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Asian Bamboo AG (fka 5AB) RSS Feed

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Asian Bamboo

Asian Bamboo Group is a Chinese world-leading producer of Moso bamboo trees and organic bamboo shoots.

The company sells bamboo trees mainly to the domestic market as a sustainable alternative to wood. These bamboo trees are mainly used for scaffolding and decoration or as input material for flooring, pulp and paper, and furniture production.
The company's flourishing organic bamboo shoots are sold fresh in agricultural markets or processed for domestic distribution or export to the Japanese market.  As organic products they reflect the growing global trend for organic food.

The company currently owns long-term leasing rights for 28 bamboo plantations with a total size of 29,629 ha in Fujian Province, the province with the highest concentration
of Moso bamboo resources in China.
Asian Bamboo Group's registered office is located in Hamburg, Germany and the Company is listed on the Prime Standard of the Frankfurt Stock Exchange under the ticker symbol “5AB”.
For more information about Asian Bamboo, please visit our website at:
www.asian-bamboo.com    or     www.asian-bamboo.de

ASIAN BAMBOO AT A GLANCE

OPERATIONAL DATA

 
In ’000 EUR                  Q3 2009           Q3 2008           Change Q1-Q3 2009      Q1-Q3 2008      Change
 
Revenue                       14,946              13,315              12%     40,724              31,467              29%
Cost of sales                ( 8,497 )            ( 6,761 )             26%    ( 21,683 )          ( 15,252 )          42%
Gross profit                  6,449                6,554                -2%      19,041              16,215              17%
Gross profit margin         43%                  49%                             47%                  52%
Gain arising from changes in fair value less estimated point-of-sale costs of biological assets
–                      –                                  13,020             
Finance net                   1,369                174                  687%    5,032                514                  879%
Income tax                     760                  241                  215%    ( 3,348 )           ( 3,394 )             –
Profit for the period        6,554                6,202                6%       29,197              10,822              170%
Adjusted net profit*        6,474                6,202                4%       19,432              14,518              34%
Adjusted net profit
margin*                        43%                    47%                             48%                 46%
 
EPS (EUR)                   0.52 †               0.49 ‡                5%       2.30 §               0.85 ‡              171%
Adjusted net profit per share (EUR)*
0.51 †               0.49 ‡                4%       1.53 §               1.14 ‡               34%
 
* Adjusted for changes in the fair value of biological assets and taxes thereon
† Computed on the basis of 12,653,270 shares
‡ Computed on the basis of 12,750,000 shares
§ Computed on the basis of 12,708,320 shares

The product : Moso bamboo ;

Moso bamboo is one of the fastest growing types of bamboo. It grows from a shoot into a 20 meters high bamboo tree within even 2 months ! Asian Bamboo AG focuses on Moso Bamboo as it believes the quality of Moso bamboo is higher than other species due to its rapid growth and its suitability for a wide range of uses.

The plantations are 100 % organic as the bamboo leaves function as a natural fertiliser.  Bamboo cultivation and production methods adhere to strict international standards, such as the Japanese Agricultural Standard of Organic Agriculture products and the US National Organic Program Standard.  Higher margins can be realized given that they can charge a premium based on the characteristic of their products as organic goods.

AB is able to generate a high return from their plantations, as they are harvesting both winter shoots, spring shoots and bamboo trees every year. Winter and spring shoots are harvested annually, whereas the bamboo trees are cut in their fifth or sixth year (in the second or third year after the quality of the trees has improved)    Hence, the turnover rate for the entire plantation is 3 years. 

TURNOVER RATE  EUR % PRODUCT MIX K EUR % HARVESTING CYCLE    
1 HA      YEAR 2008     1 HALF 2009           
                 
DRIED BAMBOO 0 0% DRIED BAMBOO 1,467 6%      
SHOOTS     SHOOTS          
                 
BAMBOO 921 39% BAMBOO 933 4% AUGUST TO DECEMBER    
TREES     TREES          
                 
WINTER BAMBOO 329 14% WINTER BAMBOO 5,115 20% NOVEMBER TO FEBRUARY    
SHOOTS     SHOOTS          
                 
SPRING BAMBOO 495 21% SPRING BAMBOO 9,815 38% MARCH AND APRIL    
SHOOTS     SHOOTS          
                 
PROCESSED 641 27% PROCESSED 8,448 33%      
BAMBOO SHOOTS     BAMBOO SHOOTS          
  2,386 100%   25,778 100%      

Efficient and well-run plantations are an intricate business which entails – among other concerns – the right selection of sites in the right climatic regions, soil quality, plantation preparation and management. The percentage felled each year is carefully calculated taking into account the age, structure and density of plantations. 

