.

Bought into this one yesterday, no new shares to be issued when Hongkong tradiing starts shortly,demand from chinese investors likely to drive the sp up.

http://www.hkex.com.hk/tradinfo/tradarrange/currentmonth/e802a_090205.htm

Trading Information
Securities Market
Trading Arrangement News
RCG<00802> - New Listing

Market participants are requested to note that RCG Holdings Limited has
been approved for listing. Trading in its shares will commence at 9:30
a.m. on Tuesday, 10/02/2009 under the following particulars:-

Stock Code Stock Short Name Board Lot
---------- ---------------- ---------
802 RCG 1,000 shares


-----------------------------------

http://www.independent.co.uk/news/business/sharewatch/small-talk-minster-pharmaceuticals-in-race-against-the-clock-1604652.html

Monday, 9 February 2009

RCG logs on in Hong Kong

It has been a good week for shareholders in AIM-listed RCG Holdings, the group that makes biometric security devices.

After it announced last week that it intends to become the first AIM-listed company to get approval to dual-list its shares on the Hong Kong Stock Exchange, which will take place on Tuesday, the stock jumped from 32p to close at 42p on Friday, with the company hailing the extra liquidity the dual listing will bring.

Regardless of the world's economic woes, the group operates in a growth market. As everyone becomes increasingly paranoid about the violation of our personal data, the group's computer security devices – the user scans in his thumb print before being logged on – is likely to prove popular. There are also offerings that keep events secure: on a recent visit to Shanghai, the group's biometric tickets ensured that David Beckham was only greeted by those deemed appropriate.

Raymond Chu, the group's Hong Kong-based chief executive, says the decision to list in Hong Kong is due to the insistence of the company's UK institutional investors, who wanted the stock to gain liquidity. There is another benefit for UK-based shareholders. The company's management is based in Hong Kong and most of its business is in China, east Asia and the Middle East. Having it subject to the strict corporate governance rules imposed by the Hang Seng should add a little comfort for investors.

Will be interesting to see what happens tomorrow and following that.

Quite often nothing will happen (unless results are released at the same time).

The "introductions" take place without much fanfare in Hong Kong, that all starts when results are out, and people can read through the figures when the companies make the headlines on their results day.

So it might be a bit quiet on the trading front for a few days/weeks, until such time as results are out and profile raised.

Or......there could be results tomorrow as well, or some local institutions have been lined up to start with a few buys tomorrow.

Who knows........anything can happen and not worth trying to predict. Happy to hold this one now for a good few months and lets see that the added liquidity does to a company on a PER of times 2, with net cash in the bank.

RNS confirmation

http://www.investegate.co.uk/article.aspx?id=200902091200019985M

RNS Number : 9985M
RCG Holdings Limited
09 February 2009

Listing on The Stock Exchange of Hong Kong Limited

RCG Holdings Limited (AIM:RCG, HKEx:802), an international provider of biometric and RFID products and solution services with a primary focus in the Asia Pacific markets, is pleased to announce that the dealing in the Company's shares on the Main Board of The Stock Exchange of Hong Kong Limited will commence on 10 February 2009 at 9:30am (Hong Kong time).

For further information:

RCG Holdings Limited

Anita Chau, Deputy Chairman & COO

KC Chong, Chief Financial Officer
Tel: + 852 3669 6999
email: kcchong@rcg.tv

Investec Investment Banking
Erik Anderson / Andrew Pinder / Rowena Murray
Tel: +44 (0) 20 7597 5000

Media enquiries:

Abchurch Communications Ltd
Henry Harrison-Topham / Chris Lane
Tel: +44 (0) 20 7398 7708
email: henry.ht@abchurch-group.com

About RCG

RCG is an international provider of biometric and RFID products and solution services with a primary focus in the Asia Pacific markets. The Company aims to develop new applications and revenue streams for global roll-out, particularly in the security applications industry.

Good news we would expect chinese investors to push the sp up quite quickly.

This link should work from sometime tomorrow to find the Hang Seng price.

http://finance.google.com/finance?q=HKG%3A0802

.

Opened in Hong Kong now on the Hang Seng.

Price is around 8 HK$ or around 70p (as its about 11.5 HK$ to the pound presently).

