I´ve been a stock owner for about 4 yrs accumulating stock over time. I invest out of Sweden meaning that my written english might have some limitations.... please excuse me for that.
I´ve been following the chinese markets for many yrs, reading the chinese 5 yr plan in its relevant parts to SIAF and I feel that I have a pretty good understanding about the local market, in general the "evolution" in china and more specific the products SIAF produce. I´ve met with Salomon on a few occasions in Sweden and I have also been a member of the Jordanfund. I´m a entrepreneur myself running mostly small companies and I have a law school education among other things.
Just so you know a little bit where I´m coming from.
If I look at the business model I feel that SIAF is doing most things right except of course in the way they been handling the financing of their growth, and more over I never liked the idea of starting restaurants. I still dont by the way.
I recognize some of the people behind the new investor, I dont know them personally but I know of them. Fredrik Danielssons father was the youngest stock company CEO ever in Sweden when he turned CEO of Pharmacia, which was a big international pharmaceutical company with its roots in the town of Uppsala, Sweden (also my hometown). Among other accomplishments he turned and marketed Healon into a world leading product in its area. I have only good things to say about him, being a driven entreprenour for many yrs since he left his job at Pharmacia. The father has been a very credible person in Sweden for many yrs. I dont have as much information about the son (Fredrik born 1974) other then what you all can read about his financial merits, but I feel very good about his solid family backround. I feel it tells you a lot about a person. Since very much of this business- and stockprice case now is about being trustworthy. I think nobody on this board would say anything negative about producing SIAF´s products in China, in that sense its a nobrainer.
In my view its all about trust and credibility to be able to keep going forward in a way that all of the owners make money through an increased PPS. The only way forward in my opinion is through trust, trust in the people running the company, trust in SIAF´s ability to realize its plans, for that they need among other things credibility to be able to finance their plans and get reasonable meaning bigger stakes in their JV-projects.
I feel that this financing deal is truly super for the company for a number of reasons. Its obviously a superdeal for the investor, being able to buy the stock for a dollar in 5, 1/2 yrs. That should not be considered as a problem for us shareholder though. We can still buy it for halv that price in the market place. This new investor that has people with extensive financial background and investorcontacts will now provide SIAF with that whole spectra of abilities that comes together with their engagement. This will be the turnaround in all the respects that involves the financing ability according to my view. Wy.....because now you have a trustworthy partner going first showing the other investors the way.... They been looking at this case for almost 2 yrs and they came through...
They have trust in their sector and thats whats counts. They have done an extensive due diligence, this will of course be enough or at least mean a lot for the people that have their trust.....
Believe when I say that I´m truly convinced that their sole purpose with this investment is to turn this into a super multiplier. Now when the blade is of the troat, its obvious that coming investors will not have the same terms. Remember 10,5 percent incremental interest for 5,5 yrs only adds up to 73,4 percent increase of the nominal amount. They are actually converting for about 150 percent of the average stockprice in the past weeks (arround 0,4 pps). This is a signal that they really know what is going to happen with the stockprice when the financing is in place. If you look at equity per share it looks like a better deal of course. But hey its an opportunity open to all of us, meaning to buy a dollar for a quarter...
Now we have a competent investor that can through its channels provide necessary financing going forward to keep up the speed on the megafarm project, make sure SIAF can increase its stakes in the various JV´s - meaning multiplied net income to SIAF, and through this in a fast manner get a cash flow that harmonizes with the EPS. That also gives us a super opportunity to increase the coming dividends so that we owners can stay in this for the long run. Imagine our position if the credit position gave us the opportunity to increase dividend to 50 percent of EPS. That would give us a net return of 50 percent annually and increasing. That would totally kill the sale pressure on this stock..... With sufficient financing this is not an utopia, its on the other hand very much realistic and a much better way forward according to me in creating shareholder value. Real shareholder value that you can actually use....
Its all about financing now.... and for that reason I´m very happy with this new investor. I now have a totally different level of trust in the company to create shareholder value for all.
Happy weekend to you fellow owners of SIAF!
