us to get the company listed in one of the foreign stock exchanges, where everyone will be able to cash out their profit if they so ! chose. I pretended to be sceptical while deep in my heart, I need no convincing as I have known many Fujian entrepreneurs shot to fame and riches, 2 of them by turning large tracts of collective land into vegetable farms and the other bending float glasses he bought from state-owned factories into auto wind-screens and sell them to car manufacturers. I never doubted that one can make a lot of money from car wind-screen, but I could have never imagined striking it rich planting vegetable.......!!!

Mr D and myself both agreed later that we need to convince the other older colleagues of mine to approve such a scheme, and over time, move them aside to allow someone young and dynamic person like myself to be the face of the firm to cater to the likings of the investors, who were mostly English speaking. In the meantime, my task was to convince the existing shareholders to allow a group of Mr D’s friends into the shareholding first, while paying Mr D a “structuring and introduction” fee along the way. The easy part was, as Mr D coached me on how to present to the rest of the shareholders, his fees will not be in “cash” but rather in equivalent value of “shares”. He said that was to assure everyone that he could only make money should he be able to engineer an eventual listing of the company on a stock exchange, after another year of lock-up period for promoter shares aft! er listing. All interests would be aligned, as he put it.

Mr D was indeed an experienced operator. He had anticipated all the concerns of the “older” colleagues of mine, who feared that this was another one of those “leather-bag-company” deal-makers that was trying to make money out of no commitment. So he got through the first “hurdle of trust” after my carefully orchestrated presentation to the “board” of the company.

However, there was still one important issue we could not resolve amongst the board members. The finance manager correctly pointed out that the company indeed, did not need substantial amount of cash at this moment as we were not expanding aggressively anymore. The market place for our products was relatively stable right now with demand and supply growing organically. We will not be able to drive higher sales without sacrificing our margins by cutting prices. In short, we can only grow organically at around 10% ! per annum, which was probably not the most exciting story for the investors. In fact, the board members did not see the need for new capital. However, the idea of getting listed did appeal to them. They too had many friend who had become “paper millionaire” after the companies got listed. They too were looking for the big-pay-off day. So I was tasked to come up with a solution. In other words, there was a “green-light”! I did not expect my luck! Almost immediately after the board meeting, I called Mr D to tell him the outcome, as well as the issues raised. Again, I thought he must have expected the outcomes. As he explained calmly over the phone, the first round investors (which he called angels) will not put in a lot of money so that they would not dilute the existing shareholders very much. These angels are the “connected persons” that will come in with their own money (through Mr D’s personal vehicle) that will help cement the way for some of the well known direct-investment funds to step in at a slightly later stage, which would provide the company with the credibility, other than funding, to convince the stock exchanges to allow the company’s listing, and the subsequent active participation of other institutional investors during the IPO. Mr D went on to explain that the process of getting a Chinese company list! ed was in fact, an art. There were not many people like him that could have the trust of many influential people to conceal their names behind his vehicle to invest in a company, not unless they have been working on other cases together before and having developed deep working relationship. These angels will see the company through the process from getting “restructured” to “listed”, rendering their helps in one way or another through exerting subtle influences on counter-parties, bankers, regulators and other investors. Mr D’s vehicle will participate in the shareholding of the company first, where they will invest up to 5% at book value. In other words, they demand for very cheap entry. Mr D will only take his fees later after having brought in the money from direct investment funds, in larger quantum, in the form of shares of the company at book value before the entry of new capital. He wanted 2% worth of the amount of money he would bring in from the funds in such shares. Subsequently, he went on to explain that this was the modus operandi these days as he could introduce us to the senior executives of the companies who had done business with him for further due diligence on his reputation. In particular, he emphasized that my colleagues should not be worried at all given the fact that it was going to be his and his friends’ money that will be in their hands, rather than the other way round. My older colleagues did find some solace in this argument later on.

As for the use of money, Mr D simply pointed out that we will have 6 month to a year to come up with a new plan on spending the proceed of investment, in the form of new technology and new products. “Aren’t you guys always looking for money to upgrade production machinery to produce new stuff for the market? It the same bunch of the customers anyway......”, so he quipped. So the decision process took a few months, where in between, Mr D sent in some accountants and lawyer to conduct some checks on our operation and accounts. We had nothing to hide then as we had no reason to fake anything. Everything was ours.......then. Subsequently, the “angels” came in, followed by, indeed, a number of reputable direct investment funds a few months down the line. We got a whopping US$20mn to put up a new plant to produce a new type of artificial fibre, the machinery of which was to be imported from Germany. The new product was in fact, attractive to a lot of customers. However, none of them were going to buy a lot of it at the beginning as they were not sure their customers were going to like the new types of yarns made of this new fibres. Business was not as brisk as Mr D had! hoped for.......

