Kenmark's Printing Business Resumes And Shares Soars!

Kenmark the company said:

• Kenmark wishes to inform that the printing division has resumed its operation and would start to deliver the uncompleted orders. The other business divisions located at Port Klang namely wood division, plastic and mould division have completed all outstanding orders and the Company is now pursuing new work orders from the existing and potential new customers.

So their printing division has resumed its operation and would start to deliver the uncompleted orders.

This must be such a positive news as the share is now soaring by some 53.8%!!!

Yeah, Kenmark is now trading at 10 sen.

LOL!

I mean, it's printing division is now only doing its uncompleted orders. What's next? Given what has happened, with the disruption in its printing, would Kenmark being able to secure new orders?

And how big is the Kenmark's printing business? Yeah what potential does it have?

On July 8th 2010, Update Of Kenmark's Status Of Business

From Kenmark's own words:

• b. Printing Division - Most of the important parts from the machinery have been located and is awaiting installation. We have successfully negotiated with the machine repairers to commence repairs and subsequently conduct a test run of the machinery. The Company has a limited stock of raw materials for production and will need to purchase new raw materials to meet future orders. Some of our local suppliers had indicated their willingness to continue supplying the Company with raw materials subject to payments made to overdue accounts. As some raw materials are imported from Thailand, Taiwan and Europe, the Company would need to raise funds and/or secure trade financing to secure these raw materials for future orders. The average sales for the Printing Division is RM800,000 per month and in light of the recent developments, most of our customers have switched their orders to other manufacturers. The Management of the Company is now attempting to persuade these customers to place orders with the Company and we expect 20% of the orders to return. On the manpower front, 67 of the 125 employees previously employed had returned to work with the Company.

Two key points:

1. Average sales for its Printing Division is only rm 800,000 per month!
2. Most of our customers have switched their orders to other manufacturers!

And the stock is soaring like crazy!

LOL!

Life is good!

Another white knight coming?

Hmmm...

• KENMARK INDUSTRIAL CO. (M) BERHAD ("Kenmark" or "the Company") SUMMONS AND STATEMENT OF CLAIMS FROM SINGA TRADING (M) SDN BHD
• KENMARK INDUSTRIAL CO. (M) BERHAD ("Kenmark" or "the Company") - Winding-up petition
• KENMARK INDUSTRIAL CO. (M) BERHAD ("Kenmark" or "the Company") - PN1 Announcement – Default in Banking Facilities from RHB Bank Berhad
• KENMARK INDUSTRIAL CO. (M) BERHAD ("Kenmark" or "the Company") - Winding-up petition

Read more...

Another Incredible Statement From Kenmark Once Again

On 10th July 2010: Star Business carried the following article: Kenmark MD Hwang makes news in UK

Now the Star article was based on the Evning Telegraph: Kenmark will not close down – chairman

• Now chairman and managing director James Hwang has said that the firm is not in trouble, and has confirmed that two winding up orders mentioned in previous Evening Telegraph articles referred only to a dormant company, and not to Kenmark in Corby.
  
  Mr Hwang said: "I have never closed the operation in the UK and I have no intention to close the operation in the UK.
  
  "The company is not subject to a winding-up order and no creditor has filed such an order. The company will continue production of televisions at Corby.
  
  "We have a company called Kenmark International (UK) Limited which was a dormant company and it is currently being wound up, not Kenmark Interntional Limited. This may have caused some confusion."
  
  Mr Hwang said he also hopes that the firm can eventually expand its operations in the town.

Today, on Bursa website, Kenmark posted the following announcement: KENMARK INDUSTRIAL CO (M) BHD (“Kenmark”) - STAR Article dated 10 July 2010 entitled “Kenmark MD Hwang makes news in UK”

• With reference to the above article, the Directors wish to clarify that the company and operations in United Kingdom as mentioned in the news article is not related to Kenmark and there are no business dealings with it.
  
  The above statement is made on the collective approval of the Malaysian Directors of the Kenmark only, namely Dato’ Abd Gani bin Yusof, Mr Ho Soo Woon, En Ahmed Azhar bin Abdullah and Mr Woon Wai En.
  
  This announcement is dated 13 July 2010.

I am baffled. So here is a really, really, stupid question (do you reckon I should ask the Sotong?): "Where is James Hwang?"

Yeah, see how James Hwang can talk freely to the Evening Telegraph in regards to Kenmark International Limited operations in the UK... but ... but... how about him showing up back here.. and answer a question or two?

Read more...

Update Of Kenmark's Status Of Business

I was just reading Kenmark's announcement on Bursa website.

---------------------------

Kenmark wishes to update the status of the following business divisions :-

a. Trading Division (Trading in LCD TVs and other furniture) - No trading is done at this moment as the Company is not able to contact the end customers directly. Management will continue to try to make contact with the end customers.

Moolah: Not able to contact the end customers directly! OMIGOSH! WTF!

How come? How can this be happening??!!!

b. Printing Division - Most of the important parts from the machinery have been located and is awaiting installation. We have successfully negotiated with the machine repairers to commence repairs and subsequently conduct a test run of the machinery. The Company has a limited stock of raw materials for production and will need to purchase new raw materials to meet future orders. Some of our local suppliers had indicated their willingness to continue supplying the Company with raw materials subject to payments made to overdue accounts. As some raw materials are imported from Thailand, Taiwan and Europe, the Company would need to raise funds and/or secure trade financing to secure these raw materials for future orders. The average sales for the Printing Division is RM800,000 per month and in light of the recent developments, most of our customers have switched their orders to other manufacturers. The Management of the Company is now attempting to persuade these customers to place orders with the Company and we expect 20% of the orders to return. On the manpower front, 67 of the 125 employees previously employed had returned to work with the Company.

