It is also noted from other sources that its 2003 IPO details were as follows:
i) total shares offered: 160 million;
ii) offer price: 23 Singapore cents
iii) historical high since October 2003: 42 Singapore cents;
iv) historical low: 2 Singapore cents;

v) PE ratio: about 134;

 

 At the current price of about 2.5 Singapore cents per share, it is therefore going at a discount of about 80% to NAV! This, plus the fact that its CEO/MD Mr Liu Fusheng was said to have tried in the last year or two to buy out other shareholders, while a Hong Kong company was said to have tried to take over KXD at about 22 Singapore cents per share would suggest it is a matter of time (perhaps sooner rather than later) that the current bottom price could trigger off fresh bids by interested parties. However, irrespective of whether the foregoing is correct, can some expert please advise whether KXD is a good bet/buy at 2.5 Singapore cents for the following reasons:

a) it is not a hollow company and has been operating a good and successful electrical/electronic manufacturing business with markets in the East and the major Western markets including the US and Europe since 2003;

b) its business is still ongoing;

c) it is a Singapore registered and listed company and is subject to Singapore law and accounting rules (auditors are Deloitte Touche);

d) it still has net assets in terms of cash, business receivables, plant and equipment totalling over RMB438 million (about S$86 million);

e) its executives own shares in the company and are unlikely to let the company go bust or even let it be taken over for a song - on the other hand, with KXD's present status as an ongoing concern and with the current high prices of commodities like coal, gold, oil, palm oil, etc., all it takes is for KXD to acquire a project or enter into some joint venture relating to such or other commodities for its share price to go up (see point 8 above regarding the KXD's declared intention) - with outsourcing nowadays, that KXD has no experience in commodities or their extraction/dealings should not pose a problem to it diversification, see for example how engineering Jade has outsourced its Indonesian coal mining project to a company with such expertise;

f) at 2.5 cents per share, the downside is relatively low but should it go back to 42 Singapore cents one day, that would mean a 1,680% capital appreciation!

g) at the steep discount of about 80% to NAV, it is a good target for take over or reverse takeover, or even for existing bigger shareholders to try again to buy up the rest of the shares whether to take KXD private or otherwise;

h) at such a low price, it is relatively easier to make 100% or more in capital gain if the counter just rises a few cents.

 

Since the PE ratio of about 134 is high, this counter does not appear to be a good one for income/return, but can some expert please advise whether it is a good stock for "suicide-investors" meaning, those not looking for returns but who are going for capital gain and who are prepared to use a relative small investment or capital sum to "die" with KXD executives holding KXD shares i.e. to swim or sink with them by sticking it out to the end with their respective shareholdings?

 

This is a request for expert advice from seasoned punters or those who may know something about KXD which others do not, and is not an offer, request or inducement to anyone to invest in or not invest in KXD shares. Please therefore do not believe in or rely on what is said above and conduct your own checks, investigations and due diligence and make your own decision at your own risk no matter what you intend to do i.e. caveat emptor!