Kingboard Chemical Holdings' share price is in crash-and-burn mode. Going up in flames appears to be the hope and expectation of a small band of institutional investors and their brokers who became avid followers of this maker of paper-based, copper-clad laminates. Company shares closed at 98 cents yesterday. This was down 7.5 per cent on the day and 23.4 per cent on the close five days ago. The close is 65.3 per cent off the 12 month high of $2.825, on July 7, 1995. Kingboard's share slide began when investor sentiment towards the company was battered on the release of group interims. In December the group announced interim profit attributable to shareholders at $35 million, to the end of September, up 9.4 per cent. Analysts, according to The Estimate Directory, had been expecting 45 per cent attributable profit growth for the year ending March 31, 1996, to $90 million. In the light of the interims, analysts downgraded their year-end forecasts. Profit expectations appear to have gone astray because of an apparent change in accounting policy at Kingboard, say analysts. The change led to the company taking more start-up project costs up front, through the profit and loss account, instead of capitalising them, analysts say. Profit expectations also were hurt because of increased competition for laminates of the type made by Kingboard. High raw material costs and falling end-product prices also triggered a margin squeeze. In the wake of these results, investor sentiment was further hurt by director sales in company shares at more than $1.50. Credit Lyonnais Securities Asia estimates that between January 12 and March 1, two directors bought a total of 850,000 shares at between $1.57 and $1.67 each. In notifications of dealings between January 1 and March at least three directors sold about 5.85 million. The shares sold represented about 1.7 per cent of the issued share capital of the company. Investors would have done well to follow closely in the footsteps of the Kingboard directors' trading. Investor sentiment towards Kingboard shares also is being hurt by analysts' worries about possible company provisions amounting to $10 million on inventory write-downs and about $5 million on bad debts. Estimates of where the year-end profit might end up have dropped to $55 million in recent weeks. The company made no comment yesterday. Analysts are still trying to get a clear picture of what is happening at Kingboard. Investors would like the company to issue some kind of clarification on the rumours surrounding the company to help them assess what risks, if any, lie ahead for holders of Kingboard shares. Clarification of directors' dealings and their notification of dealings since January 1 also would be helpful to investors. The group of investors who feel really miffed about the way things appear to be turning out at Kingboard are those who picked up the 30 million shares issued in June last year in a private placement at $2.30 each. No one is suggesting Kingboard is suffering from anything terminal. Analysts, however, feel bitter about recent events at the company. They also are unhappy about the way the management appears to be handling the situation. A clear statement today from the Kingboard directors on these matters would go a long way to clearing up some of the uncertainty surrounding the company's shares, say analysts.