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No. of Recommendations: 4
Hi Mekong,

Thanks for the update on the quarterly call.

Let's assume for a moment that there is no go-private offer, is it correct to say that EPS & EPS growth are two of the metrics used to trigger the extra shares to MS, which in turn dilutes existing shareholders in 2013/2014 ?

So then is it correct that YONG management has 3 to 4 tools to squeeze shareholders to take 6.60.
(1) sandbag the expenses, dragging down EPS & EPS growth to triger a (i)lower P/E multiple on (ii)lower earnings ( double jeporady already it seems)
(2) Ensure future triggering of the MS payout & dilute the shares and so reduce the Net Present Value of existing shares further ?
(3) Continue to accumulate unrecognized earnings to further reduce reported earnings (in effect maximising the payment cycle)

This accounting manipulation cannot pushout the reported profitability of YONG forever but in the next 6 months it looks to me like our tools are very limited and theirs are very strong or have I missed something ?

I don't see how the 'real' earnings power of the comapny would force it's way through the accounting manouevers until Q3/Q4 of 2013 at the earliest, which will be way past a takeover date.

Your thoughs on this appreciated.
James
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