Wilmar - Taboo subject at Investor Briefing

At the Wilmar Investment Briefing today, a CLSA analyst asked Mr Kuok which banks were pulling the credit lines from Wilmar. Mr Kuok "Tai-Chi-ed" to his CFO who said that one bank had withdrawn its credit line because its top management had decided to stop commodities financing.So why did Mr Kuok mention first about some banks pulling the plug in his presentation?Isn't it taboo to mention it in such a briefing, like how the "retrenchment" word is taboo in the workplace now? A Straits Times Market Correspondence praised Mr Kuok for his candourness in nipping any suspicion in the bud and Mr Kuok being a role model for others to follow. Definitely, we agree this is admirable.( Just to side-track a bit, the above clearly shows how serious this credit mess is...)

But then again,we, being ones who are highly imaginative and bizarre in thought at times, thought of another possible reason for this candourness..... maybe he wanted to highlight about this so that people would scrutinise extra careful the debt profile of his competitors, and possibly punishing those companies who are weak.( low share price then acquire??) So we, being the curious type, decided to take a look at the current assets(CA) vs the current liabilities(CL) of their competitors. OK, all of them seem to have CA larger than CL. So maybe we really have a bizarre brain.We will leave it at that.

Anyway, the new kid on the block, Kencana Agri Ltd who just IPO-ed this year don't seem to have a good cash flow compared with its more established peers.Don't even mention about Free Cash Flow..just look at cash flow from operations which is already negative.

(just added)And, DBS Vickers just released a report and it shows Wilmar having a higher Net Gearing compared with her peers. (Wonder why they didn't include Golden Agri, like, huh....don't they know Golden Agri is an important competitor??).

Citigroup - Should we follow Abu Dhabi Investment Authority and GIC?

Our barber told us today that he recently bought 16 shares of Citigroup. He just said he felt inspired to buy Citigroup after watching their advertisements and that he just hope that this bank will not fail or else that chio eurasian girl he has been bioing would be out of job. We just love this barber for his cute way of thinking. Anyway, we decided to check it out. Let's use the GIC and Abu Dhabi Investment Authority (ADIA)'s investment as the basis of analysis, and not ratios, balance sheet, tier one ratio and stuff.

From Citigroups 2007 statements (Above)
From GIC's press release (Above)

Comparison (Above)

From the comparison table above, both ADIA and GIC would have the option to convert the Citigroup ( Citibank) share to a common stock at the price of around $31.83 - $37.24 ( around 2010 - 2011) and $31.2 respectively, given the assumptions and assuming no adjustments.

Therefore from the above, an inference can be made that GIC or ADIA could be expecting Citigroup's share price to be roughly at least $31-$37 by late 2010. The price of Citigroup share now is hovering around $11-$12. So, is this a good buy now since GIC and ADIA has already invested in it?

Well, having seen the saga of ABC Learning, it might be wise not to follow these entities blindly since who knows what their real motives are. "Transformers, more than meets the eye...doh da di da da...autobots..." Furthermore, ADIA and GIC made these investments in Jan 08 and Dec 07, where the full seriousness of the crisis was still not widely known. So do you think its a good buy? Sharing is caring!

Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team