Moolah: I am confused. What exactly does it mean by "Most of the important parts from the machinery have been located and is awaiting installation". Were they missing? How did they go missing? What happened?

c. Plastic Moulding Division -The principal activity of the mould division is to inject plastic parts for the manufacture of wooden furniture, as well as plastic components to buyers outside of the Group. In-house sales (sales within the Group) took up 85% of the total production capacity of the division, while the remaining 15% is for sales to outside buyers. In the absence of fresh orders for the wood division, the production activity is expected to reduce by at least 85%. As for the remaining 15% to the outside buyers, Management is anticipating to lose a further 10% as customers are losing confidence in the Company's ability to supply further. As for the division's workforce, there are currently 26 employees and this will be sufficient to start production again. Some of the raw material stock was found to be missing and is in the process of being replaced.

d. Vietnam operation - All machineries in Vietnam are intact but operations cannot re-commence as the Taiwanese key management staff have not returned to Vietnam. Management have been trying to contact Mr Chang Chin-Chuan on his handphone but to no avail. The raw materials in Vietnam premises are prohibited by the bank's security to be taken out from the country without authorization from the Taiwanese key management staff. The workers in Vietnam have been released with no liability incurred.

Moolah: Huh? Who exactly are these Taiwanese key management staff? Why aren't they returning to work???? WTF?!!!

The Board of Directors is exploring options to increase the utilization of the capacity of all its operations.

The above reply is made on the collective approval of the Malaysian Directors of the Kenmark only, namely Dato’ Abd Gani bin Yusof, Mr Ho Soo Woon, En Ahmed Azhar bin Abdullah and Mr Woon Wai En.

Source: Kenmark Industrial Co (M) Berhad (“the Company or Kenmark”) - Update on status of business divisions

------------------------------

This is simply disgusting. It's so disappointing to read what is happening to this company.

Oh yeah.... and where is the MD???

And consider the following:

--------------------

Based on the Record of Depositories dated 30 June 2010, the shareholding of Mr Hwang Ding Kuo @ James Hwang is 6,263,792 Kenmark shares or approximately 3.51% which is the same amount as at 18 June 2010.

Ms Chen Wen-Ling's shareholdings in Kenmark based on the Record of Depositories dated 30 June 2010 is 13,832,400 Kenmark shares or approximately 7.76% which is the same amount as last disclosed on 22 June 2010.

Kenmark also wish to inform that there is no new substantial shareholder in Kenmark based on the Record of Depositories dated 30 June 2010.

This announcement is dated 8 July 2010

--------------------------

So James Hwang shareholding in Kenmark is now only owns 3.51%. ( Mr James Hwang on 23 April 2010 notified that he has 53,363,092 Kenmark shares (29.93%).)

And Ms Chen Wen-Ling shareholding in Kenmark is now only 7.76%. ( Ms Chen Wen-Ling on 23 April 2010 notified that she has 29,443,900 Kenmark shares (16.51%). )

How?

Read more...

SC Gets Injunction Against Ishak

The drama continues...

• SC gets injunction against Ishak
  Written by Surin Murugiah
  Wednesday, 16 June 2010 16:54
  
  KUALA LUMPUR: The Securities Commission Malaysia (SC) has obtained an ex-parte injunction to refrain Datuk Ishak Ismail from dealing with RM10.2 million, proceeds from his disposal of about 58.7 million shares of Kenmark Industrial Co (M) Bhd.
  
  In a statement Wednesday, June 16, the SC said the Kuala Lumpur High Court also ordered Ishak to furnish full and complete details of his assets, whether in Malaysia or elsewhere, within four days.
  
  The SC said it sought the injunction following its investigations into suspected breaches of securities laws by Ishak.
  
  Investigations in the meantime are actively being pursued on possible breaches of securities laws within Kenmark, especially with respect to its previous board, management and key shareholders, it said.

Recent postings on Kenmark

1. So What has Ishak Done With His Block Of Kenmarks Shares Purchased
2. Did Kenmark Case Proved That Buy And Hold Investing Strategy Does Not Work?
3. Can Kenmark Survive?
4. Kenmark Finally Discloses In Detail Why It Suffered 146 Million In Losses But...
5. Theory On Kenmark's Soaring Trade Receivables And Massive Provision Of Bad Debts
6. A Deeper Look At Kenmark Losses
7. Kenmark Suffers 146 Million In Losses!
8. Kenmark: It's Now Kidnap Case!
9. More Incredible News Flow From Kenmark!
10. Kenmark: Sorry But I Was Sick
11. More On Kenmark
12. Kenmark: MD and Deputy GM 'resigns', Share Plummets Big Time!!!
    
    

Read more...

So What has Ishak Done With His Block Of Kenmarks Shares Purchased

Ok, there's no rule that one cannot buy and sell shares but do think about the following announcement just posted on Bursa website..

• The Board of Directors of Kenmark was today received verbal confirmation from Dato' Ishak bin Ismail that he has ceased to be substantial shareholder of Kenmark on 9 June 2010. He has indirect interest via Unioncity Enterprises Ltd, a substantial shareholder of the Company, which has today notified the Company vide the Form 29C dated 10 June 2010 that they have disposed of 27,691,900 Kenmark shares in the open market on 9 June 2010.
  
  A representative of BHLB Trustee Berhad for a discretionary trust for the family of Dato' Ishak bin Ismail ("the Trust") has today verbally confirmed to the Company that the Trust has on 10 June 2010 acquired 1,000,000 Kenmark shares and on 11 June 2010 disposed of a total of 31,000,000 Kenmark shares.

Here's the data that matters.

4 June 2010, I wrote More Incredible News Flow From Kenmark!

And last but not least... in the Star article Ishak is Kenmark’s biggest stakeholder

• “James (the MD) called me on Monday night to help him out as he is sick. This is the company we both floated in 1997 when I was the bumiputra shareholder. However, I sold my shares a long time ago,’’ he told StarBiz

Monday night?

In the posting Kenmark: Sorry But I Was Sick

• "James Hwang in his letter has stated that he has been unwell and unconscious and was also uncontactable. He has now regained full consciousness but still physically weak," said the company in a statement to Bursa Malaysia on Wednesday, June 2.
• "It was only yesterday (Tuesday) I regained full consciousness but am still weak to travel," he said. He did not identify the nature of the sickness nor did he say when he expects to be well.Hwang will only return to Malaysia once he is healthy.Hwang also said he could not be reached by telephone as all calls had been barred by family members.

Sorry I am confused.

