Ordinary shareholders will be in a better financial situation if...

Ordinary shareholders will be in a better financial situation if Mesbon can be taken over by its local rival e.g. 'Huading'--- who is making almost identical products just under different brand, but valued at more than 2 times PB and 100 times PE, roughly four times the current market valuation for Mesbon. Even its American rival Unifi--- who is losing market share to the Chinese, is gaining strongly over recent weeks (google it for share performance and latest March quarter profit update). I think infrequent market communication and stock illiquidity is the key draw back here.

Among the manufacturing spectrum, the nylon industry is now the most low margin business, (used to be 8% margin in 2010, with only 1%-2% net profit margin now, Shen said the bottom line for this industry is 2% long time ago), such a low margin environement is likely to be temporary because firms can't survive under this margins for long, smaller firms will have to go out of business first, similar to Unifi's experience in the 90s. Having said that, I note another subsidiary of Shen is planning to be listed on the main board and is on the waiting list, we should see increased industrial consolidation in the coming year.