QUOTE(tsd @ Aug 28 2008, 02:52 PM)
Huaan secures coal at very low price and it is located very near to big coal mines, so it does not have to spend very high on transportation. It has also secures long term electric supply at a discounted price, besides that it also has special tax incentives from the Gov of China. Everything looks positive.
you can find the latest balance sheet, cash flow from www.klse.com.my under announcement.
It can be view as half full or half empty in term of special tax incentives and others cost factor as mentioned (buying at discount price).
1. If those being taken away, then it might not as profitable as it was/is. So for half empty view, the company is not as profitable or competitive as it looks because those cost price is not according to the normal market price as well as tax incentives wise.
As those discount price purchase or tax incentive wise although might be long term, but we knew it is not forever, that's where market concern of.
2. Half full view, those lower cost will able the company to register more healthy profit to the company.
Generally, as market is forwards looking mechanism, market generally tend to take the view on (1) more than (2). Because market generally more concern about the true competitiveness of the company.
It is similar to TNB, although TNB registered billions of profit, market generally doesn't react quite positively because market knows TNB is buying natural gas from Petronas at huge discount price compared to market price. So its share market price generally being traded at a discount compared to its peer.
Don't mean to comment on Huaan whether it is good or bad. Just some experience that how market view on a stock generally.
Judge you own.
Added on August 28, 2008, 3:15 pmBtw, you or anyone can explain why they want to list in KLSE in the first place by reverse takeover of Antah? I am still struggling to find a reason for it.
As listing elsewhere particular in China market or HK, they can easily chalk up more premium on their share price compared to KLSE. As we knew KLSE performance wise is not so good compared to others regional market.
This post has been edited by cherroy: Aug 28 2008, 03:15 PM