Ishak got the call on Monday night. If James Hwang was in China, say Beijing, the time zone would be the same as here, yes? So can I assume Monday night as in Monday night Malaysia time?

And James Hwang states he only regained consciousness on Tuesday.

Hmmm..... how?

And Ishak bought 20 million shares on Monday. See Link here

How now Brown Cow?

-------------------------------------

YES HOW DID ISHAK BOUGHT THE SHARES ON MONDAY??

NOW he said he sold on the 9th??????

Such a significant announcement and Kenmark only announced today??????

WOW!!!!!

Bought on 1st and 2nd ... sold on the 9th!

Go figure!!! Go do the math!!!!!!!!!

Guess how much profit was made by this friendster who lend his helping hand!!!

Yeah... Robin Hood or what?????

BAH!

Read more...

Did Kenmark Case Proved That Buy And Hold Investing Strategy Does Not Work?

I was listening to some coffee table chat on Kenmark. And naturally since Kenmark shares had collapsed from 90 sen, one aunty was quick to blast the investing strategy. Because of the collapse of the share and the incredible losses announced by the company, she was quick to stress that buy and hold does not work in Malaysia, not when companies like Kenmark are listed.

Is this really the case?

I have compiled a set of data. Now do verify the data because I made the compilation myself and obviously, I could screw up with the data. Hey, I am not perfect. Not at all.

Now assuming one had 'invested' in Kenmark after Kenmark's fiscal 2005 numbers. Now Kenmark reported 2005 Q4 earnings can be found here: Quarterly rpt on consolidated results for the financial period ended 31/12/2005. That earnings was made in Feb 2006.

The next year, Kenmark changed its fiscal year. Hence 2007*** represented a 15 month fiscal year. Yeah kind of complicated.

That earnings was reported on May 2007. Consolidated results for the financial period ended 31/3/2007

If you click on that earnings link above, Kenmark lost 6.618 million for the quarter.

Which means, Kenmark's net profit for 15 months is only a mere 4.545 million or a razor thin 1.25% only. Cash balances only 18 million and loans over 137 million.

The massive drop in profitability was a big, big warning yes?

Now if one had purchased Kenmark, should one continue to HOLD the stock given such a circumstances?

Does one want to hold and hope that the business could recover? What was Kenmark's core business?



And amazingly, the stock was very kind. Look at the chart above. If one purchased the stock as suggested in Feb 2006, at around maybe 1.08 or so, one could have easily exited the stock with minimal losses.

Now one assume ignored this warning and continued holding to the stock.

The next fiscal year 2008, earnings did improve.

Perhaps HOLDING looked like a smart move.

Come May 2009, all the warning signs flashed like mad. ( see the compiled table)

Earnings dropped back to 4 million. Net margins slumped to 1.6%. Cash slumped to an incredible low 0f 2.222 million. Loans were 144 million and receivables were over 160 million!

Given such razor thins profit margins, were there any logical reasoning that Kenmark was running receivables over 160 million???

Seriously that is sounding like an extremely poor company with very weak fundamentals, yes?

That warning was on May 2009!

And again the stock was very nice to investors seeking to exit for it held strong.


The above chart showed Kenmark's trading range between June to Dec 2009.

Still HOLD on to the stock despite the clear deterioration in the company's fundamentals?

(the following notes taken from what I had posted in the posting A Deeper Look At Kenmark Losses )

Aug 2009: Quarterly rpt on consolidated results for the financial period ended 30/6/2009
2009 Q1
Sales 57.686 million Net Profit 1.013 million Receivables 207.584 Million Cash 2.202 million Total borrowings 144.463 million.

Any improvement? Or did the spike in receivables raised the warning signal up another notch?

Is this not yet another reason to leave the stock?

Nov 2009: Quarterly rpt on consolidated results for the financial period ended 30/9/2009
2009 Q2
Sales 35.334 million Net Profit 3.718 million Receivables 225.317 Million Cash 2.298 million Total borrowings 143.354 million.

By Nov 2009, earnings did improve but receivables have now gone up another notch. It's pure insanity now that receivables are now at 225.317 million. And despite the improve in profits, Kenmark's cash level is still extremely low at 2.298 million!

Seriously... does it make any sense to hold the stock?

Isn't it so clear that Kenmark did not even look like an investment grade stock at all?

And isn't it so clear that EVEN if one had make an investment mistake by purchasing Kenmark stocks, one could easily exited the stock with minimal losses if one had acknowledged the fact that perhaps they had err-ed by investing in Kenmark.

Now Kenmark has collapsed... totally.

Should one fault the investing strategy 'Buy and Hold'?

No I would not.

Kenmark business fundamentals had been poor for so long already. There was no reason to buy the stock, let alone hold the stock!

Sorry but this is my flawed conclusion.

Read more...

Can Kenmark Survive?

Kenmark shares were slaughtered yesterday. It plunged some 46%! It went from 27 sen to a mere 14 sen!



And surprisingly Bursa CEO calls Kenmark MD’s behaviour irresponsible

Now the biggest questions for me are the following...

1. Would we see more losses from the company?
2. Can the company survive?
3. Would we see more disposal of shares by the major shareholders?
4. What about Ishak - the so-called friendster?

These are massive questions, yes?

Yes, I know it's getting tedious and perhaps boring but besides these issues, there's something not right.

Yes! Something happened and it's not right!!!

Posted yesterday: Kenmark Finally Discloses In Detail Why It Suffered 146 Million In Losses But...

In that posting, I included data from a worksheet which Kenmark submitted in its announcement to Bursa.

This morning I clicked on my 'source' of data, Debtor Aging.xls and I found it to be an invalid address. Then I realised Kenmark has removed that worksheet and replaced it with another new one.

They said the following...

• Further to the Company’s announcement on 8 June 2010 in respect of the reply to Bursa Securities on the quarterly results for the financial period ended 31 March 2010, the Board wishes to inform that the “Debtors Aging” attachment file was inadvertently forwarded with the announcement. The attachment file is errorneous as it only contains the debtors aging for affected companies where provisions for doubtful debt were made. Attached is the corrected file indicating the summary of the total debtors and the aging analysis of the Kenmark Group.

