YaSheng Group (HERB)

[RealDutch]

I think most people are clueless about the course of events Emil I'm not sure I am.

Heads are rolling apparently. Shouldn't be a surprise with all the delays we had, no website, and a depressed stock. But I wonder what the new CEO, mr. Cui, can achieve. He may not even speak English.

So I guess we are one (big) step closer to HERB going private but it's still a long shot. But if it does, they will have to give us at least $5/share because the appraisal firm already said that the company is worth $2.4 billion or $15/share.

They claim to be a transitional company, thus reported the results of the old assets in 2015 up until dec 29. The profit was $112M and we don't know how the new assets performed.

There is roughly $111M in accounts receivables on the balance sheet and some $45M in debt because the assets that were swapped in were worth more (I think). That gives us some $65M in net cash as of 1/1/2016. Add another $75M for the first 9 months of 2016 IMO. And another $40M in Q4. That's free cash flow.

So now we are waiting for the Q1 and Q2 results and then they will be fully reporting again. If they detected a problem with the new assets then the odds of a buyout will go up, IMO.

Q1 and Q2 are irrelevant. They sell most products in Q3 and Q4. But we will see hard cash on the balance sheet instead of A/R.

No mention of a spin-off or listing in the 10-K but I suppose they were busy. They will be quite aggressive when it comes to acquisitions. Apparently we lost Angel Star infant formula in the swap but I'm not so sure.