liveindices.com

[benji33]

Think the 30++ cents stocks like Sinotel may be able to lead a rally for Oceanus

[inphyy]

Another New Venture

�� With regards to the 2nd TDR program, management
said that they have submitted their application to
the Taiwan Financial Supervisory Commission,
Executive Yuan, Securities and Futures
Bureau on 14 July ’10 and has received some
queries. The company is currently attending to the
queries.

�� Assuming approval is obtained on 4 Aug ’10, the
indicative time-table would be for the listing of the
2nd TDR tranche by 31 Aug ’10.

�� In the latest copy of “The Edge”, the company’s
Chairman Dr Ng CY has been quoted as saying that
their entry into the restaurant business is facing
challenges and has been loss making (Rmb9.6mln for
1Q ’10) and that he is contemplating restructuring
the operation. According to Dr Ng, their strength
is not in being a restaurant owner. This is expected
to result in impairment charges estimated to be
around Rmb20mln.

What’s more of a concern is that the company’s
new foray into lobster farming is expected to face
significant capex in the region of $40-50mln and
the production site is only expected to be
established in 2H 2011. What this implies is that
start-up costs similar to their the new set-up of
the restaurant business is to be expected.

�� The successful execution of the new lobster business
would see 14-15 months for the baby lobsters to
reach a marketable size, much shorter than the 36
month period for their core abalone business.
However, according to Japanese broking house who
covers the company, “grand plans laid out by
management in the past have not always panned
out”, indicating potential execution risks, similar
to that of their restaurant business.

LIM & TAN SECURITIES

[rtaylor]

Nice sharing