On the other hands, Mr D seemed quite keen that we could move forward in our listing process. He began to educate us the process and requirement of the stock exchanges for listing. We paid visit to Hong Kong and Singapore, talking to bankers and exchange officials, attending seminars, as organised by Mr D. We were all psyched up to be a rich millionaire once the company is listed. However, there was just this little problem.....our new products were not accepted by the market as fast as we had wished for. Most of our customers operate under very tight cash flow situation. They only have working capital to provide for the acquisition of raw materials to produce the yarns ordered by their customers. No one was going to spend a lot of money buying our new fibres, prod! uce large quantity of products to purvey them in trade shows, despite they all fed back with good comment on the potential of the new fibres. Very quickly, Mr D came up with an idea. In order to boost our sales numbers fast, he will raise another US$20mn of money from all the direct investment funds in the name of working capital need. As he explained, they often did the same tricks with those companies they listed before. They will raise new capital to produce the new products to sell to customers, encouraging them to help push the new products by offering them more favourable and longer payment terms. With the increased sales and profitability number, he could get the company to list very quickly to get more money to help push for more sales....... He claimed he had done it many times before and it had always worked out. The economy was recovering quickly in 2003, nothing was to going to go terribly wrong. When I asked whether that would be considered “artificially inflating sales number”, he laughed and quipped, with the capital markets on your side, you can engineer self-fulfilling prophesies!” Of course, this article cannot be complete, at this juncture, without citing Mr D’s favourite quotable quote. “Water enough money into any company, even a fake one could become real some day.” He believed so much in this that I thought one day, this could cause his downfall. So we went ahead, sold the new shares at higher valuation to another bunch of investors Mr D arranged. He took another round of commission in the form of shares. We were beginning to admire Mr D. Money flows through his hands like water and he did it so effortlessly.

We were no less impressed by his connection to some of the richest and most influential people, particularly in Singapore. You see, he was viewed as a successful Singapore entrepreneur made good in the vast land of the North. Through diligence and perseverance, he carved a niche for himself identifying promising Chinese companies to groom for listing on the Singapore Stock Exchange which was losing out in race to Hong Kong Stock Exchange as the Chinese! state-owned enterprises were encouraged to list in Hong Kong. Mr D was their hero, directing promising private Chinese enterprises to list in Singapore and along the way, enriching many “angels” and local investment banks in Singapore. I chanced upon many of these angels as well.

There were occasions Mr D would have called me to help arrange for some transport and accommodation in Xiamen for groups for “secret” visitors. They are usually small groups of 4-8 people. I would generally put them in comfortable Buick mini vans, receiving them from the airports, ferrying them to golf courses, restaurants and night clubs. They would usually visit one of two factories invested by Mr D. From my impression, these were the angels behind Mr D, which for obvious reasons, he had to please. There were bankers, lawyers, other deal makers, stock brokers, fund managers and people that do not have a job, simply because they were so rich already. Occasionally, there were ex-CEOs or Chairmen of large government controlled enterprises in Singapore. Once, I even met a supposedly ex-member of parliament in Singapore.

It was obvious to me that Mr D entertained them in separate groups at separate times, taking pains in ensuring that some of them were not aware of the involvement of the others, for some reasons. I was always invited to all these golf and night entertainment events for a simple reason: I speak English and Mr D wanted to be seen as having someone like me to watch over his investment in this part of the world and helped him to tap into different kinds of local relationship. The other Chinese entrepreneurs may not be comfortable in dealing with the whole bunch of English speaking Singaporeans.

One common trait of all these trips was that all these guys from Singapore seemed to love the night clubs in China. The daily programme always ended in some night clubs, where these guys would party till the wee hours, every night they were there. Mr D would sometime, when he was half drunk, tell me that he had again “nailed” some key relationship and one of the travellers in the group would soon be in his “Club”. He would whispered that someone in the group was the senior partner of an investment fund, or someone in another group was connected to the so-and-so in Singapore, or someone was closely associated with the chiefs of some Singapore banks, or someone had “influence” over the listing approval process of the stock exchange, and some would just be some new investors that he was trying to woo to invest in his pre-IPO projects or the shares in the companies that he sponsored the IPOs.

When I asked why they were all so tireless in their nocturnal activities, Mr D laughed, “This is what I call pent-up demand. You know these people cannot even come 100-meter close to any KTV in Singapore because of their social status. The opening up of China is probably the best thing that happened to all these Singaporean men, for they can at least release their “valves” once in a while........ Do you know how boring Singapore is? I have a permanent KTV room booked up in one of most posh KTV in Singapore, costing me half a million Dollar at the minimum every year. Guess what, the only important guests I have using that rooms are from China!” Watching Mr D in action, I finally understood the true meaning of “club”. He had managed to combine the “social club of friends” and KTV clubs so well that I thought every successful Chinese businessman should learn. And in so many ways, the “club” in Singapore is really not that different from the “club” in China........ So finally, we got our act together to attempt a listing towards the end of 2003, after much of the financial twisting and engineering to make our company look like a well-funded high-tech textile fibre company on the verge of experiencing explosive sales take-off. In truth, we produced a lot of the new fibre products and literally give them to our customer to produce new fabric for marketing purposes, with the promise that we will not collect money until their products are sold. Nevertheless, we book these as receivables.

To the dismay of Mr D, my older colleagues had insisted on listing the company on the Hong Kong Stock Exchange, rather than the Singapore one, where Mr D has greater control on the process. They felt that the company would probably be accorded higher valuation in Hong Kong. Besides, they were not comfortable with Mr D’s influence in Singapore fearing the ultimate loss of the control of their company. Mr D went along grudgingly, helping to smooth the way to facilitate the IPO. We got a small investment bank to underwrite the IPO. The big ones were really not interested in this small piece of business. We went on to file the application to list to Hong Kong Stock Exchange, who was equally high-handed as Hong Kong was flushed with quality large size state-owned enterprises queuing up to list there. Being relatively uninterested in small size listing and more experienced in evaluating the quality of smaller Chinese private enterprises, they were quick to notice the sudden expansion of account receivables on our accounting statements. They followed up with a number of questions with the clear purpose of delaying our listing, probably to see how these receivables will behave given longer period of time. In short, there would be no quick IPO for us.

