Wednesday, March 28, 2012

Tibet 5100 purchased

This morning I added a few more shares in Tibet 5100 (HK:1115) to the portfolio. The company recently reported excellent results for the 2011 financial year, has an extremely strong balance sheet with no debt and lots of cash on hand, is diversifying its customer base, expanding its distribution network, has a high profit margin and does not have to spend huge amount of CAPEX to generate future growth. The only negatives were the rather miserly final dividend (HK$0.03) and the large receivable from a single customer.

Following the result the controlling shareholder placed just under 8% of of the issued shares into the market at HK$1.75 and the shares took a tumble (as expected). Since this wasn't dilutive (unlike wealth destroying placements of new shares) and the controlling shareholder still holds 43% of the company's shares, I took this as an opportunity to add to my position.

I paid HK$1.82 for the additional shares.

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