CML was sold down as many as 6% today. This was due to an announcement the night before, that they have purchase around 30m HKD of Gold. Their plan, is to allocate 180m to Gold investments. In the wake of such a run up in gold prices, this feels very risky.
They declared that they completely disposed silver investment of 387.9m RMB. According to the interim report, they have about 206m RMB of cash, and 80m RMB of Term Deposits. Payable outweighs Receivables by 70m. so let just net off the Term Deposits.
That means CML has about 590m RMB in cash prior to this purchase or about 660m in HKD. The market cap, today, 843m.
Personally, even if 180m of it is squandered, that leaves about 410m of it in cash, about half of the market cap. It does feel like overselling. Hopefully today's selldown give pause to this 180m-going-to-gold plan.
I believe most of the shareholders were expecting some kind of dividend. I have no expectations-- I have already doubled my investment in this holding and sold down some months ago. Ideas in my mind are running thin and I am not sure what to do if I do dispose of my shares.
This is frustrating-- if they decided to do another large dividend, it would definitely mean a big heyday for us current shareholders-- especially when the business they are in is not an exciting one.
There is a voice beside me that says-- when in doubt, sell half.
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