Well let me say this. I do not think it was erroneous. Instead, I am glad I saw and took the snapshot of the file. And most importantly, that 'debtors aging' showed one important data, which is the debt that was written off came from 3 main debtors, which are BILLION CREATOR (HK) LTD, DAILY EMPIRE TRADING LIMITED and EVER VICTORY (HK) LTD.

Why did Kenmark want to remove the file?

Did these 3 companies who saw their debts being written off by Kenmark stood out sorely????? ( refer Kenmark Finally Discloses In Detail Why It Suffered 146 Million In Losses But...)

Take Billion Creator. It owed Billion Dynamic Sdn Bhd 44.565 million. Billion Dynamic wrote the whole sum off. Billion Creator owed Kenmark Industrial 7.1 million. Kenmark Industrial wrote off 4.23 million off to just 2.875 million and Billion Creator still owes Kenmark (Labuan) close to 3 million.

I cannot help thinking. If I am Billion Creator, and I see Kenmark writing off close to 49 million off from what I owe them, what should I do about the remaining 5.8 million owed to Kenmark group of companies?

How?

My say?

The fact that bulk of the write down came from 3 companies and given what has transpired, Kenmark should NOT have removed the file. This is a rather important disclosure of information to the investing public!

Anyway.. back to the main issue.

1. Would we see more losses from the company?

The general impairment of fixed assets was scary. Given the limited data, there's no way I can ass-u-me that there will be NO MORE impairment of fixed assets.

Remember, Kenmark only did a 10% general impairment of fixed asset left idle due to the current interruption of its business.

And the more I thought about it, the more I am baffled.

Kenmark's reported earnings submitted was for the period ending 31/03/2010 and the current mess only happened on the last week of May 2010.

First thing that came to my mind, how could Kenmark provided for such general impairment of fixed asset since the current interruption of business only happened end May 2010? It was like Kenmark was providing for losses for events that had not happened.

Then I came to my senses. :P

Sales revenue... sales revenue... check out the sales revenue.

On Feb 2010's reporting quarter, Kenmark said it had 101 million in sales. Ok that sales figure is so questionable now, given what is happening, because the previous reporting quarter in Nov 2009, Kenmark sales revenue was only some 35 million. So on a q-q-q basis, sales went from 35 million to 101 million to just 18 million (current quarter, Kenmark sales was only some 18 million).

Leaving out issue of 'fudged' numbers, from 101 million to 18 million, is indeed a serious interruption of business.

Which meant that Kenmark's troubles was known months ago!

That would be my assumption. Yes I ass-u-me and if I am wrong, I am making an ass out of you and me.

Now if that's the case, then most likely than not, it is possible to see more general impairment of fixed asset left idle! That would be guess! And I again I stress, I am guessing and I could be wrong.

How much impairment would we see? Well current quarter of general impairment of 10% already equated some 29 million! So go figure. My guess is that the figures would be huge the next quarter!

Provision of bad debts.

Let's have a look at the resubmitted Debtor Aging summary1.xls (yeah, it's a summary!)

Now the file is too wide, so I again hid some columns and showed debtor aging from 150 days onwards.

And I added myself a total of the debts over 150 days and more. See the arrow highlights in the table below.

Why am I doing this? (click on the table above for a larger view)

Come next quarter, these figures would be 180 days and above already and by any industry standard, such debts are pretty much doubtful.

And what do we have? After the provision of bad debts, Kenmark's receivables over 150 days is more than 51 million.

How much of these would be bad?

Did another calculation. The receivables over 210 days is about 9.878 million. This would the figure I would ass-u-me could be written off come the next quarter! Yes, meaning to say, it's possible to see provision of bad debts of at least 9.8 million come the next quarter!

That's my flawed guess. Ok?

Next... Can the company survive?

Let's see the bare facts.

Cash on hand as reported for the period ending 31/3/2010 was stated as 440 thousand!

Total loans outstanding is 139.043 million!!!!!

And trade payables is a massive 83.958 million!!!!

Can Kenmark even pay its bills???

Perhaps sale of assets is imminent!

But how much are the assets really worth?????

Kenmark's impairment of its machinery from its current quarter is a whopping 15 million!!!!!

What's the exact book value of these machinery?

How?

I do not even know how to ass-u-me its assets value.

3. Would we see more disposal of shares by the major shareholders?

Last night Kenmark siad its Taiwanese shareholder, Chen Wen-Ling also reduced its stake. LOL! The other day, was James Hwang.

Which makes it all so disgusting.

Really.

Think about it.

Given the state of the horrible mess Kenmark is in, the major shareholders and the boss, had been disposing their shares like plague!

Would they continue to dispose their shares?

Think about it.

Lastly, What about Ishak - the so-called friendster?

Hey, he was the friendster who lend the helping hand hor. And he bought his stake on 1st and 2nd June. That was when Kenmark was below 10 sen.

So how? Is this friendster really a 'Robin Hood' or is the friendster in for pure profits only?

Go think about it....

Read more...

Kenmark Finally Discloses In Detail Why It Suffered 146 Million In Losses But...

So what do we have? Kenmark submitted its quarterly earnings, which was clearly an insult to the investing public in the manner they presented the report in which they showed utter no respect to the investing public by NOT disclosing how much was provided in their provision for doubtful debts! Thank goodness the folks at Market Surveillance, Securities Commission realised that this is not right as it was not only misleading AND there was no effort from Kenmark to show how it had suffered so much losses. Hence the stock was suspended yesterday. Now Kenmark did made a reply and because it did the stock will resume trading today.

However, for those who took a look at what was reported must have been shocked at what was submitted to Bursa.

Comments:

1. Fixed asset - general impairment = 29.383 million.
2. Fixed asset – full impairment as idle asset = 22.439 million.

WOW!

So we have fixed asset general and full impairment causing losses of over 51 million!

Now I am not an accountant or auditor but if I have vested interested in Kenmark, I would definitely would want to see WHY such a huge provision is needed on its fixed asset.

Then we have provision of doubtful debts.

General provision at 100% (exceed 12mths) = 69.206 million!!!

Size of the provision is mind boggling!

