News blog
SovGEM
- BY: Andrew Hore |
- POSTED: 18/03/2008 |
SovGEM increased its net asset value in 2007 by 23% to 34.4p a share.
The market turmoil since then has hit the China-focused investment company’s portfolio and by the 14 March 2008 the NAV was 27.4p a share. That is only just below the NAV at the end of 2006.
Chief executive Hugh de Lusignan remains upbeat. He says that many of his investee companies are growing their earnings by at least 25% a year but are on single figure PE ratios. He doesn’t believe that they will be “materially affected” by the current stock market problems.
Part of the reason for the fall in the share prices of investee companies has been that funds have been forced to sell investments to generate cash.
The investee companies that are currently quoted on the US OTC Bulletin Boards are planning to move to a major US stock market. For example, Sinoenergy, a manufacturer of compressed natural gas and gas station
Equipment, is looking to move to Nasdaq. Some of the unquoted companies are reaching the point where they could float or go for a trade sale.
SovGEM is fully invested so it will need to raise cash from existing investments in order to invest in new ones. The majority of the portfolio is in quoted shares.
Hugh de Lusignan believes that that a secondary junior equity market may emerge in China for local private companies “with a three-year or longer track record of profits and growth”. That could provide further opportunities.
SovGEM shares were unchanged at 17p.
© 2024 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
- Browse by issue
- All issues
- Popular tags
- All tags
- AIM Micro feeds
Keep up to date with articles published at AIMMicro.com. Subscribe to AIM Micro RSS Feeds
|