PYI Corporation September 1 2017

Home » PYI Corporation September 1 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.

Current directors are experienced but have been directors for a long time. Students mixed on re-election, ask for new ideas

Students point out that PYI has not paid dividends for 2 years – time to reconsider?

PYI needs to reverse bad performance of last 2 years, stabilize cash flows, restructuring plans to secure long-term development, students comment

Students suggest increasing stake in Paul Y Engineering to bring it to majority control

On the proposed authorization to repurchase shares: students find PYI has too little debt and think timing for repurchase is good due to low valuation

Proposal Excerpt of Student Recommendations
For Against
(2)Director Elections
  • Current directors have a lot of experience, with the company and at the HK stock exchange
  • Current directors are old and have been directors for a long time – fresh ideas needed, possibly with a new director.
(3)Authority/limits to issue and repurchase shares
  • Current capital structure too equity-based; repurchasing of shares would lead to a better capital structure and enable the company to benefit from tax shields of debt
  • Timing is great for repurchases since current share price is undervalued; repurchase can also signal the market that the firm is strong

Link to proxy statement:

http://www.pyicorp.com/wp-content/uploads/2017/07/e_498_Notice-of-2017-AGM.pdf

 

Video:

https://v.qq.com/x/page/a0537m2c8xe.html