Great flexibility ; AB' specialists evaluating the optimal harvesting mix where also take market trends and demand into consideration.

Asian Bamboo AG’s industry experience and expertise in plantation cultivation gives the company a significant advantage, particularly with regard to newly acquired plantations.

Plantation Growth & Management ;

The plantations are the most important actif on the balance sheet, worth on 06/30/2009 126 million €uro. (total assets 192 mill. €)

Their bamboo plantations are the foundation of Asian bamboo's business.  Increasing the size of mature plantations is the single most important factor influencing turnover and profit growth, because turnover and adjusted net profit numbers are closely correlated to the total size of mature plantations.Note ; it tokes 3 tot 6 years of cultivation to turn an immature plantation into a mature one.  Most of the immature plantations will turn mature in 2009, 2010 and 2011 ! (see tabel below)

AB has been rearranging plantation leases from yearly payments to once only up-front payments for a lease period of 20 years. As such, these leases are accounted for as long-term prepayments in the balance sheet. The long-term prepayments are financially amortised over the leasing term. 

They make substantial savings on these prepayments compared to paying the lease fees on a yearly basis and these savings equal a discount rate of 17%. 

This working method of prepayments is a uniqum in the sector of bamboo cultivating.

The size of its plantation area, along with its ideal location, provides Asian Bamboo AG with the advantages of economies of scale over other smaller bamboo providers. As an established business with a strong track record the company also holds a strong sourcing position – an advantage over new competitors when engaging in lengthy negotiations over access to suitable land. 

latest news :

Asian Bamboo AG secures another plantation lease agreement

Hamburg, 22 September, 2009 –

http://www.asian-bamboo.de/en/news/index_090922.html

PLANTATIONS

 year

mature

increase

immature

total 

new leases *

size

 

ha

%

ha

ha

ha

 

 

 

 

 

 

 

 

31 dec 08

18.367

 

8.262

26.629

-

 

31 dec 09

22.229

21

7.400

29.629

3.000

 (acquired 22 sept 09)

expected

31 dec 10

29.629

33

7.000

36.629

7.000

expected

31 dec 11

36.629

24

TBC

36.629

TBC

 

31 dec 12

? **

 

? **

? **

? **

 

31 dec 13

? **

 

? **

? **

? **

 management goal

?

70.000

 

 

 

 

 
* New plantation leases generally generate limited or no output the first year of the lease as some preparation work needs to
be carried out before harvesting can begin. From an accounting point of view, new leases are therefore generally classified as
immature plantations for the first year.  
** the plans starting 2011 and further will be explained during the year 2009 
 
 

Integrated Business Model ;

Asian Bamboo AG currently sells most of its bamboo trees to trading companies, mainly within China, who sell the material on primarily to manufacturers in industries such as flooring, furniture, construction and paper. 

On 18 February 2009 - Asian Bamboo AG announced a strategic partnership with Shaowu Zhongzhu Pulp and Paper Co. Ltd. ("Shaowu Zhongzhu").Shaowu Zhongzhu is one of the leading bamboo based pulp and paper producers in China with an annual production capacity of around 100,000 tons. The company is located in Shaowu city in Fujian province, close to many of Asian Bamboo's plantations.  As part of the strategic partnership, Asian Bamboo will be the prime supplier of bamboo trees used as raw material for the production of the company's pulp and paper.

The company’s long term aim is to cover additional stages of the value chain for bamboo trees, such as building its own factory to produce bamboo flooring directly.

 
                               
                               
                    INDUSTRY            
                                
                               
                      à Paper & pulp    
        à Businesses of main intrest        
                      à Flooring      
    Bamboo trees                      
                      à Construction    
          à Other key businesses          
                      à Furniture    
                               
                               
                AGRICULTURE            
                               
    à                       
          à Processing line    à Export to Japan    
    Spring shoots    
( Processed shoots )
à Domestic market     
    Wintershoots                       
          à Sold fresh     à Wholesale markets  
                               
                               
 
 

A steady increase in demand for wood in China, a shortage of domestic wood supply, the government’s support for bamboo cultivation, the availability of bamboo as a renewable resource in China – together, these factors put Asian Bamboo AG in a strong position. 

See publications on their website, quarterly / annual reports ;

It's worth looking at, a strongly advice ;

http://www.asian-bamboo.de/en/investor_relations/publikationen.html

 

 

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