The stock looks cheap but I have major concerns with the two brothers:
- They pay themselves huge bonuses instead of paying dividends to all the shareholders. They milked the IPO investors to finance their operations and I would be surprised if they ever declare a dividend. What does the Remuneration Committee do in this company?
- Why did Vibes Enterprises accept a share buyback @ HKD 0.165 when the stock was trading @ HKD 0.27? Vibes purchased the shares pre-IPO @ HKD 0.12 but it is a poor return for them nonetheless.
- Why didn't Vibes get a seat on the board? They owned 16.5% of the company after the IPO.
- They have just appointed their sister as an executive director (she will probably get a large bonus too!)
Firstly, thank you for your comment. Feedback helps me to continue working and publishing
You are 100% right on everything. In fact, the thesis partly reflects all of these issues, which I personally think are warning signs. Management remuneration is insane, and ownership structure is bizarre as well. Regarding Vibes, what occurs to me is that they come out because of the level of uncertainty and lack of alignment with the Wong brothers. It must be said that Hyfusin is a high-risk investment with a lot of asymmetry: if you win, you win a lot, and if you lose, you lose a lot.
The stock looks cheap but I have major concerns with the two brothers:
- They pay themselves huge bonuses instead of paying dividends to all the shareholders. They milked the IPO investors to finance their operations and I would be surprised if they ever declare a dividend. What does the Remuneration Committee do in this company?
- Why did Vibes Enterprises accept a share buyback @ HKD 0.165 when the stock was trading @ HKD 0.27? Vibes purchased the shares pre-IPO @ HKD 0.12 but it is a poor return for them nonetheless.
- Why didn't Vibes get a seat on the board? They owned 16.5% of the company after the IPO.
- They have just appointed their sister as an executive director (she will probably get a large bonus too!)
Firstly, thank you for your comment. Feedback helps me to continue working and publishing
You are 100% right on everything. In fact, the thesis partly reflects all of these issues, which I personally think are warning signs. Management remuneration is insane, and ownership structure is bizarre as well. Regarding Vibes, what occurs to me is that they come out because of the level of uncertainty and lack of alignment with the Wong brothers. It must be said that Hyfusin is a high-risk investment with a lot of asymmetry: if you win, you win a lot, and if you lose, you lose a lot.
Greetings.
I linked to your piece (but just noticed that I forgot to include the actual link 🤦♂️) in my EM links post for last week as I am not familiar with this stock: Emerging Market Links + The Week Ahead (September 3, 2024) https://emergingmarketskeptic.substack.com/p/emerging-markets-week-september-3-2024
Thank you very much. I hope it was of interest to you.