As if the dividend hike is not enough, this evening CMHP announced a round of changes to their management.
Announcement can be found here.
Luo Hui Lai will take over from Mr Jiang Yan Fei as CEO. The COO is stepping down and Mr Jiang will take over the position.
Basically, they are loading CMHP with members from the parents.
If its any indication of what they are trying to do, it is perhaps to push for a price above their NAV to fulfill their master plan:
As part of the Restructuring, in line with the China Merchants Group’s commitment to use the Company as the platform for the China Merchants Group to expand its toll road business and presence in the People’s Republic of China, Huajian has also undertaken to the Company that, in the event that:
- (i) Huajian intends to acquire an interest in, or has access to, any opportunity to acquire an interest of any kind in the business of holding concession(s) for, or for developing, building, owning or operating, toll roads (a “Business Opportunity”);
- (ii) Huajian intends to dispose of an interest of any kind in the business of holding concession(s) for, or for developing, building, owning or operating, toll roads (a “Business Disposal”),
then the Company shall have a right of first refusal to participate in such Business Opportunity or Business Disposal.
The snakes are finally waking up and showing their true colors.
Story so far
- Investing in the economic moat of toll roads: CMHP
- CMHP: Dividend Yield on Track
- Purchase of Beilun
- Purchase of Jiu Rui
- Q1 2013 report and some AGM updates and analysis
- The dividend growth thesis
- Relocation and Removal of toll gates
- Full year results and dividend hike
Kum Chun Wai
Wednesday 5th of March 2014
Thanks for your insightful (and usually very, very thorough) analysis on CMP. I have been following your posts on them for quite a while and I have some questions regarding the latest restructuring.
1) Previously you mentioned that they have intention to push up the price to SGD1.10-1.20, which is closer to NAV for a potential placement. Is it legal for them to do so?
2) Do you think that the shakeup in management will have any adverse effect on the future performance of CMP? Obviously we have to make guesses now as only time will tell, but what are your views?
3) From your latest post you mentioned that "the snakes are finally waking up and showing their true colors", which sounds like there may be some hidden agenda. Care to enlighten me a little more on that?
Thank you for taking your time to read my comments and I will be extremely grateful if you decide to educate me a little.
Thank you once again!
Wednesday 5th of March 2014
1) They are not doing illegal isn't it, formalizing a payout ratio, jacking up payment, announcing their potential to drive up demand 2) It can be good or bad. They say you shouldn't trust the chinese, and when you see them make moves like that, what are they trying to do here. They have 84% interest in this with 135 mil RCPs that they cannot convert. Now they are trying to make their moves 3) They obviously have an idea what they are going to do. Jackup by dumping assets in, causing interest from managers then perhaps paring down their stakes, or listing in Hong Kong. We have no idea what are their moves yet but businessmen always have an idea it just whether they pleasantly or disgustingly surprise us.