Now if you look at point #2

Fixed asset – full impairment as idle asset = 22.439 million.

This is explained by the following..

Yes, from the above, we can see that provision for 'idle assets' consisting of machinery totals a whopping 15 million!

Key word, idle.

And of course, the inquiry mind wants to know the original book value of the machinery and needless to say why the machinery are left idle!

Common business sense, why did Kenmark buy such valuable machinery but only to be left idle!

Regarding point #1.

1. Fixed asset - general impairment = 29.383 million

Assets not fully utilised due to current interruption of business amounts to a whopping 29.3 million.

What's interesting is its assets in Vietnam. The impairment losses totals some 23.2 million and this is only a 10% impairment. Yeah.. go figure the size of its plants in Vietnam. And given the size of the plant, how come Kenmark business the previous years, never show any potential at all? Don't you wonder? I certainly do.

Source: Appendix A.doc

Next we have the doubtful debts issue - the 69.2 million issue!

Now the provision of bad debts comes from 3 companies.

1. Kenmark Industrial Co. (M) Bhd
2. Billion Dynamic Sdn Bhd
3. Kenmark (Labuan) Limited

Kenmark Industrial.

Firstly the screen shot belows shows that it is such a joke how Kenmark conduct its business! Its business aging has columns for over 330 days!!!

Now because the aging has so many columns, I will show only from 180 days onwards..

(the above table is clicakable for a larger view)

Comments.

The above table shows the before and after bad debts provision.

From the formula embedded, Kenmark's amount is only considered due after 180 days. In layman's term, this mean, you can buy a product from Kenmark, the product is only due for payment after 180 days! ( ps. if one is interested in looking at Kenmark from a business investing perspective, one could dig out recent quarterly earnings and look at Kenmark's recent OPERATING PROFIT MARGINS and evaluate if there was any justification for Kenmark to run business in such a manner, ie allow its customers to pay only after 180 days. Why? If the margin is small (ie 10% or less) then common sense would dictate that it's simply suicidal to conduct business in such a manner!)

From the worksheet, it appears that some 25.182 million was written off as bad debts from Kenmark Industrial Co. (M) Sdn Bhd. (you can get this figure by subtracting 20.379 million from 45.562 million.)

Note the 3 'big' companies benefiting from the provision of bad debts: BILLION CREATOR (HK) LTD and DAILY EMPIRE TRADING LIMITED and EVER VICTORY (HK) LTD.

Now if I suspect something is amiss or if I suspect any hanky panky, I would dig up more info in these 3 companies. Yeah, check if there is 'freindly' relationship between these 2 companies and Kenmark.

Oh yeah, the amount due which is over 330 days totals 24.641 million!!!

Next we have Billion Dynamic Sdn Bhd.

Hmmm... Billion Dynamic Sdn Bhd and Billion Creator (HK) Ltd ..... hmmmm.... first name... same!

!!!

Very straight forward!! (the above table is clickable for a larger view)

Billion Creator (HK) Ltd owes Billion Dynamic Sdn Bhd 44.565 million. This amount is over 330 days.

Wiped clean!!

!!!!

No more debts owing from Billion Creator to Billion Dynamic!!!

Simply. Easy peasy!

Lastly, we have Kenmark (Labuan) Limited.

(the above table is clickable for a larger view)

Not much provision was made but note the 3 companies again. BILLION CREATOR (HK) LTD and DAILY EMPIRE TRADING LIMITED and EVER VICTORY (HK) LTD.

The bulk of Kenmark's debts comes from these 3 companies.

And it seems that Billion Creator (HK) is the luckiest company in this saga. Owed Kenmark and subsidiaries so mcuh money, now most wiped clean. No need to pay!

Good or what?

Source: Debtor Aging.xls

So how?

Do you like what you see?

One big question for me...

ok, one can just slam Kenmark for being a bad business for allowing its customers (or 3 companies - Billion Creator, Daily Empire Trading and Ever Victory) to run up such massive debts on a relatively insane credit terms of over 180 days but what I want to know is why now?

Yes, why now.

Take their quarterly announcement reported last year. (I will paste what I had posted previously)

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009
2008 Q4
Sales 38.775 million Net LOSS 0.084 million Receivables 163.773 Million Cash 2.222 million Total borrowings 144.574 million.

Yes, receivables last year was already an insane 163.773 million.

Now what I want to know is, from this 163.773 million, how many of the debts were over 180 days? Were there any debts over 330 days back then?

Sorry but surely the inquisitive mind would want to know, yes?

And how long ago has Brilliant Creator being a customer of Kenmark?

These are the simple questions that needs to be answered.

And yes, the ownership in these 3 companies. Are they 'friendly' to Kenmark boss? How close is the friendship?

Last but not least...

We all know Kenmark boss was said to be sick or unconsicous or maybe kidnapped. (Sorry, I simply do not know what to believe, hor)....

From Bursa website: http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/LsvAllByID/20BC43B4778D69064825773C003C329F?OpenDocument

• Further to our announcement dated 3 June 2010, the Directors wish to inform that based on the Record of Depositors dated 7 June 2010, the shareholding of Mr Hwang Ding Kuo @ James Hwang is 14,193,792 Kenmark shares or approximately 7.96%.Mr James Hwang on 23 April 2010 notified that he has 53,363,092 Kenmark shares (29.93%).This announcement is dated 8 June 2010.

Yeah, finally when queried, Kenmark finally disclosed the above information!

I wonder if no query, when would Kenmark disclose?

From owning 29.93% on 23 April 2010, James Hwang shareholding suddenly shrank to a mere 7.9%

Go figure!

Yes, the boss has been dumping his shares like mad!!!!

What's MOST UTTERLY DISGUSTIBATING is....

1. No disclosure on when his shares were sold.

2. No disclosure on the price transacted.

Surely this is not acceptable!!!!!!

( see also: Theory On Kenmark's Soaring Trade Receivables And Massive Provision Of Bad Debts )

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Theory On Kenmark's Soaring Trade Receivables And Massive Provision Of Bad Debts

Got an extremely good reply from Richard Cranium on the posting A Deeper Look At Kenmark Losses

• How about this for a theory?
  
