[ET Net News Agency, 21 November 2019] Short-seller Blue Orca Capital (BOC) published a
research report accusing the Chairman's family looted Kasen International Holdings (00496)
by understating the revenues and profits of the disposed businesses.
Recently, Kasen's stock price has risen on its announcements of development projects in
Cambodia, and a positive profit due to the sale of residential properties in China.
But BOC said neither will provide much value for investors going forward. Investigators
sent to Toulkey Village in Cambodia could find no evidence of the proposed development.
It said Kasen's only viable segment today is property development, a melting ice cube as
the company sells off the last of its remaining residential units. Given that its other
segments generated losses, at best Kasen should be valued on a price-to-book ratio of
other similarly situated Hong Kong property developers (0.5x).
After adjusting Kasen's net asset value to account for projects or assets BOC thinks do
not exist, the short-seller values Kasen at HK$0.67 per share, an 85% downside from its
last traded price.
At 11:11 a.m. Kasen traded down 15.5% to HK$3.87, with HK$19.22 million shares changing
hands. (KL)