Sino Agro Food Inc (fka SIAF)

[Carog]

Carog, there is something I don't quite understand, after reporting that EPS growth over the past year was slightly below zero and cash flow numbers (free cash) stunk how come the share price rose leading up to and following earnings report?

Well I would say its because that the biggest reason now for the shareprice development isn´t EPS growth its about credibility growth. Topline had a great growth and the lack of growth in EPS was due to old dilution sins... Since september last year when ECAP came into the company we have clearly seen a new path (focused on transforming operational success inte shareholder value) of the company and at the same time the dilution has stopped. All of these actions lately together with top tier advisors prepared to put their name on the line is just making it a totally different ballgame. Out of a credibility perspective its obvious that some great DD efforts has been made by Arctic Securities for example, this of course increases credibility in the market place.

We all know that the growth story is intact even looking at EPS, its just a matter of coming to a point where cash flow combined with the ability to finance themselves in sound way, gives the company the opportunity to capitalize on the potential at hand. When the company attends to that potential without killing the stock through dilution thats when we have a gamechanger. With all the actions we been able to see we have totally new fundamentals for the valuation of the company going forward and this is what the market realizes and thats why the PPS is rising.

We are still below p/e 2 for 2015 and maybe a more fair number should be p/e 8-10 at this time.
When listings and additional financials are in place the p/e 12-15 should be in the pipe.

When efforts to optimize shareholder M/A´s and spin offs have been done we are looking at a premium valuation given our profile, world leading, organic, sustainable, high growth etc....
But I dont even want to go there since it just make the share price look ridiculus today....;)

So in short thats my opinion why the EPS growth just wasn´t that important in 2014.