Author Topic: 0703.HK - Future Bright Holdings  (Read 61050 times)


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Re: 0703.HK - Future Bright Holdings
« Reply #140 on: January 29, 2019, 09:47:18 PM »
I invested in FB early 2015 and remain invested. It is the largest loss-maker in my portfolio, but I remain patient.

An unexpected disruption to the company's business started in 2014 with the Chinese government starting a campaign to fight corruption on all levels. Officials and business people, whether corrupt or not, don't want to be seen spending money in Macau. Visitor numbers to Macau dropped dramatically. FBs poor performance in the catering and food souvenir business were a result of this development. The lack of interest in the Hengqin development and Yellow House probably too. All these projects were started before 2014. In retrospect, very unfortunate, but I do not consider it as proof of FBs management incompetence.

If FBs sales would lag behind the visitor arrivals in Macau, that would worry me a lot more. However, both remain strongly correlated as pointed out earlier in this forum. Hence, I am waiting for the tourist arrivals to recover. Is it realistic to expect such visitor growth? I believe so, because of a few longer term trends:

  • The Chinese government seems to maintain Macau's status as the gambling monopoly within greater China.
  • Macau is being repositioned as a more wholesome and family-oriented offering, where gambling is only part of the overall experience.
  • Most Chinese citizens have not visited Macau yet, while gambling is widely accepted within Chinese culture.
  • Connectivity to and within Macau is being improved.

Next week is Chinese New Year, which is traditionally followed by a peak in casino visits. This means, we will soon get some indication about the appetite to visit Macau again. Gong Xi Fa Cai !

Don't forget to add the opening of the Zhuhai Bridge to your list of potential catalysts. I've been holding a bit of this for a while as well.
Ferengi Rule of Acquisition #3 "Never spend more for an acquisition than you have to."


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Re: 0703.HK - Future Bright Holdings
« Reply #141 on: April 19, 2019, 11:26:41 AM »
I appreciated reading Genyi's thoughts. I've also held for several years, but am not sure what to think now given the results of the Souvenir stores, Henqqin, and the vacant rental property. Admittedly, I was being hand held by convincing analysis from The Red Corner Blog, but the radio silence from there adds to my insecurity on this one.


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Re: 0703.HK - Future Bright Holdings
« Reply #142 on: April 23, 2019, 12:46:46 AM »
At current share price (at around 0.4x P/B), it seems like the market has priced in (a) continued vacancy of the Yellow House; (b) continued loss of food souveniers; (c) continued dismay performance of food and catering business; or, (d) a right issue which would be highly punitive and dilutive - but perhaps out of no choice, so that the Company has the funds to meet the remaining developmental obligation of Hengqin by 2021, shall the current sales plan does not materialise.

I am less concerned about (a) to (c) given the turn in general improvement in market -- especially if one is to take a medium term of over 2-years. As long as they are disciplined in their expansion -- a big if, I know, but I am hopeful they have learnt their lessons especially after Huafa, the business should finally stabilise.

The Hengqin appears to be the least predictable and most problematic as it is clearly an area where the Management has zero expertise and experience (and I am not sure why they never bother to at least hire someone with the relevant operational experience). Why would any informed buyer (lest an experienced developer that could bring this to closing line) pay anything remotely closer to fair market value as currently ascribed to its book - when (1) this seems a challenging site with multiple issues from the start; (2) there is a race against the completion timeline which is ticking every day; (3) a seller with weak position and not much other option?

Lastly, would be grateful if anyone who has access to the report below share some of its highlights:


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Re: 0703.HK - Future Bright Holdings
« Reply #143 on: April 23, 2019, 08:38:52 AM »
I'd enjoy reading those reports but an expensive paywall.