Lai See

Wison chairman cashes in on company's bonanza results

PUBLISHED : Friday, 23 August, 2013, 12:00am
UPDATED : Friday, 23 August, 2013, 5:57am

Hong Kong-listed Wison Engineering has turned a few heads recently, not least because of its eye-popping first-half results, announced on Wednesday. Profits attributable to shareholders were up by a whopping 7,224.3 per cent while revenue grew by 131.3 per cent and gross profit soared 92.8 per cent.

Wison, which listed in Hong Kong at the end of last year, is an EPC (engineering, procurement and construction) company and makes most of its money from its coal-to-oil business. Some analysts in the finance industry watch it as it's a peer of Sinopec Engineering Group, which listed in Hong Kong earlier this year.

Although Sinopec is bigger, Wison's benchmarks are better in some areas and it has a bigger order backlog and a higher gross margin, according to Simon Powell, CLSA's head of Asian oil and gas research.

Wison attracted attention a week ago when the company had to scramble to set up a conference call to deny an Apple Daily story that the company was linked to Bo Xilai. Despite denying this the stock fell 15 per cent.

And then just to add to the intrigue surrounding the company, it announced a dividend payout of 5.74 fen on earnings per share of one fen. This is equivalent to a payout ratio of 574 per cent, which is highly unusual since the norm is about 50 per cent. Why such a big payout - to help restore confidence in the company?

However, the chairman and founder Hua Bangsong owns about 80 per cent of the shares so most of this will go to him. When the chairman takes most of the cash out of the company, this can hardly be construed as being good for confidence. So what's going on?


It's not 'appening for BlackBerry

Not many people may know that almost a third of all the apps available for the BlackBerry are produced by the Hong Kong company SB44 Limited. Altogether it has produced some 48,000 apps for the BlackBerry.

However, quality is often more important than quantity. Some of their apps don't seem particularly useful. Mega Shaver, for example, reproduces the distinctive sound of an electric shaver. Others of a similar genre include Mega Machine Gun and Mega Fart. As the website Quartz notes, this is hardly award-winning material, and illustrates a BlackBerry weakness.

BlackBerry boasts a mere 120,000 apps, and without SB44's contribution would have a mere 72,000. This is pretty meagre compared to Apples' App Store which has about 775,000, while there are 844,000 Android apps.


Cars beat wine and equities

The record price of US$27.5 million paid recently for the 1967 Ferrari 275 GTB/4*S NART Spider at an auction in Monterey, California, was an instructive reminder of the performance of the classic car index.

This will not be news to classic car owners, but over the past 10 years its performance has been almost double that of other exotic investments. Since 2002, art has increased by about 50 per cent, classic guitars by 100 per cent and the MSCI World index by 180 per cent. Wine, spurred by buying from mainland China, has also done well, rising by about 200 per cent. However, all these have been eclipsed by classic cars which over the 10-year period have risen by almost 500 per cent.

So does the recent Ferrari sale mark the top? Not necessarily say some connoisseurs, who believe that the market has not seen much action from the mainland.


Where do the flows go?

Inflows into hedge funds picked up in July after declining in June, reports Financial News, quoting figures from Eurekahedge. Total industry assets increased by US$15.1 billion to US$1.89 trillion month on month.

Two thirds of the performance was due to the rise in asset values and another third from net fund inflows. Regions in which investors showed the most interest included Europe, which saw US$3.6 billion in net inflows - the eighth consecutive month in which this has occurred.

There were also net inflows into North America, while Asia ex-Japan and Latin America saw net fund outflows. As for strategies, funds with a strong exposure to equities were the most popular, while the least popular were arbitrage hedge funds and managed futures funds. Hedge funds recorded average gains of 1.02 per cent last month.