Mr D was quick to use this delay to his advantage. He hinted to everyone on the company board was that one of the reason for the stock exchange delay was due to the lack of a convincing younger manager helming the company, and that our senior colleague was already too old to project a “dynamic” image to the Exchange and the investors subsequently. He wanted me to be promoted to the CEO position while our existing GM to become the Chairman of the board. With his insistence, my appointment was pushed through the board, which made one of my older colleagues very angry as he was supposed to be the next-in-line in seniority. But heck, he should have spent some time learning English! Mr D, being truly worried about the age of the receivables on our book that would become increasingly dubious as days go by, pushed us to shoot for a Singapore listing where he feel, with his broad relationship will help a smooth IPO. This time round, my older colleagues obliged grudgingly. So we quickly filed an application to list in Singapore. It proceeded relatively smoothly and we went through an initial hearing very quickly. The market was in relatively stable conditions and we felt we could get the IPO proceeds quickly at the turn of the year. With lot of money, like Mr D’s famous words, a fake company can become real....... To be fair, ours was not really a fake company. We were just doing what the Chinese proverb describes: Accelerating the growth of the seedling by pulling it up a little everyday...... To our surprise, we got a letter very soon from the stock exchange questioning us the reason for the failure to disclose to them we had applied to the Hong Kong Stock Exchange earlier. They asked whether we had been rejected previously and on what ground we had been rejected. Just as we wonder how they found out so quickly since one could safely assume due to competitive relationship, these exchanges should not be talking to each other on micro matters like this, Mr D came storming in over-night. “Someone wrote a poison letter to the stock exchange”, so he explained. “Someone who knows the situation very well and who is not very happy with the whole thing”, he concluded. We were fortunate, he went on to exclaim, as he felt that given the Hong Kong Stock Exchange never really rejected our application, he could still salvage the situation using his relationship and influence. While there was no hard evidence, we nevertheless took the precaution of asking for the early retirement of the senior colleague who was passed over for the post of CEO as we suspected him to be the whistle-blower. We made sure he was well compensated in monetary terms as we thought that would sooth his anger, with promises to allocate more of the shares to him so that he would share our desire to see a successful IPO. Then we went on to reply to the stock exchange disclaiming the fact that we were previously rejected, citing our need to access capital markets fast as ours business was expanding rapidly. Hong Kong was just going to be too long a wait for us.

On the other hand, Mr D worked his network and “club of friends” to sooth the nerves of the exchange officials, who were working hard to promote Singapore as the “second board for China” The launch of “second board of China in Shenzhen” hit a snag when the National Peoples’ Congress decided that the Chinese investment public was still too unsophisticated to handle investing in non-State-controlled enterprises that even the Chinese government may not be able to police effectively. So after 3 month, we were informed that we manage to secure the final hearing. Mr D and some young lawyers and accountants spent a few days preparing me to handle the questions “correctly”. I saw the signs of satisfaction on the faces of the officials during the hearing. One of them even went on to comment on the fluency of my English...... Mr D was right again. My Chairman could have fumbled and rumbled on just like any other Chinese CEO during such occasions. They were just the hardworking mulls that built the foundation of the Chinese’s manufacturing might. I belong to the generation that would take the company to soar higher as we understand and speak the language of high-finance, in English! The battle to IPO was hard won. We got listed in 2004 and to our pleasant surprise, some of our customers came back to pay down the receivables and asked for more of our new chemical fibres. By now, China has become the “factory of the World” that churned out all kinds of consumer and industrial products so cheaply that the Americans and the Europeans were so addicted to. The stock markets and physical property markets in the world were becoming buoyant and everyone was beginning to feel wealthy and began to spend more. Our new fibre products found more commercial uses and we bought more machines using the IPO proceeds to produce more products to cater to the booming demand.

Again Mr D was right. Pour more cash into the business and you will get a real company.........just like the pig-farmers l! isted on the stock exchange.......as he put it. Sensing potential to make a lot of money out of the good performance of the company and the buoyant market conditions, Mr D descended into town one day and asked me out for a dinner. As usual, we headed to his favourite KTV after dinner. After a few drinks, he leaned over and whispered to me, “Hey, this is your chance to grow really big very fast. The IPO proceed was not enough to fund your growth. Now that we are listed, we can place more shares out to raise more money to accelerate the business expansion to capture more customers before the competitors in China could replicate our capabilities, which always happen in every industry and business in China.” I was reluctant to agree to help sell the idea to my old! er colleagues as their shares were still in lock-up period and I imagined they would hate to see any dilution of their interests further at this juncture. Mr D went on, “I really needed your help as I need to get the shares placed out to some of those who helped us through the difficult times just not too long ago. We need to let them make some money as we are entering a bull market soon. In any case, the issuance of more new shares will give us more power to cement your position as the number one man in your company as we all support you rather than your older colleagues.” As usual, we kind of half forced the issue through the board with my older colleagues grudgingly approved some kind of convertible issue to assuage their fear that the new institutional investor would not be able to sell before they were allowed to.

