An E Mail from my friend who spoke to Mr. Pian on Tuesday: Excuse format mishaps from the EMail copy. Some of this info will be old news for many of you. It is presented to show consistency.
Here is a synopsis of the conversation I had with Gene:
I. Teik Tatt has three lines of business:
1. Rubberbands - These are high quality rubberbands that the company has been producing since 1961. While this is not an exciting business, it is strong and growing. The rubberband unit for the first nine months had sales in the 2 1/2 - 3 million range.
2. Rope - This is not rope or yarn that you would buy in the store, it is a high quality polymer that is used to make netting for fisheries, etc. This line is also very strong and growing each quarter.
The Rope unit for the first nine months had sales in the 4 - 4 1/2 million range.
3. Remediation - They have only been in the recycling line for about a year. This line is expanding rapidly, and they are expanding in Vietnam and Europe. The European expansion is an aluminum recycling plant. They are talking with several automotive corporations to sell the aluminum to them. The Reclamation unit for the first nine months had sales in the 6 - 7 million range.
The Rubberband and rope units are their highest margin products.
II. SETO is in the Diamond tool line of business. This line is starting to see very strong growth and should increase at a high rate, but I did not ask at what rate. His son runs the factories, and his daughter is responsible for the Office Automation side of the house.
The company just filed the K with the SEC.
The family owns 35% of the original 10 million shares, while the family that owns Teik Tatt holds the entire 10 million shares. There is around 6 1/2 million shares in the active float, and according to Gene, the 13 1/2 million shares held by the two families will be very tightly held for a long period of time. Gene said that they want to establish a high quality multi faceted company that is built on continued growth and profitability. He is not looking to run the price of his stock up to $9 just to have it fall back to .10. He has been in that situation and it is not health for his company, his employee, or the shareholders.
He has known the family for over four years. When asked why would an established company with exploding sales and earnings be acquired by a company trading at .10. He said that with the strength of the two companys, especially Teik Tatt, that Teik Tatt did not view SETO stock as .10 but rather $4.00.
The company has met all the NASDAQ requirements except price and he is determined to acheieve NASDAQ listing. He also wants to achieve NASDAQ listing and maintain a stable price, not a rocky one. He is presently talking with two market makers, and he expects them to be on board in 4 - 6 weeks.
He stated that he does not want any firm to hype his stock, just present the fundamental, and look at the growth that the company expects to acheive in the next two - three years. He expects the Remediation side to do 20 - 22 million next year alone with the total company doing 30 - 35 million with projected earnings around 3.8 million.
Teik Tatt was planning on doing an IPO on the 2nd Market, which is the Hong Kong equivalent of the NASDAQ, but with the market conditions this past summer and fall, it was not worth it. The company felt that it would be extremely undervalued and hurt by the recent market conditions.
Also, they expect to get alot of recycling business from the existing customers that SETO presently sells to. Teik Tatt does remediation on circuit boards which contain, gold, silver, platinum, copper, nickel and other alloys that they separate and melt into ingots and sell. They also resell the recycled plastic as well.
Gene said that they want to be a very influencial company in the coming years and he feels that in the next 3-4 years SETO's side of the house will be doing 15 million in annual sales and Teik Tatt's side will be doing 75 million.
End of Conversation
Note the active float will remain in the 6 1/2 million range, even after the acquisition. This is a professional operation.
TG |
