I finally found the taiwan post strongly disagreeing with the claims made by xkm re China based assets and the value of long leaseholds.
<Re: They are not going to buy in stock 6-Jul-10 06:01 pm We disagree. Long term leases like Koo has are extremely rare, valuable and are traded frequently. When he built his factories he bought leases for long term periods. And he bought extra land lease rights. Recent 10Ks will show that he has sold some of those leases on unused corners of his leased property at values far exceeding his cost. These leases are traded and sold every day in his area. His cash hoard does not have to leave China to be valuable. Credit is tight right now and his cash has value. Further it is in the golden currency. The question is whether the sale of the entire company's assets to a competitor is worth as much as the liquidation of the land, cash, and brand / relationship. While I might agree that top management's abilities are open to question, Koo remains one sharp cookie. With the right partner or investment banker I expect he will get good value for his assets. Rating :
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I have seen no reply to this post.
I am long NTE.
Thanks for passing the message on from "xkfmx." You have the wrong year though. This is 2010, and your^X^X^Xxkmfx's comments about moving the AGM were this year.
It's funny to think of poor foolish specsit posting all the financial data on EMS houses that I put up here. At the time he ripped into me, assuming I was a short since I posted factual info. Thanks for the funnies at least.
You're probably going to get toasted on this one. I tell you this with respect, as you have posted much better info here than the poor wretched bulls. But you are going to lose this time.
Specsit XKMFX was referring to last years AGM. After years of having AGM in NY at Pennsylvania Hotel in 2009 it was moved to Canada:
"Press May 11, 2009 - Nam Tai is moving its Annual General Meeting from NY, USA to Vancouver, Canada."
I understand Koo lived here and probably still has a place in Vancouver. How convenient for Koo.
In 2010 the AGM was moved to California to their SEC lawyers offices. Could it be the Koo is buying up more Napa Valley wine. If so again how convenient for Koo.
"Press 2006 - $200,000 bid by M.K. Koo of Hong Kong for a 6-liter bottle of Screaming Eagle." This guy has got some money!
only second time on board but comment re Koo
should ask management that leave what think of Koo.
W. Lee - prev CEO 2006/7
M. Yasukawa - prev CEO 2007/8
K. Wong - prev CEO (leave after 20 yrs) 2008/9
you get very bad like scary crazy senile guy from prev management
and always change CEO, then Koo come back
he always run company no matter who named
resp for good but also now bad
Thanks for addressing the bogus senility issue. These comments, plus your earlier comments on the market for landleases and other company assets which started this thread, are well taken and much appreciated.
I am long NTE.
Thanks for the perspective. I didn't go, I'm not on the left coast.
Fact-wise, good luck getting traction around here. Even just on the location of the meeting ... Both bears and bulls on the board have been accepting xkfmx's weird claim that the annual meeting was held overseas this year. Either nobody here actually owns any shares --> no proxies, or else they don't read the filings.
When I read claims that big money-burning US and Canadian EMS players have "recovered," or claims that Foxconn is "in trouble," I lean toward thinking that the frequent posters here read nothing but message board posts and the Associated Press.
Anyway good luck.
OK I will bite on this open invitation to respond....
Firstly, let me copy my original post and CLARIFY FURTHER (Start of Expansion of points in CAPITALS):
Hard to make case to invest based on asset value ie cash and land, when underlying business is evaporating. I CONTINUE TO FIRMLY BELIEVE THIS! Anyway, liquidation academic as I doubt Koo would ever allow this. However, it does go to motivation of a buyer more than liquidation. However, I also believe that Koo would try to block any purchase attempt anyway with his substantial wealth through lawsuits etc. By the way, if Koo disappeared and good new mgmt I would look to invest here again.
Firstly, land is not owned in China only leased. Also, doubt any takers to buy.
CLEARLY MY ORIGINAL STATEMENT IMPLIES EVEN THOUGH LEASED THAT THE LEASES ARE TRADE ABLE. So I don't disagree here with the post from Taiwan. Leases in China are 50 years and Nam Tai's leases probably have around 30 years left so they are trade able.
HOWEVER, I ALSO STATE UNLIKELY ANY TAKERS. What do I mean here:
Manufacturers, given labor dispute (refer to the biggest EMS FOXCONN suicides and labor issues as examples) and rate escalation, are moving into more rural China and out altogether (FOXCONN moving work load into TAIWAN and VIETNAM as examples). So I do not think any commercial takers!
Can it be converted to residential...maybe with a lot of work but even here value and demand is greatly reduced.
Second, most of cash is trapped in China.
WHAT DO I MEAN BY TRAPPED. Say Nam Tai elected to distribute cash to shareholders. As it leaves China there would be a 20% penalty imposed assuming all paperwork handled properly...this is not a given. Also Nam Tai has enjoyed a very low tax rate on profit by reinvesting in China...this element is totally trapped ie cannot come out but must be used in CHINA (I don't know how much of the $200M this represents but probably a significant amount)
So if uninspired incompetent management cannot figure out a business strategy in China little value here!
SO LEASES AND CASH ARE OF COURSE USABLE IN CHINA IF the MGMT CAN FIGURE OUT WHAT FOR...I HAVE NO FAITH HERE!!!!! I do agree that one of the best uses of cash was the buy back of Hong Kong sub. However, this certainly used up all none China cash so what is remaining I believe has the restrictions stated above. And yes the Yaun is a golden currency if one has uses for it in China.
Also, by uninspired, I mean that Nam Tai has had significant cash for a long time and outside of Hong Kong listing buy back have not figured out a way to use it effectively to generate EBIDTA. And NO NO NO...integrating into flexible printed circuit production is not what I would call smart. The Wuxi facility I understand is empty of workload after significant investment.
HOPE THIS IS NOT TO COMPLEX FOR YOU ALL TO UNDERSTAND. I have tried to keep it simple. Anyway, I tier of posting on this board and this is absolutely last one!
However, will peak in periodically to see what you all are saying. If I see signs of a turnaround I will through some money back in....