In Mr D’s effort to consolidate his hold of the board further, a new director from the institutional investor group was appointed to the board. I had known him earlier as one of those that visited our plant before the IPO, when Mr D was just beginning to restructure the company shareholding where this new director was once introduced to me as an “angel” investor. Apparently, they were good friends that “make money together”. By 2005, the Chinese economy had entered into another “boom era” and our business was literally flying, just like any other businesses in China. Profit margins were good while sales expanded quickly, and our share prices rose more than 3 to 4 times from the IPO price. Many of older colleagues sold their shares and retired happily into the sunset in 2006, only to regret to see the shares they sold almost doubled again in 2007. Being the new helmsman, I could not easily sell my shares as it would have been construed as management not having confidence in the business. By then, Mr D had become one of the richest men in Singapore. Leveraging on his experience and the capital he accumulated from earlier successful IPOs he conducted, where in some case he made more than 50 times his capital, he exploited his new reputation as the “preferred deal-maker in Singapore” to the maximum.

His “club” became increasingly larger as many people with money and “influence” joined the “club” to participate in this unprecedented “Chinese feast”. He doled out hot IPO share allocation through investment banks to repay old favour and to cultivate new relationship. Success begets success and money begets money. It all seemed so easy and so natural. Everyone got what they wanted. The Chinese companies got their money to expand their business (which at a later stage, no one is really sure which company really had any business to start with), the entrepreneurs were handsomely rewarded for the risks they undertook, the deal makers got their fees, the angels made their killings, the bankers collected their fees and dished out new loans, the lawyers and accountants recruited more young graduates to cope with the record work volume, the stock exchange got their “new mandate as the second board of the Chinese companies”, the investors got their hot-and-sizzling China concept stocks and above all, the rich and the influential members of the “invisible clubs” were all happily enriching their own pockets......

The reason why Mr D was successful, I realised, was that he always try to help the people who helped him in one way or another to become richer. Despite the fact that I could not sell my shares, I got the help of one of his banker friends to obtain some financing by securing my stake in the company to join in the biggest “Chinese feast in Singapore”. Just like all the Chinese entrepreneurs Mr D helped, I became one of his “angel investors”, taking stakes in promising new companies through his vehicles, got allocated hot IPO shares and reaped substantial gains within short span of time. I too, was becoming not only asset, but also cash rich. I took advantage of the Singapore immigration rule and got myself a per! manent resident by purchasing a property in Singapore. I wanted my son to study in the English school in Singapore and grow up as part of the establishment there. In any case, I would be able to help him join the “club” and he will be taken care of the rest of his life.

As for Mr D, he was purchasing properties in the form of “tracts of land” as he moved to diversify his assets from stock holdings to land holdings, with a sight to become a serious property developer. The Singapore property market was getting sizzling hot by the middle of 2007 and it seemed nothing could go wrong, particularly when 2 casinos were being constructed in an otherwise very conservative society. For myself, Mr D was going to be my role model. I went on to fund entrepreneurs and Chinese companies directly, hoping one day to bring these companies to someone like Mr D, and make more than the Singaporean deal-maker, at least equal........ Oh, I forgot to mention that the Chinese local stock market went through the roof as well. To take advantage of this, I needed no advice from Mr D. My friends in the local banks helped me secure the capital easily just like what they did for thousands of state-owned enterprise officials. They took the company’s cash as “invisible lien” to lend money to the managers of these companies to punt in the stock markets. The profits of such stock market speculation go directly into the pocket of the managers.

However, only in hindsight after the stock market collapse at the end of 2007 that it became obvious a lot of Chinese companies’ cash in the bank vanished into thin-air alongside the stock market bubbles. Our worlds began to unravel at the end of the third quarter of 2007. By then, the Sub-prime Crisis, as we knew it now, had hit the U.S. economy. We were still busy feasting in the spoilt of the capital market excesses, unaware of the impacts of such a crisis that originated from the housing bubbles in a country so far away. We were blind-sighted by the ease of making money from stock markets and at the peak of the markets in the middle of 2007, we all felt like the “masters of the universe”.

The first sign of trouble amongst the Singapore listed Chinese companies appeared when the share price of a Chinese steel company got sold off aggressively. In good times amidst a vibrant economy, this company presented to the investing community a story of their ability to turn in good profit margins by buying hot-rolled steel coils, coating them in zinc and sell them to car and consumer durable makers. One analyst, whom everyone ignored when the stock prices were rocketing, did question its business model as firstly, such production method is highly inefficient as most modern steel mills produce zinc-coated plates in one continuous process, and secondly, the investing world also knew that the prices of hot-rolled coils became excessively expensive as there was a preponderance of such downstream ! processing plants who got squeezed by the few integrated steel giants who have the capability to smelt iron-ore. Then there was the rumour of the company being privatised by a foreign steel giant seeking easy entry into the China market and its stock prices shot up before the trading of this steel company was suspended one day.

Rumour had it that it had been reporting fake profits, an official report of which the investing community is still awaiting after a few months. It was so obvious an insider job to cash out their position to the retail investors and apparently, the company management was not contactable anymore! By the second half of 2008, I believed many Chinese company CEOs were having tough times struggling to keep their business afloat amidst the most serious and swift crisis in memory as the credit situations around the world got frozen up. Worst, many of us were facing more serious issues in our personal finances. All our investments in stock and property markets were plunging in values amidst the so-called sub-prime crisis. Worse, we could not sell our stocks and properties as the transaction volume of these investments just vanished quickly together with the confidence of the investors globally.

