A letter of concern to LVT's Chairman.

PaulRen's picture
Submitted by PaulRen on Wed, 31/12/2008 - 8:24am
Category: 
Company Articles

 

 Proprietary independent research on Asia Emerging Markets Investing

 

 

Thaistocks.com SA                                                                                                           
25, Ave De Bude
1202 Geneva, Switzerland.
e-mail: paulren@thaistocks.com                                           

December  29‚ 2008    

Mr. Ongkoon Youman
Chairman of the Board of Directors
L.V. Technology Public Company Limited.
719 KPN Tower, 9th Floor (Zone C-D)  Rama IX Road,
Bangkapi, Huaykwang,
Bangkok  10310

RE:  The long lack of transparency at LVT and so not maximizing/optimizing profits for shareholders.

Dear K. Ongkoon Youman,

As a way of a short introduction, we are Thailand’s leading electronic publisher of independent views of Thai stocks -with a near 12 year history on location besides over 19 years professional experience here.  For 8 consecutive years running, Forbes has awarded us the “Best of Web” on our subject and I have been invited on CNBC TV 4 times.  In the global search engines we rank at the very top in Google, Yahoo and MSN which combined command well over 90% of the world’s internet searches on Thai stocks.  I have been quoted in just about all the major financial publications both in Asia -as around the globe.  On most  days some 300 to 500 unique investors log on to our web site and many are registered paying members. Thousands are registered users, as some past articles/information is free to all.

We have followed your company for over 2 years and noted with interest the steady earnings progress of MAI listed LVT.  In fact, smaller capitalized MAI and SET listed stocks is our core strength as we find many such firms, fast growing and overall well managed -and I have visited your company in person in the past for an update, however Mr. Chuchat Bunnag, your managing director was not available. Fact is, and this is the issue here, in my long experience LVT is among the least open companies I have encountered in years. There have been no IR or MAI presentations at all -and the only broker report I could find is from some 3 years ago. 

A search in the ‘Bangkok Post’ today on your company came up with nothing except noting that you are a listed company.  And a search in the ‘Nation Newspaper’ reported when you went public plus one earnings release since from 2007,  hidden among 8 other companies.  Currently your stock price is trading 10% lower then when you went public (IPO) some 4 years ago, at the time LVT (year 2004) you had net profits of ¼ of what you will likely earn this year!  LVT is never in the business news, nor as ever issued any press releases or MAI presentations on how well your  company is doing.  Your stock price so has diminished to a record low p/e and price to book ratio, both to half the average MAI listed stock.

The total shareholder return to us (as is TSR in corporate governance) has so been deplorable. This so raises serious corporate governance questions for us shareholders.  Clearly the lack of transparency and openness has been the norm at your firm for too long.  As major shareholders in LVT we would like to ask why is this so? As once a firm here is viewed as a “wallflower dud”,  it will be most difficult to get out of this sticky tag and so then get a discount valuation perhaps forever? Clearly this cannot be your intention/goal?

Page 2   From Paul A. Renaud.   Thaistocks.com

To:  Mr. Ongkoon Youman,  Chairman of the Board of Directors . L.V. Technology Public Company Limited.

Besides transparency and corporate governance concerns, in the field of finance we can clearly show that a low stock price over time increases a firms cost of capital.  By LVT deciding to refuse, for so long, to have MAI  IR presentations  etc., encourages investors to avoid  your shares.  By LVT not being more open in not inviting broker analysts and press reports -and overall insisting on keeping such so low profile, for so long,  your are not maximizing profits of this firm. And so not running this firm for the benefit of us shareholders. 

As is now on the MAI (as on the SET) exchange, LVT is the most undervalued listed stock of any I know of.  This is clearly not satisfactory to our group of substantial shareholders and today we wish to voice our grave concern and unease to you about this state of affairs.

Further and along with the lack of transparency,  it has come to our continued/regular attention that Mr. H.J. Nielson, a director and founder of your company, is very vibrant in legally trading large volumes of insider shares in LVT; and this on a highly regular basis -and far more then anybody else in your firm.  In the past two years alone Mr. Nielson shows up all over the SEC insider transactions board with well over 100 different separate transactions in warrants and shares. (see separately pages/list on this enclosed).  Just recently, and just as one example, he bough 4 mill. shares at  a price of 1.79, only to sell out 800,000 again at 1.69, just a few days later.  What does this mega transactional activity convey to us shareholders or potential other shareholders, when on top of this activity, LVT remains year after year tight lipped and closed -as a public company?

While the general level of interest rates have dropped to record low levels in Thailand as elsewhere, your stock price is at a by far at record low valuation for some time, even adjusted for the general market drop here in the second half of 2008. Low interest rates should command higher stock valuation over time. In recent weeks the SET and MAI index have recovered some 10-15% from their low points, but during this same time your stock price only drifted even lower. 

