Tuesday, March 23, 2010

Kenfair loses a billion

Hong Kong-based Kenfair organises the two-part Mega Show every October at the Hong Kong Convention and Exhibition Centre. This consumer products sourcing fair has been running since 1992 and is a solid piece of exhibition business. That is until the owners of Kenfair’s listed company decided to get into the commodities business in China. The parent company acquired the rights to a coal mine in Heilongjiang in 2008 and renamed the listed company, Sino Resources.

Since then coal deal has gone wildly off-track and both sides are suing each other. The coal mine and its business have been removed from Sino Resources’ books and the end result is a HK$990 million loss for the six months ended 30th September compared to an HK$83 million profit in the same period in 2008. The stock has remained suspended from trade on the Hong Kong Exchange since last July.

If Kenfair's owners would just stay focused on exhibitions, they might realise that they have a solid business there.

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