Peter A. Delgado II

Peter A. Delgado II
Contributor since: 2007
Company: Threshold Capital Corp
A great piece - a long term investor is paying less than 5 times profits for a company with explosive revenue and earnings growth!
Was very dissapointing - if you really look at it - he announced his "retirement" while he was still on the plane returning to Singapore.
sold out of my position before it was halted.
Nice write - up! Just wait until they complete the clawback from the previous Chinese management; shares outstanding will decrease substantially and greatly improve the bottom line results.
There have never been any accounting issues at DGW.
DGW's Chairman, was also the Chairman of DYP. He was never the CEO of DYP.
DGW taken public by Piper Jaffray in June 2009 at US$16 per ADS.The stock then traded up to US$42 per share in late December 2009. The Company completed a secondary offering at US$29.50 (additional 3,545,000 ADS – 1,090,000 ordinary shares) on January 28, 2010.
The Company experienced a severe price correction on September 13, 2010. Duoyuan Global Water is led by its Chairman and founder, Mr. Wenhua Guo. Mr. Guo is a true Chinese entrepreneur having also founded (and the Chairman) of Duoyuan Printing Inc., another publicly reporting company that trades on the New York Stock Exchange (NYSE:DYP). On September 13, 2010, Duoyuan Printing announced the firing of its auditor, Deloitte Touche Tohmatsu and the resignation of its CEO and CFO. Duoyuan Printing dropped from US$6.5 to $3.0 per share on the news. As Mr. Guo is also the Chairman of Duoyuan Global Water, investors took his Chairmanship of both companies as a negative; and as a result, DGW dropped from over US$20 to $12.0. At the end of September, DGW announced the engagement of the prestigious law firm Skadden, Arps, Slate, Meagher & Flom LLP to conduct a third party review in order to insure that the Company’s corporate and accounting standards are in compliance of a New York Stock Exchange listed company.
I expect to see the Skadden report sometime in April, after this month's report.
Investors should also be aware that a Member of the Board - Ms. Joan Larrea works for the Global Environment Fund (Chevy Chase, MD - One of her in house funds filed a 13G with the SEC - Feb 14, 2011 stating that they hold a 9% stake in the Company; this Fund is named GEEMF Holdings MU. Singing this 13G filing is H. Jeffrey Leonard, the President, CEO, and Founding Partner of the Global Environment Fund.
I will be visitng DGW in May of this year.
Last - Randy is one of a select few who has taken the time to do some great work on DGW. We both owned (and continue) to also own China Yuchai International (NYSE:CYD) which went from $4 to $32 the past two years. For the record - Cummins Engine (NYSE:CMI) earned $5.28 for 2010 on $13.23 Billion in revenue. China Yuchai (NYSE:CYD) earned $4.58 in 2010 on $2.5 Billion. Cummins is currently trading at $98.77 while China Yuchai is trading only at $25.60. Go figure....
I agree - I can be reached at
Nice post - it is refreshing to note that someone else is doing the work! I think CYI will report approx $1.00 in EPS for Q1 2010; and I am estimating $3.25 for this year.
One can ceratinly speculate at this point that once HLA sells or lists its Xinfei unit (refrigerators & freezers), they will purchase more CYI in the open market to raise their stake. To "mirror" your thought above - "what do they know..that we don't?"
Simply is very strong and the Company will have its best year since inception in 1951.
The "2,0000 units" from above is most definitely a misprint; so you are reading it incorrectly. Historically (and seasonally) Q2 is the weakest, but for 2007, Q2 tracked very close to Q1. The new light-duty 4F engine, which has higher margins than the regular light-duty line, sold very well and continues to gain acceptance/market share. Overall, keep an eye out for Weichai Power's earnings; while Weichai mainly sells heavy-duty engines, its results are usually comparable with Yuchai's overall strength.
On another note, investors should take a look at Yuchai's website today for some interesting news. The past 2 days saw some interesting developments coming out of Yulin for Guangxi Yuchai Machinery Co.
China Development Bank will act as both lender and financial adviser to Yuchai. The agreement was signed on August 1.