  1. They "moved" all the stocks to a friendly or a shell company, accounting for a significant rise in receivables.
  
  2. The sales figures subsequently dropped as there is no more inventory due to (1).
  
  It would be interesting to see where the stock went to i.e. which distributors/retailers has the largest intake. Won't surprise me if these are in China or place far away from Malaysian law.
  
  Just a hunch,

That's a pretty interesting theory or hunch. :D

Let me reuse the same frame as what I had posted earlier and put the focus on Sales, Inventory and TRADE PAYABLES.


I put in trade payables because sometimes sales do not come directly from a company's inventory. Meaning to say, sometimes a company could buy a product from another source and then re-sell that product.

The recent earnings again...

Feb 2010: Quarterly rpt on consolidated results for the financial period ended 31/12/2009
2009 Q3
Sales 101.441 million Net Profit 4.769 million Inventory 22.847 million Trade Payables 106.347 million.

Nov 2009: Quarterly rpt on consolidated results for the financial period ended 30/9/2009
2009 Q2
Sales 35.334 million Net Profit 3.718 million Inventory 28.241 million Trade Payabales 103.577 million.

Aug 2009: Quarterly rpt on consolidated results for the financial period ended 30/6/2009
2009 Q1
Sales 57.686 million Net Profit 1.013 million Inventory 38.687 million. Trade Payables 63.958 million!

(Moolah: OMIGOOOOOOSH! Jackpot!



Compare the inventory in this quarter versus what was reported on Nov 2009! See how inventory declined from 38.687 million to 28.241 million the next quarter. See how Trade payables soared from 63.958 million to 103.557 million!

How could the payables jumped so high? Sales this quarter was only 57.686 million and the next quarter sales plunged to 35.334 million???!!!! And payables increased by 39.599 million!

Questionable issue or what??? )

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009
2008 Q4
Sales 38.775 million Net LOSS 0.084 million Inventory 30.853 million Trade payables 34.310 million!

(Moolah: WOW!

Trade payables in Q4 was only 34.310 million. The next quarter it was 63.958 million. And the next quarter it was 103.557 million. And the next quarter 106.347 million!!!!!!!!!!!!

Holy cow!!!)


And the following was from last night:

Last night, June 2010:
2009 Q4
Sales 18.762 million Net LOSS: 146.552 million Inventory 20.104 million Trade payables 83.958 million!!!!

WOW!

Exactly!

When one views the inventory and trade payables together, it paints one new ugly picture altogether!!!!

How now brown cow?????

Tell me if this is not sheer financial shenanigans!

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A Deeper Look At Kenmark Losses

Last night I wrote Kenmark Suffers 146 Million In Losses!. It was rather lacking, so I decided to make a better posting on it.

Firstly let me dig up some recent earnings...

Feb 2010: Quarterly rpt on consolidated results for the financial period ended 31/12/2009
2009 Q3
Sales 101.441 million Net Profit 4.769 million Receivables 248.662 Million Cash 2.210 million Total borrowings 142.203 million.

(Moolah: Comparisons are made versus the previous quarter. Sales. Sales for the quarter was incredible. Over 101.441 million. Last quarter 35.334 million only. What happened? Why the sudden surge?)

Nov 2009: Quarterly rpt on consolidated results for the financial period ended 30/9/2009
2009 Q2
Sales 35.334 million Net Profit 3.718 million Receivables 225.317 Million Cash 2.298 million Total borrowings 143.354 million.

Aug 2009: Quarterly rpt on consolidated results for the financial period ended 30/6/2009
2009 Q1
Sales 57.686 million Net Profit 1.013 million Receivables 207.584 Million Cash 2.202 million Total borrowings 144.463 million.

(Moolah: Comparisons are made versus the previous quarter.Look at how the receivables 'suddenly jumped' to 207.584 million. Last quarter, receivables were 'only' 163.773 million. And the fact the next quarter the receivables jumped again to 225.317 million! What on earth is happening??? Compare the receivables to the sales revenue! Unreal isn't it? 2009 Q1 Kenmark had sales revenue of 57.686 million, yet it carried receivables of 207.584 million!!!! Insanity! How on earth can any company run a business in such a fashion? A cash balance of only 2.2 million and total debts of 144.463 million? Was there any way possible such a business could survive???? And from an investor perspective (and mentioned before in the posting, More Incredible News Flow From Kenmark! , quote: "Perhaps it was grossly over priced at 90 sen given the state of its business fundamentals, in which its poor balance sheet was clearly visible!")

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009
2008 Q4
Sales 38.775 million Net LOSS 0.084 million Receivables 163.773 Million Cash 2.222 million Total borrowings 144.574 million.

And the following was from last night:

Last night, June 2010:
2009 Q4
Sales 18.762 million Net LOSS: 146.552 million Receivables 152.339 Million Cash 0.440 million Total borrowings 139.043 million.

Sales suddenly plummet to only 18.762 million!!!!
Cash is clearly gone.
Massive provision of doubtful debts is made resulting the company losing 146.552 million.
So massive that the company declined to state EXACTLY how much bad debts was written off!
And the debts of 139 million looks incredibly massive when the company has almost no money!

ps: when receivables keep ballooning like in Kenmark's case, these receivables sooner rather than later will need to be revised as bad debts!

And we have the incredible news of the boss - 'runaway', 'sick', 'unconscious'.....and best of all, a helping hand from an old friend who decided to purchases tons and tons of shares BEFORE he got the call for help! (I wonder if the call was made in a conscious or unconscious state?) ( see More Incredible News Flow From Kenmark!)

And to cap it all... they claim it's now a kidnap case!


Seriously... who does the company think we are?

Ah Beng or Ah Lian?

Oh yeah.. the helping friend... he was so fortunate to buy container loads of the stock on the 1st and 2nd June.

Do compare the prices then and today (27 sen).

And if Kenmark share goes any much higher, this helping friend, sure is well paid for helping out eh?

And of course the jealous guys or the sour cows (LOL!) would accuse... 'plunge the stocks on bad news, grab as much as possible when the shares are almost worthless and the push it up, up and away!'

