Friday, September 3, 2010


I bought into MiiF a few months ago. My average purchase price of MiiF is 0.509. I am due to receive my first dividend this month.

The reason I purchased this stock is very simple - I do not want to lose money but is also very conscious of the volatility recently. Remember, money in the bank doesn't earn anything. I remember Warren Buffet who says the first rule of investing is "Do not lose money". The second rule is "Remember the first rule".

For 1H10, MIIF announced a distribution of 1.5 cents per share which will be paid on Sept 9. The fund has no borrowings at the corporate level, cash of 36 cents per share, and NAV is 80 cents. Dividends for 2H10 are expected to be maintained.

They have a 38% stake in Changshu Xinghua Port (Jiangsu), an 81% interest in Hua Nan Expressway in Guangdong, 20% stake in Taiwan Broadband Communications (TBC) and a 100% stake in Miaoli Wind, a wind farm in Taiwan. They have divested all the non-Asian assets.This means I am only paying 14.09 cents for the three major Asian assets (Miaoli Wind is assigned a zero asset value in the B/S - I think a mistake they made in the past with this acquisition). The book value for the three Asian assets is 44cents/shr.

MiiF track record before I made my purchase was spotty partly due to timing (2008/2009 crisis) and partly management lack focus and strategy. But, I am buying at an average price of 0.509 when the IPO price is $1. There are no rights or dilution in between my purchase and IPO. However, I could sense from recent statements that management have realise their mistakes into making too many minority stake purchases all over the globe with a small Fund.

I also check the composition of the board. I think I have quite a bit of buffer on this one.

I must admit that I did not check on the debt status of the underlying assets though. Sometimes, it is possible for the Fund to be debt free but the underlying assets may be overloaded with debt.

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