The Mathematics of Clifford Modern Living...

Disclaimer: Author has a lot of shares in CML

 ...before and after the commencement of trading after the special dividend announcement.

For whatever reasons only known to the owner, management declared a special dividend as well as a final dividend, which total to 0.375 HKD per share.

The last closing price (which is not important, let me explain why later) is 0.59 per share. The last immediate price was 0.56.

Pre-announcement (of special dividend) 

Clifford ML was always cheaply priced as its business wasn't really growing, and it was trading close to net cash per share. Figures are extracted from its latest annual results.

Term Deposits: 120m RMB
Cash and Eq.: 591m RMB
TOTAL liabilities: 121.21m (current) + 50.336m (non-current) = 171.55m

Net cash (net of all liabilities): 539.45m RMB or 583.47m HKD

Total shares outstanding: 1015.75m

Net cash per share = 0.574 HKD

Total dividends declared for work year 2023/4 per share : 0.332 HKD + 0.043 HKD = 0.375 HKD per share

net cash per share AFTER dividends are given out= 0.20 HKD per share. 

Post-announcement of special dividend (02-April-2024)

As I wrote, CML trades at 0.72 HKD a share.

If we assume today it ex-Dividend, that would be 0.72 - 0.375 = 0.345 HKD per share

Out of this 0.345 HKD per share, 0.20 HKD per share is pure cash. The remaining business is now valued at 0.145 HKD a share or 147.3m HKD

If we assume that going forward, the company is going to earn 80m per year, that means that you are paying for less than 2 years of earnings net of all that cash.

Even if we were to conservatively estimate that the ONLY profitable (according to page 9 of the latest result) segment going forward is its main property services company, that would be 60m RMB a year or ~65m HKD a year. That means the current price of CML 'costs' about 2.5 years of earnings.

huh?

The fastest way to show anyone and everyone... that the cash in the books is real... is to give out special dividends... right?