LOL! They are only jealous!

But seriously.... do you blame them for being jealous?!


( see Theory On Kenmark's Soaring Trade Receivables And Massive Provision Of Bad Debts also)

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Kenmark Suffers 146 Million In Losses!

Kenmark released its earnings. The results wasn't unexpected. Kenmark posts RM146m net loss in 4Q.

How the losses occurred was disgusting as expected!

And how Kenmark explained its losses was also disgusting as expected.

Just a mention of a provision of doubtful debts and impairment provision of assets. That's all.

Nothing else.

Hello! Our name is not Ah Beng or Ah Lian!

Can Kenmark show some respect?

How much was the provision of doubtful debts?????

Why is that so important?

Because in the posting Kenmark: MD and Deputy GM 'resigns', Share Plummets Big Time!!!

It was mentioned that trade receivables soared to rm 248 million!

Again I ask why so much? How come? Any hanky panky?

Look at the receivables reported its earnings today.

LOL! Did you see the cash balances left? What a joke!

Receivables is now only 151 million!

And as mentioned in the posting More Incredible News Flow From Kenmark!

• Kenmark still has not submitted its earnings. How? Any hanky panky? Why did the incredible surge in receivables happen? Receivables totals 248 million! What if these receivables cannot be collected? Provision of bad debts?

Receivables has now shrunk by 97 million to 151 million.

But that 151 million is still a worry. What if more provision of bad debts is needed? How much more?

And the biggest question is why did the receivables surge in the first place?

Sadly all this matters not.

The stock just seems to be a hot stock. For whatever reason, it matters not.

Sigh!

I wonder what SC has to say about all this.

Such a laughing stock.

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Kenmark: It's Now Kidnap Case!

My name is not Willy Billy either!

You cannot be serious!

Seriously.

• The drama continues: it now appears that managing director James Hwang Ding Kuo is a kidnap victim.
  
  The drama continues to unfold in Kenmark Industrial Co (M) Bhd (7030). It now appears that managing director James Hwang Ding Kuo is a kidnap victim.
  
  The group's new executive chairman Datuk Abd Gani Yusof, executive director Ho Soo Woon, and independent non-executive director Woon Wai En said this was reported by Kenmark's office in Taiwan but they could not clarify when and how the said incident took place.
  
  "That is what we were told by officials at Kenmark's office there," Abd Gani told reporters in a media briefing in Petaling Jaya, Selangor, yesterday.
  
  Hwang, Kenmark's managing director and major shareholder, went missing and was uncontactable as the group's fortune took a rapid turn for the worse since May 26. However, he resurfaced last Thursday, claiming to have fallen ill in China on May 24 and been in a delirious state.
  Hwang did not identify the nature of the sickness nor did he say when he expects to be well and travel back to Malaysia.
  
  Kenmark's new directors had their first board meeting on Thursday to determine the actual situation of the company and identify the next course of action.
  
  "We have met with key management staff and they have agreed to come back to work immediately," he said, noting that the factory expects to be operational next week. Kenmark's factory in Port Klang has production turnover worth RM30 million a month.
  
  "Our priority now is to get the business started and production running ... in the same time, get out from PN17," he said.
  
  The board will meet again on Monday and hope that they would have a firm plan by then.
  
  On Thursday, former KFC Holdings (Malaysia) Bhd deputy executive chairman Datuk Ishak Ismail emerged as Kenmark's biggest shareholder with a 32.36 per cent stake.
  
  As to whether Hwang will remain as managing director of Kenmark, Abd Gani said Hwang will be advised to step down.
  
  Kenmark shares, which resumed trading yesterday after a two-day suspension, more than doubled to 26 sen from 11.5 sen before.
  
  Kenmark also clarified that there was no default on the credit facilities, totalling RM20.9 million, granted by EON Bank Bhd.
  
  "There were some trade bills due for payment at end of May but due to Hwang's absence, it could not be paid and EON Bank in safeguarding their interest had then appointed the receivers on Kenmark Paper Sdn Bhd."
  
  As to its Vietnam business, the directors were told by Hwang Vietnamese authorities asked to take control of the premises because there were looting during the absence of senior management staff.
  
  Kenmark has also asked Bursa Malaysia for more time, or until June 30, to submit its financial results for the period to March 31 2010. However, Bursa Malaysia could not consider it because the request was not made in time, or 15 days before May 31.
  
  Read more: Kenmark: MD was kidnapped here

While all this going on... the stock plunged from 90 sen to 3.5 sen and then miraculously rocketed to a high of 29 sen!

My say?

Just suspend this stock!

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More Incredible News Flow From Kenmark!

In the posting: Kenmark: Sorry But I Was Sick

• 1. First bankers demanded some 72 million back from Kenmark.
  
  2. Then Kenmark said the MD resigned.
  
  3. Kenmark MD said he's sick. Was unconscious. Only woke up yesterday. (Apparently he claim he is still the MD)
  
  4. MD does NOT state what sickness that caused him to be unconscious.
  
  5. But... you cannot call him. Apparently family members barred all calls.
  
  6. Two executive directors from Taiwan has gone missing. MD did not state where they were.
  
  7. Apparently... a friendly party has bought a huge stake in the company. (hmm.. no changes of shareholders announcement made on Bursa. hmmm...... stock rallied yesterday (many did not know why))
  
  8. Company has NOT released its earnings.
  
  9. Company is now a PN17 stock and is currently suspended (yeah.. after surging like crazy yesterday!)
  
  10. Pricewaterhouse is contacted to determine the actual debts of the company.
  
  11. MD will only return back to Malaysia when he is healthy. Apparently he's too sick to travel.

Things have now gotten even 'better'.

Regarding Point 7. Apparently the deputy executive chairman is the buyer of the stake. (sorry. typo. Ishak is not the deputy chairman of Kenmark)

• Datuk Ishak Ismail, former KFC deputy executive chairman bought 32.36 per cent of Kenmark, a furniture maker, on June 1 and 2
  
  DATUK Ishak Ismail, KFC Holdings (Malaysia) Bhd's former deputy executive chairman, is now a major shareholder of financially-troubled Kenmark Industrial Co (M) Bhd (7030) as he bought while others were busy dumping the stock.
  