While we busy feasted in the spoilt of the capital market excesses over the last 2 years, we did not realise that we were piling on quite a fair bit of leverages as we secured our investments for more bank loans to attempt to reap more profits, when it all seemed so easy. We never thought we could have any problem of repaying any of our borrowing as we were sitting on a lot of gains on our investment holdings. There was only one easy way out for all the Chinese company CEOs and that was to dip into the honey jugs. We all understood the importance of having our closest allies to be the finance managers of our companies so that any small “problems” could always be ironed out. In this case, I just “borrowed” some cash from the company accounts to fill some of the “margin calls” from the banks outside of China, which financed my “investments” in the stocks listed on Singapore Stock Exchange, as these foreign banks were ruthless in coming to seize the underlying security when the “margin calls” were not met. In some cases, I just pledged more of my personal assets to the foreign banks. I was becoming very stressed by all these happening and was not sleeping well.

Mr D was not having a good time either. He too was suffering from exactly the same problems as we were just emulating his investment styles and leveraging activities. I heard of incidents where he turned to some of other more cash-rich companies that he invested in to “borrow” some cash to bridge through some “margin calls”. He sold down quite a fair bit of his investment holdings to some “friendly hands” in a series of stock placements. At this moment, the goodwill and friendship he built over the years came to his rescue in these moments of “illiquidity” as the market transaction volume just dried up almost completely. However, the market prices of the stock holdings we used to secure our financing continued to drop by the days. Some of our friends and fellow “angels” were selling their holdings........and may just be in the same kinds of troubles as well. No one trus! ted each others at moments like these. Those that were selling their investments would not pre-warn their “fellow investors” as everyone would rush to sell at the same time! It was a time where everyone was for himself! My anguish did not escape the attention of the “director” on our board that Mr D posted in earlier. He flew over one day and was visibly concerned about the situation of my finances and of course, more importantly, that of the company. He sensed troubles as he knew that I too, had quite a fair bit of personal investments that were vanishing into the thin air in values.

By now, at the end of 2008, I was becoming desperate. Our company was going into the “audit season” and obviously, there was a large cash deficit that we would not be able to explain to the auditor. In the past, we could have just “arranged” for some cash to be credited into the bank account for a brief period to satisfy the auditors’ check. However, there was no such “temporary cash” to be found at any price as the sub-prime crisis had now developed into a full blown credit-crisis around the world. China was not spared in the process. With no where to turn to and the audit dateline closing in, I took the risks to “brief” the director of the true situation and asked for his help. I was surprised that he was not shocked by my confession. He had probably guessed it! In any case, the director asked me to remain calm while he would consult Mr D to seek some kinds of new financing to help bridge this difficult period. He asked that everything remained confidential as the last thing we wanted the world to know was the “missing cash” in the company accounts. H told me that quite a number of the S-chip CEOs were on the same boat and some of the “funds” that used to backed their IPOs have been able to extend some credit directly to them ease the pressure from the foreign banks, secured by again, stock holdings of the CEOs. Little did he know that my assets had almost been entirely secured by all kinds of creditors already!

Then the irreparable damage struck. I had borrowed some money from the local Chinese banks to punt in the local stock markets. The arrangement was such that I had to return such cash to the Chinese banks at the end of the year because they too, were subjected to annual audit. I had carefully maintained sufficient cash in our company accounts, which served as the “collateral to the conscience” of my friends in the Chinese banks. As I began to use them to fund the “margin calls” of the foreign banks and the amounts got further depleted by operation losses of the company amidst the worst economic crisis the world was now facing, my “friends” in the local Chinese banks were not going to take a chance on their own fate. They were definitely not “friends in need”. They simply deduct the amount I owed personally from our company accounts two days before their auditors came in, w! hich was of course, a few days before our company auditors came in. The rest was history...................

The auditor, which was an international firm, was not going to take a chance with their reputation. They formally informed our board of directors in early 2009. In other words, they were warning the board that the financial statements they were going to publish would be “disastrous” and could cause a serious enquiry by the regulators. I think some insiders proceeded to sell some of their shares before any official announcements were made but most of us were warned not to do anything with our holdings as that would be considered “insider trading”. Of course, all my older colleagues and company directors hated me as a consequence. I was asked to absent myself from all their meetings as they attempted to come up with a solution before the mandated result announcement date stipulated by the Stock Exchange. I was very scared. I had no one to turn to as even Mr D had stopped answering my phone calls. Everyone was trying to distance himself from me and it became obvious that I was going to be the “scapegoat”.

To protect myself, I seek the advice of some lawyers in China who in turn, consulted their friends in Singapore. To my relief, I was advised that should I be found guilty in the Singapore courts for misappropriating company assets, there was no established bilateral treaty as yet for Singapore court to extradite me from China. The China Securities Regulatory Commission, the securities regulator in China, had never once recognised their responsibility to regulate the S-chip companies listed in Singapore. In fact, the Hong Kong Stock Exchange had faced similar issues for decades in their attempt to regulate the P-chips, which were Chinese private enterprises listed on Hong Kong Stock Exchange, to no avail. In other words, as long as I refrained from stepping my feet on Singapore soil, nothing could be done to me. In any case, I thought given the hatred I faced from all my older colleagues and friends in the hometown, I should be taking some long overdue holidays. I relocate my family to a Chinese seaside town.

