Unionmet

Unionmet: 3Q13 net loss of US$404k more than doubled from a loss of US$185k the previous corresponding period, mainly due to the lack of other income from general trading (-91% y/y), higher staff costs and general expenses (+21%). This was despite revenue improving to US$8.3m (+20.6%) resulting from a 16.7% improvement in the ASPs of indium to Rmb3500/kg, as the group was not able to cover its operating overheads. Notably, Unionmet reported an unaudited cash position of US$28.6m and no debt, which translates to $0.058/share, compared to the last closing price of $0.067. Less than three months ago (23 Jul), Chairman Zeng Fuzu sold a 29% stake to Asia Capital Group (ACG) at $0.14/share through a married share trade, which led to an internal restructuring exercise in the group over the quarter. Unionmet intends to consolidate its trading and smelting business of non-ferrous metals and related by-products in China to create synergies among its subsidiaries. Moreover, ACG's stake is just shy of the 30% level that will trigger a mandatory general offer for the company. Should such a scenario materialize within six months of the married deal, SGX rules mandate that the offer price will have to be tabled at a price not less than the $0.14 per share that ACG recently acquired for.