Thursday, November 3, 2016

"One with the F&B Business That Got Listed Recently"

I thought about whether I want to really write about this "falling knife" since it only gotten listed recently. Writing it may make it worse for the existing shareholders.

My rationale for looking at this stock was because:
1. It is in the food and beverage business - something my portfolio is lacking and something I am interested in.

2. The price has been falling - After reaching the heights of 40 cents after IPO, the stock has been coming down till $0.240 as of today.

This stock is Katrina Holdings Ltd.

It is a F&B management company of the branded restaurants below:


However, I will not doing much analysis on this stock because I decided to ignore it once I saw its latest half-year balance sheet.

The printscreen of the balance sheet is shown below:

Do note that this balance sheet was in Jun 2016 prior to the group getting listed in Jul 2016.

So did you notice the issue?

There is actually an amount of $10 Million that is due to directors prior to listing. Why?

This actually make me question the rationale of getting the stock listed. I meant once listed, wouldn't the company use the funds to expand rather than pay back the directors?

Furthermore, this also meant there will be less money for dividend right? Since $10 Million will be paid to the directors first.

This just does not make sense to be part of its minority shareholders. But never say never, if it falls until a very low price (below IPO price for example), I will also come back and review the financials again.

For those who are interested to understand and find out more about the Enhanced Triple S Scorecard with the Dividend Scorecard Portion, you can come for the 4th Sharing Session with T.U.B! If you are interested to attend, do not hesitate to contact me directly.

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