Thought I'd post up a few edited notes I made when researching this company recently.
General:
Website (products sold online as well as in stores): http://www.winha.com
It appears 'WINHA' loosely translates to 'Million Flag Network', though could be wrong
Winha International Group Ltd (OTCMKTS:WINH)
Shares ~50M, Price US$3.25, Market Cap ~US$162.5M (A$214M)
This company owns a subsidiary (100%) which has a ~45% stake in WQW.
Seems to be very thinly traded based on the public information I can find?
Winha Commerce and Trade International Ltd (ASX:WQW)
Shares ~96M, Price $0.435, Market Cap ~$42M
Oddly the market cap is much lower than one would expect given the parent company only has a 45% share in this entity which appears to hold all the important assets.
[see diagram below the post which outlines the ownership structure, my additions in green]
However, in audited financial results released recently, net profit was downgraded to $11.33million after $11.24million was recorded in impairments for the company's purchase of 'Flavours' and investment in bearer plants and leases. http://www.asx.com.au/asxpdf/20170703/pdf/43kcb0xz4h40px.pdf
Paying a substantial dividend:
Full year dividend of 3.5179 cents (unfranked) announced. This is a 7.5 - 8% yield on the current share price.
Ex-Date - 28 July 2017 [so still time to get in ]
Record Date - 31 July 2017
Payment date - 31 August 2017
In their prospectus they outlined an intention to pay out 'a minimum of 8% of the NPAT' in dividends each year.
About the Business (excerpt slightly edited from the prospectus):
THE WINHA BUSINESS (CHINA): The WINHA Business comprises an innovative business model centred around the retailing of local specialty food and beverage products (WINHA Products) from different regions across China. The WINHA Business aims to offer high quality food and beverage products to China’s middle class consumers.
The WINHA Products are currently sold to China consumers via forty four (44) franchise stores located in Guangdong Province, China (Franchise Stores), six (6) retail stores located in Guangdong Province (Retail Stores) and one (1) supermarket located in Guangdong Province (WINHA Supermarket).
The Retail Stores are owned by a subsidiary of the Company, Zhongshan WINHA Electronic Commerce Company Ltd (Zhongshan WINHA). Zhongshan WINHA has entered into management contracts with third parties, who manage the Retail Stores and purchase the WINHA Products from Zhongshan WINHA on a wholesale basis for re-sale in the Retail Stores.
The WINHA Business also operates two (2) flagship restaurants, known as ‘Experience Halls,’ where customers are able to consume speciality food and beverage products retailed by the WINHA Business (Experience Halls). The Experience Halls are managed by a wholly owned subsidiary of the Company, being Zhongshan WINHA Catering Management Co Ltd (WINHA Catering).
THE WINHA BUSINESS (AUSTRALIA): Flavours is a company incorporated in Australia and based in Melbourne, Victoria which wholesales fresh fruit and vegetables to high-end restaurants, hoteliers , caterers and other purchasers. Flavours sells a range of produce, including organic, heirloom and specialty fruit, vegetable and herb varieties, which are sourced from growers, suppliers and markets around Australia. The Company has acquired 49% of Flavours. The Company also has an option to acquire the balance of 51% of Flavours’ share capital, this option being exercisable during 2019.
The Flavours Acquisition will also facilitate the expansion of the Company’s business into Australia by assisting:
> the sale of the WINHA Products into Australia; and
> utilization of Flavours’ network of farmers and produce suppliers to import Australian food products into China for retail by WINHA’s China business.
Additional Notes:
Zhuowei Zhong (Chairman) bought $15,000 @ 50c/share on market in March showing confidence (already has a substantial holding / controlling interest).
The company primarily operates in the Guangdong Province which has a population of more than 100 million residents.
Search on Baidu.com found a few discussions around the company, some news articles (e.g. positive media around their charitable efforts), nothing that would make me wary.
Further interesting links: (some have Chinese text on images, use the Google Translate app on your phone with camera pointing at the text to translate on the fly)
Companies originating in China like this one are not without their risks, see this story in the AFR (http://www.copyright link/markets/e...-for-asx-listings-at-any-cost-20160224-gn32nh), however the company does not appear a fly-by-nighter having been listed in the US and trading for a number of years. I do find it more difficult to gather information on a Chinese company such as this one and compare it with it's peers.
There are a number of risks outlined in the initial prospectus. Still not very liquid in trade.
I could be misinterpreting some of the key points above, so certainly welcome any corrections. DYOR.
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I'm not betting the farm, but bought a few shares this morning.
Share price looks to have carved out a bottom at 40c (not much volume when traded below) and would be surprised if the share price doesn't rise in weeks ahead with such an attractive dividend being paid.
I like their business model with an intention of moving product in both directions (i.e. WINHA product from China into Australia and Flavours product into China).
Any thoughts? Any better value peers with the same potential you are aware of? Anyone seen one of their peers with such a strong dividend?
WQW Price at posting:
45.0¢ Sentiment: Buy Disclosure: Held
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