it is so easy to push up a counter in the channel news asia forum, just as it is easy to push it down. the piece below is how a person with the nick xueqi tries to advice people not to buy MIIF cause they are cheating us. Now, i for one will tell you it is not easy to understand their balance sheet. however, it is another thing to publish so called facts this way to create havoc to vested investors. the person in the quote is nickname bkkguy, but he is not the one that made the post as it is lifted to sgfunds forum.dnhh is explain why he feels what was posted is baseless.
Below are from MIIF’s first quarter report for your reference :
“MIIF’s Net Asset Value per share has decreased during the quarter, from $0.99 to
$0.96. This is largely due to the payment of a 3.1 cents per share dividend to
shareholders on 29 March 2006.”
You can see when they pay out 3.1 cents of dividen, NAV also drop 3 cents.
Check the B/S of MIIF again. Add up all the changes in Fixed Assets and Current Assets – Current Liabilities and Non current Liabilities. The ans is obvious not true.
From their cash flow statement, their cash flow is negative, because they pay out more than they earn. the dividen mainly from revalue asset and
some from new fund rising when they buy new asset.
I believe they can continue pay high dividen, but the NAV will drop as well,
of cause they can manage the NAV upward then pay you high dividen cos some their asset is not public listed.
1st. Revaluation of assets is just revaluation, no cash inflow or out flow. In simple word, how to pay out dividend from revaluation of assets? What kind of Cash flow statement is he looking at?
MIIF play finicail trick to fool you !! they include asset revaluation gain as income, for FY05, net income is $54,687K or 9.92 cents per share. you may not know that out of this $54,687K income, $53,687K is from asset revaluation gain.
If we following the normal account EPS policy for stock like SingTel or REIT like CMT[/B]
There is no financial or accounting trick. Revaluation is legal, not even creative accounting. Lot of companies are doing that to their Fixed Assets(especially property). SingTel may not revaluate their F.A, but CMT are highly likely to revaluate their Assets. So many property companies do that.
the actual net income will be only 54,687-53,687=$0.321K,
or EPS of 0.059 cents. so their cash income only enough to pay the huge expense, there is no actual cash flow to pay dividen.
Looking at the income statement(P & L ) to determine cash flow? If he study accounting before. I wonder how he passed his exam.
so how MIIF pay dividen of 7.9cents per share or 9% yield, most of the dividen is from return of capital or new equity funding. some of the new fund from new investor will used to pay the dividen. they can even pay you 20% or 30% yield, but the stock will drop as well.
Is it true? Check the cash flow statement, the ans is there.