As pointed-out, a low stock price increases in time a firms cost of capital. So your continued inaction, by refusing in giving investor presentations to the MAI and Thai broker analysts (besides other new financial press-services), is clearly not in alignment with the interest of us shareholders.  Especially so, when at the same time a key insider and director energetically trades LVT shares. This at the very least raises serious corporate governance issues we desire for you to address.

Today we wish, with the representation of a broad group of large shareholders, express to you our serious unease and concern on this.  It is our highest hope/expectation that you so will start without further delay a policy of far more open transparency and so better corporate governance via news flows in explaining more of your public company to the proper venues mentioned above and in other credible ways, convey to existing and potential investors the past success, challenges and prospects of LVT and besides give a MAI IR presentation on your company.

Best Regards,

Paul A. Renaud.
www.thaistocks.com
--
Thaistocks.com SA, Geneva, Switzerland.
Paul A. Renaud.  - from Morgan Stanley, USA - to over 19 years on location, analyzing the Thai Stock Market.   E-mail: paulren@thaistocks.com  or, paularen@gmail.com

Cc:  Thaistocks.com/members.     -Total of 8 Pages -

Page 3   From:    Paul A. Renaud.  Thaistocks.com

To:  Mr. Ongkoon Youman,  Chairman of the Board of Directors . L.V. Technology Public Company Limited.   Huge amount of transactions by a director, while at the same time no IR news on LVT.

Here is the list of hyper frequency insider transactions by Mr. Nielsen over the past 2 years, even while LVT remains closed on company IR news, as public company liste on the MAI.   Total of 8 pages.   Source Thai SEC, see:  http://capital.sec.or.th/webapp/corp_fin/result59ce.php

HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 26/12/2005 23/12/2005 5,367,000 4.50 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 26/12/2005 23/12/2005 1,000 4.50 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 10/01/2006 09/01/2006 292,300 2.79 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 10/01/2006 04/01/2006 1,850,000 4.50 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 10/01/2006 26/12/2005 7,600,000 4.50 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 12/01/2006 11/01/2006 140,000 2.69 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 12/01/2006 10/01/2006 135,700 2.70 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 24/01/2006 24/01/2006 538,100 2.24 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 26/01/2006 25/01/2006 292,800 2.14 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 01/02/2006 25/01/2006 200,000 3.00 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 01/02/2006 30/01/2006 300,000 2.68 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 01/02/2006 26/01/2006 812,900 2.02 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 01/02/2006 27/01/2006 3,356,200 2.20 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 28/02/2006 17/02/2006 7,771,034 0.00 Buy-RO 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 03/03/2006 01/03/2006 880,200 2.26 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 06/03/2006 03/03/2006 777,000 1.36 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 16/03/2006 16/03/2006 537,000 2.12 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 16/03/2006 15/03/2006 463,000 2.10 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 23/03/2006 17/03/2006 800,000 0.00 Receive 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 23/03/2006 17/03/2006 150,000 0.00 Receive 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 29/03/2006 29/03/2006 800,000 2.19 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 11/04/2006 11/04/2006 5,000,000 2.08 Buy 
HANS-JORGEN
IBSEN  NIELSEN  Reporter Warrant 11/04/2006 11/04/2006 2,000,000 1.11 Buy
 

HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 11/04/2006 10/04/2006 1,000,000 1.09 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/04/2006 11/04/2006 500,000 1.13 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/04/2006 11/04/2006 1,000,000 1.74 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 16/05/2006 16/05/2006 200,000 0.85 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 18/05/2006 18/05/2006 100,000 0.88 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 02/06/2006 01/06/2006 200,000 1.30 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 02/06/2006 02/06/2006 300,000 1.34 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 06/06/2006 02/06/2006 7,000,000 0.00 Receive 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 09/06/2006 08/06/2006 300,000 1.27 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 09/06/2006 08/06/2006 254,000 0.55 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 14/06/2006 09/06/2006 496,000 0.56 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 14/06/2006 09/06/2006 250,000 1.26 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 15/06/2006 14/06/2006 696,900 1.22 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 15/06/2006 15/06/2006 303,100 1.23 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 16/06/2006 16/06/2006 197,500 1.28 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 23/06/2006 22/06/2006 21,400 1.31 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 23/06/2006 21/06/2006 111,100 1.31 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 26/06/2006 23/06/2006 7,000 1.33 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 27/06/2006 26/06/2006 323,500 1.41 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 28/06/2006 28/06/2006 100,000 1.43 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 25/08/2006 25/08/2006 6,000,000 1.47 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 01/09/2006 01/09/2006 1,766,962 1.09 Buy Amended a previous report
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/09/2006 12/09/2006 289,000 0.56 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/09/2006 11/09/2006 711,000 0.57 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/09/2006 08/09/2006 744,000 0.56 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 28/09/2006 28/09/2006 800,000 0.57 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 29/09/2006 29/09/2006 21,000 0.56 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 04/10/2006 03/10/2006 179,000 0.57 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 06/10/2006 06/10/2006 1,000,000 0.59 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 09/10/2006 06/10/2006 1,000,000 0.58 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 10/10/2006 10/10/2006 1,000,000 0.60 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 13/10/2006 11/10/2006 1,000,000 0.65 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 20/11/2006 17/11/2006 730,000 0.81 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 22/11/2006 20/11/2006 270,000 0.79 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 04/12/2006 01/12/2006 850,000 1.66 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 20/12/2006 19/12/2006 1,000,000 1.38 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 21/12/2006 20/12/2006 333,800 1.35 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 21/12/2006 21/12/2006 531,200 1.35 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 25/12/2006 22/12/2006 135,000 1.38 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 26/12/2006 19/05/2006 100,000 0.89 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 26/12/2006 26/04/2006 200,000 0.00 Receive 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 04/01/2007 03/01/2007 540,000 1.28 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 05/01/2007 05/01/2007 540,000 1.36 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 15/01/2007 15/01/2007 185,000 0.56 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 15/01/2007 12/01/2007 2,200,000 0.56 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 17/01/2007 16/01/2007 615,000 0.59 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 18/01/2007 17/01/2007 14,600 0.56 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 22/01/2007 19/01/2007 700,000 0.57 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 24/01/2007 23/01/2007 20,000 0.57 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 25/01/2007 24/01/2007 734,600 0.63 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 30/01/2007 29/01/2007 1,000,000 0.60 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 08/03/2007 02/03/2007 239,000 1.34 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 09/03/2007 09/03/2007 1,000,000 1.67 Sell Amended a previous report
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 14/03/2007 13/03/2007 900,000 1.44 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 15/03/2007 14/03/2007 100,000 0.40 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 17/04/2007 12/04/2007 75,100 0.55 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 17/04/2007 10/04/2007 500,000 0.56 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 08/06/2007 08/06/2007 1,000,000 1.00 Buy-ESOP 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 08/06/2007 08/06/2007 425,000 0.59 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/06/2007 11/06/2007 75,000 0.58 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 28/06/2007 28/06/2007 1,000,000 0.87 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 02/07/2007 29/06/2007 2,000,000 0.84 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 02/07/2007 02/07/2007 1,000,000 0.80 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 06/07/2007 06/07/2007 1,000,000 0.72 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 11/07/2007 10/07/2007 578,600 0.75 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 13/07/2007 12/07/2007 1,135,000 0.75 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 16/07/2007 13/07/2007 500,000 0.77 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 16/08/2007 15/08/2007 502,000 1.13 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 16/08/2007 16/08/2007 498,000 0.95 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 24/08/2007 24/08/2007 775,100 1.01 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 28/08/2007 27/08/2007 617,000 1.06 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 28/08/2007 27/08/2007 255,000 1.02 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 29/08/2007 28/08/2007 362,000 1.02 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 07/09/2007 06/09/2007 250,000 1.05 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 10/09/2007 07/09/2007 350,000 1.05 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 11/09/2007 10/09/2007 150,000 1.04 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/09/2007 11/09/2007 427,400 1.05 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/09/2007 12/09/2007 726,000 1.05 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 12/03/2008 29/02/2008 500,000 1.39 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 12/03/2008 10/03/2008 659,100 2.43 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 28/03/2008 27/03/2008 322,500 1.30 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 28/04/2008 03/04/2008 2,120,000 1.30 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 23/05/2008 22/05/2008 550,000 2.79 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 02/06/2008 29/05/2008 126,635 2.77 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 16/06/2008 16/06/2008 337,700 1.42 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 17/06/2008 17/06/2008 62,300 1.43 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 18/08/2008 15/08/2008 300,000 1.38 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 18/08/2008 18/08/2008 54,600 2.77 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 19/08/2008 19/08/2008 207,500 2.68 Sell Amended a previous report
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 20/08/2008 20/08/2008 37,900 2.64 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 16/09/2008 15/09/2008 120,000 2.44 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 19/09/2008 17/09/2008 80,000 2.30 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 23/09/2008 22/09/2008 477,284 2.66 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 29/09/2008 26/09/2008 112,100 2.32 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 30/09/2008 29/09/2008 21,000 2.30 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 02/10/2008 01/10/2008 100 2.26 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 10/10/2008 09/10/2008 300,000 0.62 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Warrant 13/10/2008 13/10/2008 500,000 0.42 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 02/12/2008 01/12/2008 60,000 1.87 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 15/12/2008 11/12/2008 4,000,000 1.79 Buy 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 26/12/2008 24/12/2008 420,000 1.68 Sell 
HANS-JORGEN IBSEN  NIELSEN  Reporter Common share 26/12/2008 25/12/2008 399,100 1.69 Sell 

Source Thai SEC, see:  http://capital.sec.or.th/webapp/corp_fin/result59ce.php