Global Sources made offer for InfoCom trade shows

In a 54-page circular submitted to the Hong Kong Stock Exchange on 14th February, Sage International revealed that Global Sources offered them HK$6 million for their exhibition assets. (See pages 8, 9 and 24.) Sage claims that the offer was received on 7th February 2011 - after Global Sources first expressed an interest in Sage's exhibition portfolio as early as May 2010.

Sage (formerly Info Communication) is instead opting to sell its exhibition business back to the founder of those exhibitions, Eddie Leung, for just HK$3 million. Sage offers a number of reasons for selling to Leung instead of taking Global Sources' higher offer all of which boil down to: it would be too much trouble, effort and expense to take the higher offer.

Infosky (Sage's subsidiary which operates its exhibition business) posted revenues of HK$47.8 million and a net profit of HK$2.4 million for the year-ended 31 March 2010.

Leung has done pretty nicely on this transactions as he seems to have sold his stake in InfoComm in October 2007 for HK$55.2 million. (At least we think that is what happened. You would have to be a forensic accountant to wade through all of these filings.)

The management of Sage International best hope well-known, Hong Kong-based shareholder activist David Webb doesn't decide to have a look at these string of transactions - in which minority shareholders have not fared so well.

Some of our other posts on Info Communication's woes can be found here.

Eddie Leung buys back exhibitions from Info Comm

It appears that Info Comm's exhibition business is finally free. Hong Kong-based Info Communication has been in quite a mess since 2008 which the company changed ownership and made a failed attempt to buy a coal mine in China. Since then there has been a jumble of law suits, tinkering with shares (Info Comm is a listed on the Hong Kong Stock Exchange), new owners, a name change (the company now trades under the name Sage International) and finally a new core business. Sage International is now focused on... funeral services in China.

In November last year, the company announced it would sell its exhibition business, with details to follow. The details of the transaction were sent to the Hong Kong Stock Exchange last week. The transaction involves Sage’s 99.5% stake in subsidiary exhibition organising company, Infosky. The purchaser’s has been identified as a director of Infosky, namely Info Comm’s founder Eddie Leung Tin Fu who has paid HK$3 million (US$385,000) for the exhibition business.

The company's exhibition-related revenues have fallen from a high of US$11.4 million for the year ended 31 March 2008 down to US$6 million in 2010. The exhibition business posted a loss of US$1.3 million in 2010, but now that the exhibition operations are back in the hands of its founder, we can expect Leung to get back to business. In July, he signed a deal with the HKTDC to jointly launch the Better Living Expo. We also anticipate that Eddie Leung will return the company to the pre-listing brand name, "Paper Communications" since that is the name he used to sign the deal with HKTDC last summer.

Perhaps now Kenfair can get its house in order. Kenfair also tried to buy a coal mine in China in 2007. Since then it has gone all wrong and Kenfair, now renamed Sino Resources Group, has had its shared suspended since June 2009!

News this week: Info Comm revenues increase

Info Comm first half revenue jump 82%

Hong Kong, 11^th November: Hong Kong-listed Info Communication (Info Comm) has announced its interim results for the six months ended 30^th September. Revenues were US$1.96 million, a jump of 82% over the first half of 2009. Exhibition businesss generated 61% of revenues at US$1.2 million, a year-on-year 22% increase.

Info Comm recorded a net loss of US$3.2 million compared to a loss of US$2.3 million in the same period last year. Management attributed this loss to weak performance in its exhibition businesses and the costs on share-based payments for the granting of options.

Info Comm announced this week, the possible disposal of its exhibition organisation business to a connected person. Terms and conditions have yet been confirmed.

Info Comm looks to sell exhibition business... finally

Hong Kong-listed Info Communication Holdings Limited issued an announcement last week to the Hong Kong Stock Exchange stating that the company is in negotiations with a "connected person" regarding the disposal of its exhibition business.

This announcement is not much of a surprise given that Info Comm's exhibition business has suffered a certain amount of neglect from management since founder Eddie Leung sold his stake to outside investors in November 2007 and the new investors embarked on a failed bid to acquire a coal mine in Inner Mongolia. The outside investors have no background in exhibitions and seem to intent on taking the listed company in another direction.

Info Communication has a portfolio of B2B trade shows focused on a variety of industrial sectors including metals, plastics, packaging, textile machinery and equipment. Info Comm holds exhibitions in multiple markets in China including in Beijing, Dongguan, Guangzhou, Suzhou and Wuhan. The company also organises shows in Hong Kong, Jakarta, Kuala Lumpur and Ho Chi Minh City.

No word yet on who the connected person is and it is unclear if Eddie Leung still has a stake in the listed company.

Coal mines, forests....anything but B2B

We reported before on Kenfair's acquisition of a coal mine (click on the Kenfair label if you want to follow that saga more closely). It seems that they were trend setters.

We wondered why non-exhibitions people were buying into Eddie Leung's Info Communication, the Hong Kong GEM-listed parent company of Paper Communication, organiser of industrial trade fairs in China. All is now becoming clear as they too appear to have gone into the coal mining business. This set the market alight on Friday when volume spiked to 142,550,000 shares, 147 times above the daily average of 966,034. Mind you, after all that excitement, the share price ended up down 3¢ at HK$0.32.

Meanwhile, B2B online market TradeEasy has gone down the same route, announcing the acquisition of a forestry project in Papua, Indonesia for US$157 million. We first reported that back in October in the same posting linked above relating to Kenfair's entry into the coal-mining business.

It seems that the China's hunger for natural resources is looking like a better bet to some than US consumers' demand for Chinese-manufactured bric-a-brac these days.