In particular, the bank will help in two areas:
1. Medium and long term planning.
2. Financing the projects, advising Yuchai merger & acquisition, reorganization.
Link and rough translation:;langpair=zh%7Cen&...
And from the Yuchai website - the loan to be used specifically for M&A and Reorganization;langpair=zh%7Cen&...
According to the above rough translation, CDB will provide Yuchai with a Rmb 4 billion. So…let’s see here…Rmb 4 billion equals US$ 528,227,137.00
Hmmmmm....Not exactly a small amount....I wonder what the Chairman, Mr. Yan Ping, has in store for these funds?
Time will tell.....
Good evening all.
I thought it might be prudent to comment on the recent news/price action of CYI. First, in regards to the news on July 24, 2007: we initially learned of this delayed filing back on July 2, 2007 - the main point of the news release on the 24th was to inform shareholders that, according to relevant SEC/NYSE rules, the company could be subject to enforcement action, suspension, or de-listing of its shares. For those that have been involved in CYI for more than six months, please remember we have seen this scenario the past two years as well. CYI was late in filing their 2004 Annual report and filed it on July 14, 2005. CYI was late in filing their 2005 Annual report and filed it with the SEC on August 7, 2006.
Now, if I may, comment on the overall delay in KPMG Singapore completing its annual review: We all know CYI changed independent auditors on December 12, 2006 (from KPMG Hong Kong to KPMG Singapore). Investors should be aware that KPMG cannot just "send over the CYI file" from the Hong Kong office to the Singapore office. The new office (KPMG Singapore) must begin from scratch from January 1, 2006 to conduct its formal review. The personnel now working on CYI for KPMG Singapore ARE NOT ALLOWED to interact with the previous auditors of KPMG Hong Kong. If they did...the annual audit certainly would not be "independent." This is the primary reason for the extended delay. Now...should CYI executive management have waited until after December 31, 2006 to change independent auditors? For all investors concerned...ABSOLUTELY... Should CYI have notified both offices (earlier) that a change would be taking place and the new office could have begun its work...YES INDEED!!
On a side note here I should add that the Chinese executive management team (Mr. Yan Ping) would never allow a de-listing. CYI was the FIRST (or second) Chinese company to list on the US financial exchanges back in December 1994. The Chinese (State Holding Company) consider this listing to be a mark of prestige and honor in China; and they currently do not appreciate (CYI management's) continued delays. Again, please remember the State Holding Company/Coomber/Yulin City Municipal Government is the second largest holder of CYI with an 18% stake - 6,708,180 million shares.
There have been numerous questions about the valuation of CYI's "investments" (as Mr. Philip Ting now classifies them) Thakral and HLG Enterprises. I spoke with the financial controller of Hong Leong Asia (Mr. Ho Mang Chan) last evening to confirm these numbers (they are also found in HLA's March financial report):
CYI owns 36.7% stake in Thakral (not including convertible bonds - I asked Mang Chan as to why they are not included and he commented that only the ordinary shares are used in HLA's financials) which equals 898,990,352 shares. Last night (day) trading price (for these calculations) was S$0.18. This equals S$161,818,263.4 Converting to US$ this equals US$107,084,972.00
CYI owns 45.42% stake in HLG Enterprises which equals 387,614,839 shares. Once again, last night (day) trading price (for these calculations) was S$0.55. This equals S$213,188,161.5 Converting to US$ this equals US$141,081,066.00
Together these 2 stakes are worth (in US$) 248,166,038.00 which breaks down to US$ 6.66
Now using the cash on the balance sheet (from the unaudited annual report on February 27, 2007) of 95,526,000.00 this breaks down to US$ 2.50
Cash and investment stakes now equal US$9.16 Today's closing price of CYI: US$ 9.83
How would you like to purchase a controlling interest in China's largest independent diesel engine maker for US$0.67? As I mentioned in my above shareholder activist letter..."Hello?...any private equity firm out there listening? Any interest in a tangible and profitable business in the fastest growing GDP country on the globe?....Hello...Carl... Pincus...Apollo...anybody listening?"
