The situation does not looks as dire as the fall in share price suggested. It also looks like, all the bad loan have been paid out by DXF.
subrogation payment monies are money that the company have paid to creditor on behalf of the clients.
The company pay out 48 million dollar, now the company have a 48 million dollar claim against their client assets.
Before they make the guarantee, DXF would have make sure the client hold enough assets should the loan sour, like now.
But let assume, at the worst possible case. They can only recover 80% of their subrogation money and need to write off 20% of the guarantee money? However, from my research. The average statistical average is more like 2 – 5% not 20%.
Even at 20% write off, That’s only a loss of 10 million Dollars to date.. out of their capital of 160 million dollar.. This puny loss, definitely does not warrant the share price dropping from 60 cents to 5 cents..
Current NTA alone is worth 20 cents per share.
DXF Price at posting:
5.0¢ Sentiment: Buy Disclosure: Held
