Good to see some more questions on DFM. Its sad people like to see what they want to see, in this case i think the optimists are blind to the risks of fradulent behaviour.
Put it this way, economics 101 companies list on the stock market to raise capital to expand operations. DFM listed on the stock market and didn't raise significant capital, in addition the reported profit made last year more than outweigh the value of shares released to public on IPO which doesn't makes sense. Then there's the chairman owning 80% of the company, and kindly offered his share of the company dividend as interest free loan back to the company. There's no such good thing as interest free loan, especially one that is highly theoretical on the books profit to on the books loan.
It almost seems the founder listed on the ASX for the sake of having a public listed company, which again doesn't make a whole lot of sense given the reporting and legal requirements.
The chairman is 30 something guy with no noted achievement in Chinese agriculture besides what is stated in the company information releases. Given the Chinese jurisdiction the company operates in, ASIC are limited to what they can investigate, until everything turns to bad then it becomes clear.
In summary this post isn't telling you to buy/sell, have some skepticism and common sense. Maybe not putting the house on this one and thinking everything on the annual report is 100% correct? If it is not then the money is all gone. There are multiple examples in the US where chinese company released information and accounts that later turn out to be fradulent, once again the US market monitors didn't do anything sooner because they are not able to investigate in depth in China. The market is always right in the end.
DFM Price at posting:
$1.02 Sentiment: None Disclosure: Not Held