Although I was now an ordinary citizen, I was glad that my wife kept quite a far bit of the money I gave her along the way and that should be enough to last us a life time, at least in China. Through internet, I came to know that the company finally disclosed the incident to the Stock Exchange and the stock was suspended. They appointed an investigator but I was no where to be found. So it would be interesting on how the story could turn out post the investigation report. In fact, a number of S-chips suffered from the same problems and were suspended from trading soon after us. Inevitably, there were cases of over-stated revenues, fathom receivables, missing cash, over-leveraged financial positions of the founding entrepreneur who mortgaged away their own stocks, as well as outright manipulation of stock prices. In many cases, I suspected the irregularities had begun right from the very beginning, before the companies were even listed. Many were not real companies at the first place. My friends in the know told me that a few more had been discovered as suffering from “missing cash” and jokingly commented that the Exchange had to arrange for a smooth sequence of announcements just like the way they schedule result announcements of listed companies. With all these irregularities exposed and more promised to appear, the stock prices of all S-chips have literally collapsed. All my friends and their “club members” must have suffered tremendous losses. Some dealmakers and their syndicate members apparently were facing margin calls on daily basis and some even declared themselves bankrupt. It must have been a very trying period for everyone. However, I did not seem to have much sympathy to all these people. I witnessed how some of them became filthily rich in a short span of time without having to work hard, while other enjoyed a good ride in fortune just because they (or their friends or relatives) were in position of influence.

I was the only one that would be made a “scapegoat” and had to live a life of “exile”, while these guys could still just lick their wounds secretively and continued on with their life. I do not sym! pathize those institutional investors who lost their money as if they did, they were simply either incompetent or someone had benefited personally along the way in having committed their funds’ money in such investments. Curiously, I wonder who will speak on behalf of all the many ordinary people in Singapore who came to believe the investment potential of these S-chip companies after all the beautiful “packaging” the dealmakers and entrepreneurs wrapped around them, and went on to invest their life savings in the S-chips, only to find out one day that all these were worthless! So when dust finally settles one day, we shall all look back and evaluate what had gone wrong and who are to be blamed. I am sure all fingers will be pointing at the Chinese entrepreneurs such as myself, who are usually labelled as “greedy and unscrupulous”.

There is a ring of truth to that accusation and I admit I am guilty. But how about those dealmakers, who taught us how to cook the books? How about those angels, who hid their identities behind some dealmakers and exerted influences to assist them to succeed in their schemes? How about those institutional investors who trifled with the money entrusted to them? How about those intermediaries and professionals who were not vigilant enough to protect the interest of the investing public? I would like to end with a comparison. The Ming Dynasty collapsed only after the General (Wu San Gui) they sent to defend the border against the Manchurians opened the gate voluntarily to allow the Manchurian’s army to come into the Great Wall. General Wu did that probably out of a promise to be made a king later on and be endowed tremendous amount of riches by the Manchurians. Of course, the historians would like to add that he also needed the help of the Manchurians to defeat another general that had taken his favourite concubine. In short, the thieves and robbers are only usually allowed in by the insiders..........

If you have read the story till this part, I am sure you are either a victim or someone who is deeply interested in the development of the S-chips going forward. Please help to forward this email to any many such interested parties as possible. We need to put an end to all these irregularities lest more ordinary people on the street suffer unnecessary losses. In the process, you will help me to partially clear my name...... For I am not the only one to be blamed.................

Note:

1. Not everything is true in this story that I have just presented in order to protect some friends that still remain friends. In particular, the story before 1995 was inserted in only to give you a perspective of the difficulties that most Chinese entrepreneurs went through, and how they eventually all came to resent the ease and ruthless manner in which people like Mr D made great fortunes leveraging off their hard work.

2. At the same time, I sincerely hope that the investigation report that was pending in the case of my company comes out being at least “fair” to me. Otherwise, the more “real truths” will follow in subsequent emails......... hahahaha, the power of internet........


....My thoughts.... this is the dark side of capitalism. I am familiar with this dark side as I was involved during the fund raising when I set up by dot-com venture, trying to raise cash. I met up with different people from differnt walk of life, meeting up with many angel investors will be trying to cash out at IPO, disguising normal companies and pruning companies to be appealing to investors.

...My general guideline for those interested in S-chip, forget about textile companies (China Sky, C&G, Sinotec Fibre etc) , forget about companies whose receivables are ballooning and little or negative cash conversion (the shoe companies China Hongxin, China Eratet, Hengxin come to mind) ....forget about companies who are cyclical (Cosco, YZJ etc) , choose only companies with profit at least 100 RMB (or SG 20 Mio) annually...get companies who have been audited only by top 4, this will reduce your selection to only a few companies. In investing in S-chip, it is high risk high return, and do sufficient due dilligence.

I see no difference between shares in overseas companies like Wilmar, Indofood and Golden Agri vs the S-Chip companies. Only right now, quite a few S-CHip companies are really rubbish which drag down valuation of all S-chips. Separate the wheat from the chaff, find unpolish raw diamonds and you will get a multi-bagger.

Celestial Nutrifoods AGM

Attended the CN AGM yesterday.

- Biodiesel project on track, I poised a question on the prospects of Biodiesel, and according to Ming DQ, the project is viable, as it is using low quality and recycling waste oil. It should be running by next month

- on why CN continued to spend on Capex although the CB conversion is about 8-9 months away. According to Ming DQ, when they embarked on the plans it was before the financial crisis hit and there was no way they anticapted this. There is no way they could stop/cancel the payment as the projects have already started.

