I got excited about the dividend and commented on valuebuddies thinking that it was a great announcement and got "slapped" with the reality. The dividend is actually much lower since it was a post consolidation dividend. If based on previous year dividend announcement, after share consolidation, it should be 2.75 cents (as compared to 1.80 cents declared for FY 2016).
|The Conversation In Valuebuddies|
Anyway you can read about my previous detailed write up about Vibrant Group Limited here. Thus, I am not going into details for the FY 2016 financial statement.
Currently, this stock is in the money for me but I am still not selling because...
1. Price is Still Significantly Lower than Net Asset Value - Net Asset Value still remains close to the figure I stated previously, at $0.6702. The current share price of $0.350 is still about 47% discount off the Net Asset Value.
2. Dividend of $0.018 - Although this is still much lower than the previous year dividend (Should be $0.0275 if based on last year dividend after 5 to 1 share consolidation), but for me who only bought Vibrant Group Limited after share consolidation, this is a piece of good news since the dividend yield is at 5.1%.
3. Proposed Disposal by Shentoncil Pte Ltd of 60% of the Shares in Eceil Pte Ltd for $75M - This announcement caught me by surprise. However, this is a very good piece of news.
As per previous announcement, Cecil House is valued at $110 Million.
Then, as per current announcement, Vibrant Group Limited sold 60% of Cecil House for $75 Million. This meant that 100% of Cecil House, currently, is valued at $125 Million.
Without doing anything much, Vibrant Group Limited has made a steady gain of about 10%.
What are the question marks?
1. Still Highly Geared - The company has increased its bank borrowings to over $448 Million. This is a significant amount and will have a toll on its cash standing.
2. Much More Associated within China - With the sale of the Cecil House to another China Company, the company is associating itself much more with China Firms. This is a worrying trend for me due to all the past scandals of these China Firms.
Current Price: $0.350 as of 2 July 2016.
Please do your own due diligence before you invest in this stock.
Do note the author is vested in this stock/company at $0.305.
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