Replies to post #131934 on Sino Agro Food Inc (fka SIAF)

[RealDutch]

Like most investors, I would prefer dividends over shares buy back. But if I were in their positions, I would rather buy back shares, it makes sense since it is a lot cheaper and more beneficial for the company in long run.

They have gotten most things wrong so far, so I expect them to get this wrong as well.

The main reason why Solomon wants to do share buybacks is to compensate for the loss we suffered from the increases. It's a mental thing. And, because it gives him a lot of freedom when or how much to spend.

But, a company with zero credibility cannot induce confidence by implementing a share buyback program. And we all know where this will go, if Solomon is given a choice between investing the money elsewhere, or buy back shares. Because that's all a share repurchase program is, a commitment. Not a certainty. And often used by scams to give an impression that management cares. The critics will be all over the place. And, I will be one of them.

There are many practical issues with this as well, even if we give them the benefit of the doubt. Which nobody will do.

The long term benefits are not significant, as I already pointed out by giving you the XIN numbers.

They can do share buybacks, but not now. First they have to start paying quarterly cash dividends. Regain trust, and put a floor under the stock. Later, they can do share buybacks but only if they have a surplus of cash, as a way to reinforce and support the growth story (which is also lacking for the moment). And even then, they have to overcome some of the practical issues. Like all the restrictions that come with it.