The yaer ahead

Hi All.

For what it is worth, here are some thoughts.

The company appears to clearing the decks for the new Chairman (Hooray!!!!). VMT is in an interesting position and this year might be the year when they finally get it all together. Part of getting it together is an overhaul of the board. As a first step, a new chairman is desperately needed to help the company 'straighten up'.  Whilst the cynic in me ponders the possibility that Charles won't follow thru and appoint a really strong chairman capable of bringing some discipline to the enterprise, I will be delighted if he proves me wrong.

There has been a lot of negativity about the stock recently. Understandably. That said, I think there are a number of significant positives but it is going to take some determined and well co-ordinated strategic implementation. Hopefully the new chairman can provide the focus and 'mongrel' necessary. Shareholders also need to exhibit a bit of 'mongrel' when it comes to the voting at the AGM.

But let's start with the 'positives'.

The company's stated objective of focusiing on higher margin and/or international product makes sense.

In that regard, there are 2 absolute priorities in the short to mid term for the new Chairman (let's call him or her 'X').

Loop and Soco provide two interesting exemplars of what's possible.

Loop is a wonderfull vehicle for the marketing of VMT fully 'owned' designed and manufactured product. Soco provides a great opportunity for VMT to distribute and possibly make product under licence.

Loop is about to burst onto the worldwide stage and with it, VMT production could surge.

Loop has made some fantastic strategic advances and these include:
1. Launching in Bieruit (http://loopshareltd.com/loopshare-launches-shared-fleet-of-electric-scooters-in-beirut/)
2. Getting approval in Canada
3. Proving itself in Japan and providing a sprinboard into that and other Asian markets (http://loopshareltd.com/loop-japan-receiving-subsidy-from-jetro/). Could be HUGE!
4. Entering into a $10m deal with a Chinese partner to launch in China. If they sign off on this it will be HUGE (http://loopshareltd.com/loop-oe-tech-announce-signing-binding-loi/).

So priority one for X.... Review the agreement with Loop make sure its airtight and that the numbers are correct. Then get on a plane with Charles and go and visit Anwar, get drunk with him and make nice .

Soco (and its scooter partner Puma) are pretty exciting offerings but probbaly suffer from production bottlenecks. Soco appears to have taken all this time to fulfill its Chinese orders and is only now able to feed what appears to be a big international demand through Vmotos distributors.

Vmoto UK has recently announced that product will at last be availbale in May (now).

If my reading on this is correct then Vmoto is really well positioned to do a deal whereby they manufacture the product under licence and complement the existing arrangement of distributing Soco under the (Trademarked) Vmoto Soco or VEEMs badging internationally.

Get to it X and/or get Charles focused.

I could go on but success in those two projects would be enough to ensure a bumper second half and lock in a pretty favourable future.

It would be great too if something could be done about seemingly inconsistent and 'retro-fitted' strategies surrounding the Chinese domestic market. Blah blah.

All up though, VMT is well positioned to 'take off' soon if their efforts are harnessed and used effectively.

Now for the less pleasant stuff for X.

Discipline, whether it be in relation to strategy or corporate culture, needs to enforced.

A good place to start is at the top, ie at board level.  

Priority one.

Get rid of KaiJian Chen from the board. Immediately. I have no idea what his competency levels are but you have got to turn upto board meetings to earn your keep. 1 out of 6 last year (really 7. There was not a quorum at last year's AGM...GRRRRR!). His attendance at previous years' directors meetings was also appalling (2 out of 9). And as for approving the granting of shares in the AGM vote........

There are other issues with the board structure which I'll keep to myself for the time being but action regards KaiJian would be a good start.

Priority two. More effective monitoring and reviewing of performace overall.

Why bother having performance indicators and then not conduct or not comment on the performance review? (See Item 1.6 in the Corproate Governance Statement). Awarding shares to staff and management for 'effort'? (See Secondary Trading Norice Dec 2)

Seriously?


The shareholders should send a shot across the bow when it comes to voting on the remuneration report.

In any case, I think that VMT may have arrived at a good strategic place and if they can execute well then happy days.

I actually think the company is also placed well for a really solid financial rebound and hope for a significant NPAT if /when the Loop, Soco sales and other related activity start going through and that the figure will be supplemented by a upswing in the Plant and Buildings valuations. An NPAT of $5 - 6m?

One last thing.......................how about a presentation at the AGM that clearly articulates the strategic path and rationale ove the next couple of years? Pretty please? If you do, I will go 'LOOPy'

Good Luck All.