Update on Foreland

First thing first, yes i'm still holding Foreland at 9.9c as mentioned in my post early in March.
Small-investment-foreland

Today, foreland (or forlan as EDMW calls it), made a big surge of almost 25% ! This was following a smaller surge of about 10% the day before. What caused this surge? Probably sector rotation play since China Taisen, Qingmei and even Eratat did big moves today.

The mistake I made was that I was lazy and didn't go ahead to analyse on Foreland's Q3 results (as opposed to what I told myself to do). I had initially wanted to wait for the Q3 results and decide if I wanted to average down. And looking back, I probably might have taken the risk to do so at about 3.0-3.5c... Let me try to present my FA based view on this.

Firstly, let me start by saying that the slide of Foreland is inline with what the whole fabric industry is experiencing. Tighter margins and as a result, losses are made. The executive chairman had also dump some of his holdings during this time.

However, there's a saying that knowledge that FA will provide support and form a base/turning point.

In this case, the turning point was about 3c.

Now let's look at Q3's results.

1) P&L:

 Net loss after tax was RMB ~920k. I personally had expected a bigger loss but am still confident that the company will become profitable since the comparison quarter's profits was RMB 54million! The only concern here is the small margin from sales and cost of sales.

2) B/S: This is what I was looking for.

Total Liabilities: RMB ~51million
Cash and cash equivalents: RMB 317million
Supposedly, Foreland need to pay out all current and non-current liabilities right now. Foreland would still have RMB 266million in CASH alone. We aren't even factoring in receivables and fixed assets at all.

Group borrowings are ZERO.

Number of issued shares at end of Q3 is 542,424,199.
If we take the RMB 266m above (after liabilities) and work out the cash per share, it works out to RMB 0.49 per share! (Assuming RMB 5 = SG$1, we have about close to 10cents per share!) The share price when the Q3 results were released was only 3.3c! This alone should have been enough motivation to buy more if you believe the accounts to be true. The auditors are Baker Tilly (whom are a mid tier audit firm)

Lastly, if you like to look at NAV, it's currently at RMB 1.28 = SGD 0.256...

Sigh... Now I can only look on and consider I should average some now or if I should wait for retracement to keep more...