So RCG might therefore open up on AIM as the biggest riser of the day.

You can watch action at this link.

http://markets.ft.com/tearsheets/performance.asp?s=802%3AHKG

.

Went long 25 point yesterday hope your right proselenes.

Given expected EPS of around 20p levels, and with significant net cash in the bank, a price, after results, of around 140p to 150p levels should be about where RCG will trade for now in the current climate.

A PER of around times 7 to times 8 should be ok for Hang Seng.

As and when the next bubble comes, and PER's there go to times 30 levels, well, in a few years time you might see RCG at 900p levels and more. Until then I would suggest around about 150p target for year end 2009.

Nice and strong.

We need some consilidation to get short terms out, and more long terms in.

Next driver will be results, which will bring RCG to the attention of all Hang Seng investors.........and so, hopefully, drive the SP up through the 100p level.

pp if RCG closed at HK$ 9.79 in Hongkong why is the sp in London only 60p when fx rate is 1 = HK$11.48? Shouldn't it be around 85p? Have we got the wrong sp?

Arbitrage..........it will take a few days for the prices to get within 5% of each other.

Quite simply, if the AIM price stays low, and the HK price higher, then people will buy from AIM and sell on HK.

Up until the 17th of Feb you can transfer stock from AIM to HK with no charges incurred.

Even after that, its only a small fee........and this, in time, will make both prices get withing 5% of each other IMO.

Going to take some time, too many people taking profits on AIM presently. So MM's will be buying stock and transferring to sell in HK, for a tasty profit.

PP huge arbitrage opportunity sp now up 22% so far today looks like gap will close around 70p but longer term sp will have to go back to 125p to recognise how cheap these shares are with a PER less than 3.

Now trading at around 250p equivalent on the Hang Seng.

Going to be an exciting blue day on AIM as the AIM price plays catch up :)

Love it......my bottom buy of 32p is looking rather good for a solid gain.

Value this at Hang Seng tech bubble price of 30 times PER, you get 600p :)

Should anyone be wishing to transfer their AIM stock to the Hang Seng in order to sell in Hong Kong, you can free of any charge at the moment, after a couple more days there will be a simple 25 HK$ fee for doing so.

Details are here :

http://www.rcg.tv/html/eng/about/newsroom/investor_news/images/RCG_Letter_to_Shareholders_19_Jan%20v2.pdf

So if the AIM price does not keep up with the Hang Seng price, transfer over and sell over there, there are no restictions on the movement of stock between the two exchanges.

Thanks for that info Proselenes.
I've always thought that this company has some fundamentally good technology so it should recover - well done for getting in so low!

ProselenesI have a holding here can I sell in HK from uk or do I have to transfer 1st
Thanx

You have to transfer, as per the link above and the information on the web site.

It takes roughly 6 working days to go through the process, to have your stock on the Hang Seng and able to sell there.

Arbitrage will happen, however it will take time. Given the "6 working day" lag to move stock to the Hang Seng, the ability to not be able to trade your holdings for 6 days while this process goes through will be a "risk too much" for some people and instiutions.

So I do expect the process of the prices coming within 5% of each to take time, time that is where brokers in London happily buy stock from lazy PI's and short term traders willing to sell, and then move that stock and sell for a significant profit in Hong Kong.

The net effect will be less and less stock on the AIM, and more and more on the Hang Seng, and that will eventually level the prices to within say 5% IMO.

RCG have done this right IMV, by listing as a pure introduction, and allowing the Hang Seng to create demand, that will be filled by AIM selling. That was the big positive when news came that no new shares were being issued.

RCG is in the headlines in Hong Kong for two reasons, one being the big rises, and the second being Tony Chan and the Nina Wang holdings.

This creates some spice, and lots of media coverage.

Again, I say RCG have done the right thing by not issuing the results too soon, they have allowed the listing to happen, allowed the people to get to know RCG more by it being in the headlines, and now, when all eyes are looking, they can within the coming weeks issue results, and that should be the key for a very large dose of investor interest and buying, provided the results and outlook are as good as hoped.

So, for those willing to wait, I think we can be sure that whilst those willing to sell take quick profits, those willing to hold should be rewarded far more, as the AIM prices rises as more and more stock is transfered over to the Hang Seng.

