Monthly Archives: September 2016

Tech Pro Reaches for Help from Blue Sky

Tech Pro upd

Tech Pro, 3823 H, the penny dreadful which dropped after a short-seller report, is hoping for a savior from Blue Sky Power, 6828 hk.  The company just appointed 47 year old Lee Tsz Hang, aka Sze Chun Lee, the previous CEO and director of Blue Sky Power, a natural gas refueller and trader.

Purchase and Placement Fail

The day before this announcement, on 8/31/2016, the company stated that a proposed placement shares – both by a general and special mandate, had lapsed.  These shares were to be issued to allow the company to buy the other 50% of Fuchao property group, which it had agreed to purchase for 387.5 Mill rmb on 6/3/2016.  The two placements were projected to raise net hk$616 Million  (about 530 Million rmb.) on a share price of hk$.25.  Without these placements, it’s doubtful the company could make the purchase since it has only hk$81.7 in cash and has been losing money annually from its declining LED business and soccer team funding of Sochaux-Montbéliard SA, (FCSM).With a plummeting stock price and the scrutiny of short-sellers, it’s prospects for debt financing are slim.  After the announcement of the hiring of Mr. Sze Chun Lee, the company reported the Fuchao purchase was also over since it was reliant upon the placement.

Blue Sky Power Exec to the Rescue

In an interesting turn, the company appointed Mr. Lee Tsz Hang. Blue Sky Power Holdings is currently a natural gas refueller and trader.  However, prior to this, it was China Print Power, a small-cap printer which had declined into a money-losing company.  Rather than liquidate, Mr. Lee used the assets of the company to transform it into a natural gas refueller and trader, issuing multiple shares and bonds and eventually selling a majority interest to Beijing Enterprises.  Neither companies have any relation to LED or property management.  However, if Mr. Lee Tsz Hang was able to transform an old fashioned, money losing print business into a natural gas company, riding the wave of China’s pollution edicts, the Tech Pro must be betting he can perform the same magic to transform it.  The company does still have cash and minimal debt. As extra incentive, he owns 64,370,000 shares in Tech Pro, about 1% and will get HK$ 35,000/month.To be continued.

Tech Pro Financial Statement from HK filing.

rmb 000
 Current Assets 6/16 12/15
  cash 81,741 128,579
  Trade Rec 140,880 142,981
  Inventory 29,392 30,396
  Other C/A 31,370 30,789
  Other Rec 107,724 112,468
  Pledge Bank Dep 498 487
Totl Curr Assets 391,605 445,700
NonC Assets    
  Prop/Pl Eq 68,195 68,562
  Intang 272,223 321,018
  other non C 5,635 5,179
  Cont Consideration 7,118 3,669
  JV Investment 374,753 366,641
Total Non C Assets 727,924 765,069
Total Assets 1,119,529 1,210,769
Curr Liabities    
  Trade 29,056 25,658
  Accruals 61,776 76,606
  Finance Lease Oblig 495 494
  Inc Tax Payable 21,153 21,153
  Bank 0 132
Total C Liab 112,480 124,043
Non C Liab    
  Finance Lease 508 741
  Def Benefit Oblig 2,374 2,051
  Def Inc Tax 66,503 78,222
Total Non C Liab 69,385 81,014
Total Liab 181,865 205,057
Assets – Liab 937,664 1,005,712
ca/cl 348% 359%
Tang Assets-Liab 665,441 684,694