- On the CB (Zai Quan) topic which was a very hot heated topic, CN is still negotiating with banks for refinancing (rong zhi). Overseas banks are short of funds themselves, and although China banks are willingly to lend, the process is quite long, and may require tedious process on endorsement from government/state. They are now discussing and the chockpoints seems to be the valuation of the company to be used for collateral. (eg, roads and capital equipment have less/ little value) , interest rate etc.
They have been instructed to update every month to the SGX on the progress. When prompted further, they seem reluctant to say too much, maybe because they wanted to make a public disclosure first which will be out the next day or so.
The board have been trying different ways to including raising capital (gu ben) through rights, unfortuantely with the share price so low now, that option is absurd. Although this is also in the AGM, this is just going through the motion.

- when asked whether he had pledge his shares, Ming confirmed that he has not done so.

- when asked why he had not bought more, he says that if anybody lend him money now, he will do so...... I think that he has also been affected by the financial crisis, with his money maybe tighted up with some other things (property / other business ventures)

My thoughts: Ming seems to come across as rather an honest person, and sometimes we have to use out gut feeling to sense out the character of a person. If Ming and the other board members are dishonest, they will not have come for the AGM.

I also asked Zhou CN on the protein Milk schedule (dan bai nai), it seems it should be ready by next year end. This product future seems good as there are many Chinese in China, and the milk may not be enough to support the population. Throw in the Milk Scandal, and also Asian who are more lactose intolerant, I think they can penetrate and gain market share in this.

Some thoughts also, I have been looking at Celestial Nutrifood top investors, Cheung Wai Kwok was a major investor previously. ( >5%) and he has presumely sold out. He is also a chairman of Shenzhen Skyto Investment & Development Co, a company engaging in investment in PRC. Presumely, with the financial crisis, he had to cut his stake in this valuable company as well.

As investors, sometimes we have to use certain risk reward ratio and intelligent guessing to see whether it is worth investing when the future is murky and with short term setback. With risk appetite coming slightly back, Celestial price has been going up. The advantage to retail investor is that we can go in right now, but for many funds, they cannot do so unless they can ascertain a bright future for their invested company (and when this is so, the price has already gone up alot)

Celestial Nutrifoods Some thoughts

Celestial Nutrifoods reported its FY0809 earnings in Feb 2009.

CN at the point of announcement came from a postive cash to a negative cash balance (after taking into consideration the potential convertible bond 1200+ RMB) . This is mainly due to the heavy investment for the Protein Milk product. Some thoughts here....

Some points
1. China Milk Scandal from Wikipedia

2008 Chinese milk scandal was a food safety incident in the People's Republic of China involving milk and infant formula, and other food materials and components, adulterated with melamine.
By November 2008 China reported an estimated 300,000 victims,[1] six infants dying from kidney stones and other kidney damage, and a further 860 babies hospitalized.[2][3] The chemical appeared to have been added to milk in order to cause it to appear to have a higher protein content. In a separate incident four years before, watered-down milk had resulted in 13 infant deaths from malnutrition.[4]
The scandal broke on 16 July, after sixteen infants in Gansu Province who had been fed on milk powder produced by Shijiazhuang-based Sanlu Group were diagnosed with kidney stones.[cm 1] After the initial focus on Sanlu - market leader in the budget segment - government inspections revealed the problem existed to a lesser degree in products from 21 other companies, including Mengniu, Yili, and Yashili.

Here we see the China milk scandal breaking out in 16 July.

2. In an announcement 28 August, Celestial announced that there are spending 700+RMB in 100k tonnes in protein milk.

Over here, I believe Celetstial has already done its due dilligence for at least last month and has done enough due dilligence to see a great opportunity to go into. So within 2 months after the Scandal broke out, it committed to spending a high capex despite the knowledge of the impending bond conversion.

The CB issue while posts some risk, is in my opinion will be a walk over. Besides the points from my previous posts, lets look abit into its history. In 2005, Celestial was the only soya bean related company to be invited by the Daqing government to invest into the Soya Bean Tech high zone and had a interest free loan. Here it show strong links with the government (at least the last 1-2 years).

It has been going up by virtue of the recent rally. I believe it is apotential big retail consumer giant in China in the making, and with a PE of 1.2 I will continue to hold. It has been shorted heavily and I believe short covering fuel and once the CB issue is over, it will continue to attract stronger hands.

Mar09 update

I Have been rather busy the last 2-3 months
1. RT, or reservist training, this requires you to go for a physical mass exercise at the army camp twice a week for phase 1 (total 4 weeks) . If I fail, I need to go for phase 2 - 3 times a week . Having my neck injury last year prevented me from training for my IPPT.
And being not fond of running, I failed my IPPT the first time (after 3 weeks, 1 week was CNY). I passed all my station except my 2.4 km running which was 14:04.
Well running 3 km everytime really trained my physical fitness, and I improve leaps and bound. Finally on the 2nd time (the 2nd week of RT phase 2 - total 5 weeks), I manage to clear my 2.4km at 12:48. I really had to push myself very very hard to pass. I remembered when I ran my 5th round, my timing was ard 11:05, so I almost sprinted throughout my last lap to the extent of vomitting.
There were 2 things which helped me pass IPPT. First, I really trained and push myself during the RT to train up my physical fitness. It is really our own determination and preseverance whether we want to put any effort during the RT. One can just go to RT and waste time, but I prefer to make full use of it.
The 2nd thing, (maybe it worked for me only) I took some red bull before my run. I felt it boosted some of my strength and feel less fatique during the run.
Well the incentive of passing is that I pass last year and this year !

2. My MIL was feeling rather depressed after her ops, and so she came to my place for recuperation. At least over here, she will have less things to think about. So she was here for about 3-4 weeks. And this made me rather busy as I had to take care more of my son with my wife taking care of her.

