MANGLED English aside, we can only applaud the Hong Kong outfit's straight-bat portrayal of a pending loss as a "profit warning", rather than an "earnings revision" or "guidance update".
Wah Nam has chosen a poor time to expand from its staple of HK airport limousine hire to iron-ore development, via its tortured acquisition of Brockman Resources. Management said the loss was "mainly attributable by a significant impairment of the intangible asset arisen from the acquisition of Brockman due to recent unfavourable market conditions".
Wah Nam last month moved to compulsory acquisition of Brockman shares after a second mop-up offer. Despite staunch resistance, the initial scrip offer proved surprisingly successful, with Wah Nam securing 55 per cent of the Brockman register. In the ensuing period the steam has hissed from the sector like a broken billy.
Brockman's Marillana project is costed at $1.9 billion and requires port and railway development to go ahead.
Given the turning cycle, we'll avoid any exposure to Wah Nam, even when it changes its name to the more palatable Brockman Mining.
BRM Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
