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What actually MIDAS last few married deals were able to attract many investors followed up bought in and myself included, then now suddenly with this negative news then what to do next...?


Reply to @jeremyowtaip : CFD also cannot buy Midas. Reach their upper limit

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Think a lot of people made some money in the beginning, got greedy and went in again and now got caught. Pity those who didn't get in the first time and got caught in the 2nd round :-)


Does a suspension always definitely lead to bankruptcy?


Reply to @Jackson0124 : Some maybe lucky like Noble still able to trade. If u were to look and many china stocks listed here many years ago; one by one collapsed & many were suspended and eventually bankrupt.

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Delong is another dangerous counter... chiong super fast up or down...


Reply to @lisaneo : sadly no one will listen when the stock is doing well and making them alot of money.

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Another one that bite the dust .
Only left a few quality china stock .
Heng never buy as dislike the management .


Reply to @learnerlim : agreed, company drop from $1 plus until a few cents, no faith in the company.


suspended without any warning.stocks are so high risk


Midas CEO and Raffles Education CEO are helmed by the Chew brothers.


Auditors to be sued, right?. What action our regulatory authority will do. So many stocks suspended. Too bad


really左勾拳右勾拳。release bad news and suspend when the big bear bites


me here laying shit. throw banana if u want. Today KE report

China Star Food
- 3QFY18 net profit slumped 33.7% to Rmb8m, swinging 9MFY18 to a net loss of Rmb4.8m (9MFY17: Rmb51m loss).
- For the quarter, revenue tumbled 20% to Rmb92.3m, as its Zilaohu factory had not been producing at optimal capacity following a resumption of operations in mid Sep '17 after a production halt.
- Accordingly, gross margin collapsed 16.7ppt to 27.3%, and this was exacerbated by lower sale prices due to a change in channel management strategy.
- But, the strategy alleviated some pressure on bottom line, as it passed on substantial marketing and distribution costs (-73%) to external distributors.
- NAV/share at Rmb1.41.


Reply to @GrandpaLemon : doesn't seem so bad

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Is it game over for Midas Holdings?

THE script is all too familiar. A company makes grandiose promises to expand its business. Large sums are spent on new facilities. Unfortunately, the investments don' t seem to lead to better cash flows or profitability. Debt grows.

One fine day, shares are suddenly halted, then suspended. Irregularities have been found. Analysts cease coverage.

Is it game over now for investors in Midas Holdings?

In the worst case scenario of lenders pulling the plug, minority shareholders might not have much. Equity stakes in Midas' subsidiaries and associates are either pledged away or embroiled in lawsuits.

Even if the company remains a going concern, there is uncertainty over the damage caused by potential fraudulent transactions. We now know that there are other corporations in China in which Midas subsidiaries have invested, which apparently have not been disclosed before.

So there is uncertainty over whether company assets can still be saved. The board is getting a China-based independent director (ID) to become the legal representative for all its China companies.

Seals for a number of key subsidiaries were originally held by Midas chief executive officer Patrick Chew and executive chairman Chen Wei Ping. The rights were then transferred to trusted lieutenants Ma Mingzhang and Sun Qixiang in the course of 2017. The stated reason was to reduce the need for the CEO and executive chairman to travel so much.

One can' t say that shareholders haven' t been warned. In 2017, Midas replied to Singapore Exchange (SGX) queries six times. Queries had escalated after a sell-off last November and December caused shares to slump to historic lows.

The Business Times also weighed in during a column published on Dec 4, 2017 (" Diversification, the Midas curse" ). We pointed out, among other things, that a recent acquisition might be at too high a price. We also asked why it was taking so long for the company' s diversification efforts to pay off.

In the new year, it was also clear that, price-wise, something odd was happening to Midas shares traded in Hong Kong.


To recap, Midas shapes aluminium pieces. Its customers include train manufacturers around the world, but especially in China where its key subsidiary is called Jilin Midas Aluminium Industries Co.

Midas also owns a 32.5 per cent stake in one such train maker, CRRC Nanjing Puzhen Rail Transport, otherwise known as NPRT.

In recent years, Midas spent billions of yuan to add new capacity to diversify its revenue sources. There were three initiatives.

First, for its existing train business, new capacity was added in a Luoyang plant as early as 2011. The relevant subsidiary is Luoyang Midas Aluminium Industries Co. It commenced commercial production in Q2 2015.

Second, new investments went into capacity to make aluminium plates and sheets for the car, shipbuilding and aviation industries. Again, investments were made as early as 2011. The relevant subsidiary is Jilin Midas Light Alloy Co.

Commercial production was initially meant to begin in 2015, was pushed back to 2016, and then 2017. Apparently, extensive technical checks had to be done to certify the products for commercial use. Maybe market conditions were weak.

Third, shareholders were significantly diluted as a result of a 2016 deal to acquire the Huicheng Group, a business making aluminium stretched plates for various industries.

Huicheng was an existing business of the executive chairman, who received a chunk of new Midas shares as payment. The relevant company is Dalian Huicheng Aluminium Co.

As Midas diversified, it received funding from a medium-term note programme established in 2013. In November 2016, it borrowed US$60 million. The lenders were its major customers, all linked to Hong Kong and Shanghai-listed CRRC Corporation, the main railway group in China.


With the benefit of hindsight, what triggered the latest sell-off might be the terms of an agreement entered into with the medium-term note lenders on Nov 21, 2017, terms only revealed on Dec 12, 2017.

As part of the deal, Mr Chen, the executive chairman, appeared to have been anxious to reassure the lenders.

For one thing, Midas pledged its equity stakes in Dalian Huicheng and NPRT. These two companies alone contributed more than half of the group' s profit before tax for the nine months to Sept 30, 2017.

In addition, certain Midas subsidiaries had to provide a performance deposit, and also factor receivables. Mr Chen, as guarantor, undertook to pay an extension fee, and even roped in a personal friend to enter into a pledge.

Such nervousness points to a lack of confidence from CRRC in Midas' s balance sheet. That' s not a good sign.

What triggered the recent share suspension was something even more serious. On Feb 8, 2018, an announcement late at night revealed that freezing orders were discovered for shares in Dalian Huicheng, NPRT and Luoyang Midas. Jilin Midas, the main subsidiary, is also being sued to the tune of 30 million yuan (S$6.2 million). Another 12 million yuan for Midas' s China subsidiaries were also frozen by court orders.

One can only speculate on what is happening here. Perhaps Midas was unhappy with the quality of goods from its suppliers, and refused to pay them. Suppliers sued. Such disputes can drag on.

If that were all to the story, and the sums above were all that Midas had at stake, it might yet survive.

But now, with previously undisclosed Midas-linked corporations in the picture, fraud is a concern.

Looking ahead, one big question is whether it will be business as usual at Midas. Will its customers and suppliers still have confidence in the firm?

Midas' s debt and cashflow situation, already not in the best shape in 2017, might be worse than previously thought. Its negotiating power with customers might not be that strong, hence its high receivables.

Stories similar to Midas abound. Most do not end well.

The conclusion to this one has yet to be written, and the trading suspension might yet be a false alarm.

But all said, minority shareholders might want to take a prudent write-down on what has, at best, been a speculative China play.

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Poohbull ( Date: 10-Feb-2018 13:07) Posted:

Please sign and spread this, if you want to see your money again.

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