No surprises there, textile operations made another loss, only to be saved by their electricity generation. They will probably use their recently sold asset to cover the losses in the annual result. Currently there are still no signs of pickup in this company, or the entire industry. Texhong’s interim result was really good among the bad. Of course, they have small size advantage of being nimble, and can expand overseas or strategically and quickly cater for changing trends. I am not sure what the Weiqiao group wants to do with their textile business. Transform it to another industry? Sell their assets and focus on their steel operations? Sit around by selling assets to sustain losses? Nonetheless, the really long term outlook for the cotton textile industry is still quite bright. The demand from emerging countries is going to be phenomenal – look at the rising middle class, and rural transformations. I am quite confident about rising commodity prices in the next decade purely due to supply and demand; not to mention money printing globally.
Would I will buy more of 2698? Yes I would. Below $2.5 is very attractive. Is it time yet? I don’t know, but for my situation right now, not yet. I will need to wait for some of my other companies to reach an attractive selling price before I will consider putting more into 2698.
What I do is just capital allocation. This very idea gives me shivers down my spine, and I love it, I can do this for another 50 years.