So how is Yuchai's business performing so far in 2007? As CYI (Singapore based management) still continues its charade of delays, we have our colleagues at to thank for Yuchai's outstanding first half 2007 results:;t=CYD&PHPSESS...
And wouldn't you know it...these results were released the same day that CYI released its 6-K.
Now here's a question for all to ponder....has Yuchai's diesel engine business declined 18% since July 24, 2007? The markets truly are inefficient!!
Today's News
Good morning all. I wanted to bring to everyone's attention today's news - the amendment to the Reorganization Agreement. Today's announcement, I strongly believe, is a huge win for shareholders. Specifically Part 5A, iii - the payment of US$20 million by Yuchai to CYI (to give up the golden/special share) has been waived by CYI (Singapore based mgmt). Also, I find Part 11 A&B very positive - "this Agreement shall cease and determine upon either the dissolution of Yuchai or a public offer made by Yuchai". As Mr. Yan Ping has already announced his intention to return to China's domestic A market by the end of 2008 - this is great news! Given the above, can we speculate to say Singapore management has "blinked"? Maybe.....I guess time will tell; I think they (HLA) might be conceeding that they should begin to be a value added partner in this endeavor!
It is clear now that Mr. Yan Ping and his team have been making all of the right moves, both financially and structurally (for Yuchai); look at the last 2 pages of the news announcement and see the progress he has made.
While some may be dissapointed that the previously announced spin-off/restructuring will not be effected; this notion has been known for some time. I believe Mr. Yan Ping continues to have a goal of growing the business and specifically resolve the "golden/special share" issue. See this story (& translation);langpair=zh%7Cen&...
I would also like to alert shareholders to another recent news story:
A rough translation here - "Guangxi auto industrywide profits for the first 5 months of 2007 were up Rmb 340 million to a total of Rmb 970 million, according to the Guangxi Provincial Statistics Bureau. The strong profit growth came from two companies: General Motors-Wuling joint venture and Yuchai.
Reasons for the growth: New products, corporate structural changes, and measure taken related to energy consumption conservation.
I am looking forward to the conference call to be held on July 9, 2007 at 10am NY time. It should be exciting and I intend to ask many questions!
Thanks "ChBobll". And with regard to David's question above...approximately a month ago I was speaking with an analyst from CS First Boston Asia who covered HLA (he name is Bradley Burch and he recently retired from the sell-side of the business) and he point blank asked me, "At what price would you be willing to accept a general offer for your CYI shares?" And I replied "the low to mid 20's".
I would like to add that I do tip my hat and commend HLA for making the timely and savy investments in Thakral and HLG at those very cheap prices; however, what does this do for me as a shareholder of CYI? At this point, not much. Again those stakes are now approximately worth US$ 6.00.
The golden share held by HLA - once again a very important point. Among other things, it ALLOWS HLA to CONSOLIDATE CYI's financials INTO HLA's reported results (in Singapore). So, ask yourself, what if HLA sold/gave up the golden share? Answer: HLA would NOT BE ABLE to consolidate all of CYI's financials into HLA.
One last issue HLA owns 22% of CYI stock, they do not make/lose any money in its price fluctuations. HLA takes management fees (much to my dismay) from CYI and only takes dividends when Yuchai Group declares them.
I hope the above clears up some issues for some.
Good morning David. Thanks for your comments. As we both know, there is NO research coverage for this company and it is a small, undiscovered "gem" and a fantastic way to capitalize on China's GDP growth. One of the reason's that I wrote the "activist" letter was to encourage HLA/Singapore based management to drastically improve their efforts, or step aside and allow a REAL partner (like private equity/investment bank) to come in and help their main operating subsidiary, Guangxi Yuchai Machinery Company Limited grow their top and bottom lines.
In terms of "upside, " I do not like to use or rely on price targets, but I think we would all agree that paying approximately $US 2.00 for China's largest independent diesel engine maker is extremely cheap. I anxiously await the Q1 2007 and 2006 audited annual report.