Herald Holdings purchased

Last week I purchased some shares in Herald Holdings (114) for the private portfolio. Herald Holdings is a small company (market cap below HK$600MM) which, among other things, manufactures toys in the PRC. While their profits fell substantially last year, a significant part of the loss was due to losses on investments (i.e. they were speculating with shareholders' money in the share market) which is not something I would like to see management doing with my money but those losses have depressed the share price to the point where it looks very cheap. Even with the reduced profit the company is still on a single digit PE ratio and the combined interim (3cps) and final (5cps) dividend gives a yield above 10% pa. The company has very little debt and a considerable amount of net cash giving a significant margin for safety.