Again, the coming results are the next major key event for me, and one which should generate many multiples of the present buying interest.

Bring it on, fingers crossed :)

Decent volume, over 10m taking in all exchanges. This should clear out the long term sellers on the AIM market who had caused the price to crash down.

There will be lots of noise over RCG, there has to be, simply as its highlighting just how bad the UK AIM market is, telling the whole world there is little liquidity there, there are very few buyers and its quite possibly one of the worst places in the world to have your company listed.

Now, before we all say how bad AIM is, the main reason for this is seen by outsiders are lack of regulatory process, exec's "getting away with murder" and other such nasties that can leave shareholders well and truly in the lurch. AIM was a market for "the unlimited credit times" - just have an idea and raise a few million and nobody cares if the company goes into the ground 12 months after listing. In the "credit crunch" times AIM is a market that just has "leftovers" on the table, and there is no appetite for them, and they are starting to go mouldy.

And before all the "Chinese stock rampers" start on about GNG, TAIH, CHNS and other dross listed on AIM and how they will "all go up" - we have to look more in detail at RCG.

RCG did a very non-AIM thing, they decided to list on the Hang Seng, a market that requires much higher levels of corporate compliance, with much more regulation - all the opposites of what AIM was using to get companies to list.

Many companies on AIM could not list on the Hang Seng, without some very major changes, changes which might expose a few skeletons in cupboards.

So now we are at "noise level high".

When RCG was trading at 150p I called it down, and went long at 32p - thats all very well documented over at TMF etc.

Note that when RCG fell from 150p to 30p there was little "media coverage, nobody cared.

Now that they are moving up fast, more and more is coming in owing to it highlighting just how bad the London AIM is for valuing companies. This does not mean that AIM will value other companies any different in future, thats not the way it works, what it does show is that good companies who are willing to be subjected to high levels of corporate compliance and strict regulation, will find their valuations grealty enhanced by listing on a main exchange.

It may mean the "end is nigh" for AIM, but so be it, you live by the sword and die by it.

Away from AIM and on to RCG, we will likely see lots of "how can this be" kind of posts, we will see lots of posts from short term traders trying to justify their sells, lots of people trying to justify to themselves why they took profits, and in general lots of nonsense written about RCG.

Firstly, owing to the rise they had to issue mandatory "no known reason for the rise" releases, one was released earlier on the Hang Seng, and later one on AIM too. This complete compliance, they have said no known reason apart from HK listing - you cannot exactly say "the company was valued at peanuts by a bunch of tossers in London and now its getting its value back" - can you ?

If we look at the company :

Its growing fast.
It has net cash.
Its paying a divi.
Its listed on an exchange with high levels of corporate governance (HKex that is)

A long term value investor should be happy to pay 15 times historic earnings for that and hold for future growth.

When results come out, earnings should be well over 2HK$ a share, or over 20p a share in UK monies.

Value investors therefore are right to buy this up to around 37HK$, or circa 300p a share.

Nowt wrong with the company, just been listed in the wrong place (AIM) for far too long.

And so ultimately, we come back to UK in general, pumped up house prices on pure credit fantasy, banks with no money but lots of debt, personal debt at well over a trillion pounds and a junior index, the AIM market, that was the playground (or was that payground) of anyone taking advantage of easy credit. Its now left with many companies that cannot list elsewhere, stuck forever in a place said to be "nothing more than a casino" by many around the world, and they will suffer with very low valuations for a very long time to come.

I say now, do not value RCG on what you perceive the AIM would value it as (although until we eliminate some of the leftover UK fundies needing cash urgently their continued selling will keep the value of AIM lower than HK, but only until they are gone), value it as you would a FTSE 250 stock, with the level of earnings it has, with the cash it has, with the divi it pays and with the growth its seeing.

As it stands now, its cheap on the Hang Seng at 25HK$, and very very very cheap on AIM, and lets get results out to highlight this and bring in more and more long term value investors. The transition has started, its going to take time, but it will happen, and before too long the majority of the companies stock will be on the Hang Seng, and not AIM.........IMV.

All IMO, DYOR etc.. !!