Chuang’s China Investment Ltd 8 September 2017

Home » Chuang’s China Investment Ltd 8 September 2017

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.

Students are mixed about special dividends: considering the net income the dividend could be higher

Share buybacks inconsistent with expansion plans – why not invest money instead of buying shares?

On the other hand, students point out good track record of board in timing repurchase decisions; shareholders trusted board with flexibility before

Proposal Excerpt of Student Recommendations
For Against
(2)Dividend
  • Dividend in total higher than before
  • Considering the net income the special dividend could be even higher
(3)Director election
  • Good proportion of executive and non-executive directors Experienced; initiated the new strategic moves
  • New knowhow in the board needed for goal to become a key property market player
(4)Mandate to repurchase shares
  • In the last year the same proposal has been made and shareholders voted for The board showed that it used this power in a good way and was able to increase shareholder value and stock price
  • Can have a negative impact on leverage
(5)Authorization of equity issuance
  • Gives management more flexibility. Limited to 20%
  • Managers have the power for the timing of issuance. Danger of dilution if not correctly applied

Link to proxy statement:

http://www.chuangs-china.com/en/investors/a.html?pdf=20170726_agm.pdf