In RED below is the two good takes in today’s announcement.
I am somewhat surprised that this can be taken as a negative.
If we reflect on the past the original prospectus raised some $30-40m AUD over $25m came from Chinese investors. An small Australian Broker was asked to assit in getting a spread of local shareholders. This went well. In the first year as a ASX listed company the results outstripped what was forecast. The share price responded well topping at $2.49 What followed is the was some of the shareholders seceded to redistribute (mostly to their connected entities). Unfortunately as these entities existed in the prelisting company we do not know exactly what they contributed to present a newly formed holding company DFM.
Unfortunately as it turns out the overall spread IMHO was inadequate,highly concentrated in the top 5 let alone the top 20.
But you must ask yourself ..HAS THE COMPANY adequately PREFORMED…few here should doubt that. Any company with a 40% margin on its products and realizing a free cash flow of approx. $90mAUD (only distributed approx. $10mAUD ..the bal was in share at $2.07) has a bank role to substantially grow the business. And in China potential growth is large.
The company must decide to grow in better seasonal plantings and enter upstream matkets.
This has been flagged (hopefully includes Australia plus a local director).
We are told despite the cash reserves and possible banking growth needs, we could see some sshare issued. If I owned a orchard and got paid in part share at today's prices I would be happy.
I would enjoy the upside.
I feel it is highly unlikely that the new shareholder is NOT in for a short turn.
As I said before for the Chairman to let his first 7mill share go at this level (He still has over 320 mill shares is a magnanimous effort. The style of the investor should be a market maker and reduce swings done by the IB bot machine from todays announcement
“To facilitate Mr. Hung Cheung's entry to the register, Dongfang's major shareholder and chairman Hongwei Cai has sold 7 million shares on 13 September in an off-market transaction at $1.01 per share, the closing price. In addition, Mr. Hung Cheung has stated his intention to increase this stake, and has also purchased Dongfang shares.
Commenting on the transaction, Dongfang's CEO Mr Charles So said: "We are excited to have Mr. Hung Cheung invest in our company, and value his strong support. "The Company is now in the midst of harvest season, and we expect to surpass last year's record output of 240,000 tonnes of fruit products. We look forward to reporting on a strong financial performance in the year ahead." Dongfang controls plantations spanning in excess of 9,800 hectares, all located in China's premier citrus fruit district, the Ganzhou City district of Jiangxi Province.
