China City Construction Group (HK:711) 22-August-2016

Disclaimer: These are excerpts from student assignments conducted as part of a Corporate Finance class. The opinions represented do not necessarily agree with mine. I do not vouch for the quality of the recommendations or the accuracy of the numbers. Follow the recommendations on your own risk.

Next set of voting recommendations by @LSEPKUSummerSch #CorpFin #students are for the #AGM of #ChinaCityConstruction $HK711 on Monday

#students approve of current directors but point of potential conflicts of interests since they are related (brothers) to managers #AGM of #ChinaCityConstruction $HK711 #CorpGov #Board

#students question proposed share issuance since they just raised debt recently #CorpFin #Leverage #ChinaCityConstruction $HK711 #AGM #equity #debt

#students also point out high current #leverage, oppose proposed #sharerepurchases which will increase leverage further #CorpFin #ChinaCityConstruction $HK711 #AGM

Proposal	Excerpt of Student Recommendations
Proposal	For	Against
(2)Director elections/(3)Director remuneration	Directors are skilled, qualified, and suitable	Mr. Bond is 62 years old and may have a short time horizon in mind. It may be useful to pay him with more equity Directors are related to each other – sceptical about ability to monitor management
(5)/(6)Authorization of share issuances and repurchases	Good recent performance track record	China City has just recently issued debt and a lot of cash – it is not clear why they just again issue equity. Under these circumstances outsider investors may take issuance as a signal for overvaluation, which will depress the stock price

Results:

http://www.moqixu.com/wp-content/uploads/2016/08/LTN20160822504.pdf

Dr. Moqi Groen-Xu
Senior Lecturer-Queen Mary University of London, School of Economics and Finance