3. My wife was involved in a car accident and 2 months after the accident, the other party issued a legal letter to us claiming medical fees and legal fees. These people are really greedy and unscruplous. My wife car hit their car from a stationary postition (both cars was stationary before my wife pressed on the accelarator), It was my wife fault (she was really very stressed during that time with work and her mother operations) and we agreed to pay for the car repairs which came out 4k ( their toyotoa corolla) . Our car was only slightly dented.
During the settlement, we agreed that there were no injury. This was also stated in the report filed to the insurance. However 2 months later, they wanted 8K -10K a person (3 person) and 3k of legal fees each !
In the medical report, it just stated there were only soreness detected. No X-ray no MRI. Of the 3 person, only 1 got 1 day MC, the rest went home the day itself !
We could either reject their claims and fight legally or negotiate with them. Our insurance company suggested the best way was to negotiate with them, as the legal fees at the end of the day might be more than the negotiated amount. I agreed with the settlement although I felt rip off because my wife would be the person who has to spend the time if we go to court. At that time, her mother was having depression and her company was going to retrench people. I think the best thing to save hassle is to settle this. If this happened to me, I will go to court against them. Money is not an issue, If they want to play punk I will play along, it is a matter of principals, I do not want to get rip off and stamp upon.
Well at the end, through the insurance company advise we settled this at 4.5 K a person (including legal fees). What a rip off!

4. My company I am in is doing badly. We had a restructuring where our section was badly hit (20%). Then, 1 person left on his own with no replacement coming in. His job responsibility was assigned to me, and effectively I am doing 2 persons responsibility. I had to work several weekends and even during CNY, I had to work till 2-3 am to finish my work. Also to make it worse, with the restructuring many things/personnel heads were new and had to start from scratch (Business reports and Sales incentives calculations)
Things at least came down quite a bit, with some negotiating some of my previous work (1o%) to my manager, and setting up certain guidelines and framework already , I also manage to automate some stuff.

As a result, my shorting of the market was disastrous. I actually wanted to short the market in Jan (860+) when Obama was giving his speech, however I fell asleep as I was really tired out and I missed the opportunity. S&P dropped to 660+ before rebounding. It rebounded 5% when Citigroup announce they are operational profitable, and futures was postive, and I went in to short (721). It was really v emotional and stupid. After shorting, actually I knew I was v wrong, but I was hopeful that it was a short bounce. Wrong, it went up till I finally covered at 771. Actually I should have considered cut loss quick and change to another position (higher reward risk ratio).
Risk reward ratio was not really there shorting. It was a costly mistake.

I have to really learn from my costly mistake, when I do not have time, do not short (trade). Emotion was also running high which made me into an errenous mistake. What was I thinking ? I was thinking maybe S&P may hit 600... but the risk reward was really not there. Really dumb of me.

Is this the bottom ? Nobody knows, but S&P after 2-3 weeks is around 815+ ( a rally of >20% from its low).

Where to go from here ? Obama and the FED are committed to spent and spent their way out. Is it sustainable and will this lead to the recovery ? I believe yes, but at a costly price of hyperinflation with things to come. Oil has already recovered fr a low of 34+ to 53+. A bit late to get inside.

My portfolio has also took a beating down 30% with Celestial dropping fr 37 to 10 cents. Its PE is now less than 1 (0.7) and P/B of 0.1/0.7. A steal and is really a golden opportunity. Why did it hit so low ? Many China companies are facing accounting scandals, inflated cash (FibreChem), receivables cannot be reconcil, suddenly bankrupt although record profit the quarter before (Ferrochina), owners who pledge their shares for loans suddenly have to pay up (beauty China) and they do no have the cash.

Also, it has a convertible bond that they might potentially have to pay back (1200+ Mill RMB) in June 09. With their full-year report, they are net cash of 810+ cash, short of 400+ if we consider full conversion. This risk was also highlighted by PWC auditors.

There are some risk here, however this is what I feel
1. Many scandals in the US lately (Madoff) are caused with dubious/ficticious auditors. At least PWC has audited them and cleared their financial balance sheet.
2. This is the worst scenario of 100% converesion. I will expect prob 60-80%.
3. When they announce their soya bean zone which costs 1bil RMB, they had only 0.1 bill annual profit. They had pulled through risker projects before and I believe they should be able to pull this through
4. Although credit is tight, banks in China are still lending ( recent reports show China banks lending increase last few months). Banks generally will lend you money if you show that you have little issue of paying off. With strong cash flow of 500+ RMB a year, and Net tangible assets of 2-3 bill RMB, I believe banks will lend to them.
5. I have read some forums of the risk of transmitting RMB/other currency overseas. This is overblown as I see it. Many multnational companies have to do business overseas, it will just take longer (some custom declartion) to transmit the legitimately overseas.

All these cause Celestial to become dirt cheap now. Most people are now keeping clear of China companies . I have been buying because at this price it is really a 20-30 bagger in the making.

What are Celestial future plans ? In end Q1 they are rolling out the 100 K tonnes biodiesel business - a opportunistic time with hyperinflation (I expect oil to be the first one to shoot up) coming. They are also rolling out protein nutrional beverages 15K and 5K of powder. With retail products the contributing 56% or revenue and almost 72% of gross profit, I believe with their brand name and distribution scale they can quickly scale this up.

I am formulating some plans now to see my next step.