  He bought 32.36 per cent of Kenmark, a furniture maker, on June 1 and 2, as the stock hit record lows of between 3.5 sen and 4.5 sen. The group did not say who were the sellers.
  
  Kenmark also did not say how much he paid for the stake but based on the closing and last traded prices of the two days, Ishak could have spent about RM6 million. He may have even paid much less, or probably half of that, if he had bought the stake at the days' lows.
  
  Kenmark, a PN17 company, has yet to report its fourth quarter numbers for the period to March 31 2010 as its managing director and major shareholder James Hwang, a Taiwanese, went missing since last week.
  From then on, the group went into a tailspin as two banks said it defaulted on loans, named a receiver to a subsidiary while all operations ground to a halt and some 400 of its workers were uncertain of their future.
  
  Kenmark is now the subject of Securities Commission (SC) probe while Bursa Malaysia has ordered it to appoint a special auditor to ascertain if there are any irregularities.
  
  The group has hired Messrs UHY Diong as its special auditor.
  
  In 2001, Ishak was fined RM400,000 by the Sessions Court for giving false information to the SC.
  
  A former politician, he was once involved in a battle with the Lau brothers for control of KFC. Ishak was firmly in control of KFC until the Asian financial crisis hit Malaysia in 1997.
  Kenmark also named new directors yesterday. They are executive chairman Datuk Abd Gani Yusof, executive director Ho Soo Woon, and independent non-executive directors Ahmed Azhar Abdullah and Woon Wai En.
  
  Kenmark's independent directors Zainabon @ Zainab Abu Bakar and Yeunh Wee Tiong have tendered their resignations yesterday. (why ah?)
  
  "The new directors are currently assessing the current situation of the Kenmark Group and are in discussion with the receivers of Kenmark Paper Sdn Bhd to allow the re-activation of business operations at the business and corporate office at Port Klang soonest possible and restore market confidence," Kenmark said in a statement to Bursa Malaysia.
  
  The new directors also stressed that all employees have been paid salaries up to May 2010 and all payments to statutory bodies have also been made.
  
  On June 2, Kenmark said Hwang fell ill in China from May 24 and he could not be reached as his family barred all calls. The group's new directors hope that he could return by next month.
  
  As for the other two Taiwanese directors, Chang Chin-Chuan and Chen Wen-Ling who were also said to be missing, they have made contact with Kenmark. (so why they went missing? why ah?)
  
  Shares of Kenmark have been suspended since June 2 and its last traded price was 11.5 sen.
  
  Read more: Ishak now a major investor in Kenmark here

Many would be SIMPLY DISGUTIBATED with what they had just read!

Biggest question, is how much did Ishak bought the shares??? Who are the sellers????

Think about it.....

Here we have a share that was trading around 90 sen. Perhaps it was grossly over priced at 90 sen given the state of its business fundamentals, in which its poor balance sheet was clearly visible.

But the news that a willing buyer (friendly some more) suddenly appear just stinks the whole place up once again.

If the buyer was willing why didn't the buyer buy much earlier? Couldn't he bought on 31st May?

Why wait until the shit hit the ceiling? ( Nice to buy cheap, eh?)

Why isn't the sale and purchase of the shares more transparent?

This was all in the announcement posted on Bursa website: All it states is Ishak bought 20 million shares on 2nd June and 10 million shares on 1st June. Link here and here. And Unioncity Enterprises Ltd purchased 27.6 million shares. Why no price stated?

If it's an open market trade, surely people would accuse that the bad news ( chatter that apparently the MD had ran away due to banks demanding their money back ) drove the stock to almost worthless at 3.5 sen and now that the stock sank so low, a friendly buyer miraculously appeared to save the day.

Surely we are not talking about Robin Hoods here!

And to compound the matters worst, Kenmark shares miraculously rallied on the 2nd.

Yeah, later on that day, the market learned about the incredible Kenmark: Sorry But I Was Sick excuse!

Gee how nice people!

30 million shares purchased when the shares plunged into the abyss.

Go figure if Kenmark shares rallies higher.

What a wonderful capitalist world.

But seriously.... is this allowed?

Can SC allow all this?

And oh Bursa, what happen to all the QUALITY listing talk. Comeon... stopped thinking from a business perspective and keep on churning out stocks like this on the exchange. Quantity matters not when all the investing public get is mess like this.

On Star Business:

• Possible heavy losses for those hiving Kenmark shares
• Ishak is Kenmark’s biggest stakeholder
• Mystery of the disappearing MD

Kenmark still has not submitted its earnings. How? Any hanky panky? Why did the incredible surge in receivables happen? Receivables totals 248 million! What if these receivables cannot be collected? Provision of bad debts? ( see Kenmark: MD and Deputy GM 'resigns', Share Plummets Big Time!!! )

And mind you, this is a massive time bomb. If Kenmark does not submit soon, it would be suspended yet again.

And last but not least... in the Star article Ishak is Kenmark’s biggest stakeholder

• “James (the MD) called me on Monday night to help him out as he is sick. This is the company we both floated in 1997 when I was the bumiputra shareholder. However, I sold my shares a long time ago,’’ he told StarBiz

Monday night?

In the posting Kenmark: Sorry But I Was Sick

• "James Hwang in his letter has stated that he has been unwell and unconscious and was also uncontactable. He has now regained full consciousness but still physically weak," said the company in a statement to Bursa Malaysia on Wednesday, June 2.
• "It was only yesterday (Tuesday) I regained full consciousness but am still weak to travel," he said. He did not identify the nature of the sickness nor did he say when he expects to be well.Hwang will only return to Malaysia once he is healthy.Hwang also said he could not be reached by telephone as all calls had been barred by family members.

Sorry I am confused.

Ishak got the call on Monday night. If James Hwang was in China, say Beijing, the time zone would be the same as here, yes? So can I assume Monday night as in Monday night Malaysia time?

And James Hwang states he only regained consciousness on Tuesday.

Hmmm..... how?

And Ishak bought 20 million shares on Monday. See Link here

How now Brown Cow?

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