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Hi Minding, They don't need financing at this stage per their presentation until the new production has been ramped up to full capacity within 3 years in Phase 1. Their revenue projection is >$150 million USD in phase 1. In phase 2, they will double that revenue. That is about 3 years' later. They mentioned that they might need financing for their phase 2 and protential acquisitions. Fiscal Q1 earning report will be out next month.
I see no one has posted the 10K for BFTI. Here's the link: http://biz.yahoo.com/e/100928/bfti.ob10-k.html
"The net cash obtained from our financing activities in the fiscal year ended June 30, 2010 was approximately $5.6 million less than the amount used in investment activities for the same period." However it seems certain that their future involves incurring more debt at this stage (Phase I Changxing Facility and looking forward to construction of Phase II Changxing Facility).
The selectivity of information provided is a concern to me. Where's the balance sheet, for example?
In all, I think there's a lot of time before this will move. NL?
Thanks very much for remembering my interest, Northern. Sure looks fine. Except for the reaction. No price or volume response to the news. One hundred shares on Friday with 29M shares outstanding? I've had a few orders sitting there for weeks now. I figure when my orders get filled (500 sh per) it will be an indication this is ready to move.
Minding
BFTI presentation:
BFTI presentation is listed below.
New prodcution facility will be ramped up to full operation in 3 years with >$150 million USD revenue annually at full operation in Phase 1. 5 times of increase in revenue in 3 years. Phase 2 expansion will increase the capacity further.
Shifted and expanded into speciality cables with gross margin of 30-60%. High gross margin coupled with 5 tims of increase in revenue in Phase 1 will drmatically increase in earning.
7 patents and 22 pending.
Already has bank loan to fund the growth and equity financing is not required.
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7457672-13010-18158&type=sect&dcn=0001144204-10-048974
Preliminary quarter earning report out. $2.224 million USD net income and $11.98 million USD revenue. Earning per share of 7.5 cents for fiscal Q4. Revenue almost double over the last Q and earning more than double over the last Q. For the year, net earning of $4.6 million USD.
The results are better than my estimated numbers of 6.8 cents per share for the Q.
Based on Q4 results of 7.5 cents, the annualized earning of 30 cents per share with forward PE=3. Trailing PE=6.8.
Hi Minding, I will check STEM. Thanks.
NL
NL,
You may be interested looking at STEM you haven't already. They work with adult, not embryonic, stem cells. Their work should be unaffected by the Administration's recent ruling.
Minding
Bid is now 0.75 and ask 1.40
Absolutely. Plenty of time to buy stocks at deep discount.
Thanks Northern. I appreciate any and all information you have to offer.
Unfortunately this market hasn't been very supportive of a fundamental approach and/or a projection approach. (Witness CHGY which I foresee dropping between .95 and 1.20.) I'll continue being patient with BFTI. The stock is pretty volatile and I think (and hope!) better prices are ahead before it makes significant progress and certainly before volume comes in.
Minding
That is their projection of revenue from their new production facility (10Qs and 10K and my discussion with them:
June 2010 - June 2011: $51 million USD
June 2011 - June 2012: $110 million USD
June 2012 - June 2013: $200 million USD
June 2013 - June 2014: $400 million USD
June 2014 - June 2015: $745 million USD
They thought that they could have 30% gross margin. If they are right, they could make about $3 per share of earning in 5 years. This could be $15 - $30 stocks in 5 years.
Thanks. That's good news.
I have been anticipating they'd be putting the new facility to full use over the next few years. I'm not however clear that this report will make much of a dent since the facility opened at a somewhat inauspicious time in the short term (though good for the long run!)
I talked to one of their managers recently. They have been increasing production month by month since they moved to their new prodcution facility in March this year. So BFTI looks a great growth story in the next few years. They may be able to earn over $1.2 per share in 2 -3 years.
I think you're right about the 1.00 bid, but there's a tussle going on today. No volume on my screen with the current bid and ask. They look like they should report this week which may account for the entrenchment. I'm not sure 1.40 is possible.
However given what I've been reading about the Chinese economy lately, I'd be surprised if there's a surprise in the earnings. Don't you think progress has been hampered by a qtr or two?
Hi George,
It may be difficult to get fill at 1.00. But it is quite possible to get someshares of BFTI at 1.40 if you are willing to buy at that price.
Nelson
up 38% with 6888 shares. Bid now at 1.40 and ask 2.25. Again huge spread.
Who was lucky to get some BFTI shares at 1.0-1.1? I got only 500 shares at 1.10 today. It has been tough to acquire shares of BFTI.
Hi George, It is pretty clear to me that FEEC will be 10 bagger in about 3 years' time frame. It is a long term winner. I gradually build up my position there.
Northern
Key point, NL. Thanks for the clarification.
I'm with you on chasing stocks. It's rarely a good idea.
Interesting discussion on FEEC over at IV the past few days. The consensus is for patience and hopes for the Arrow deal. Dilution sounds like a pretty good likelihood without the Arrow deal and a reasonable thing to anticipate even with the Arrow deal (though less likely.)
I can be patient, but am stretching out my purchases.
Kind regards,
George
Hi Minding,
Now I undersatnd where your question came form. In China, they sell two konds of medicines, traditional Chinese medicine and Western pharmaceutical medicine.
JGBO is up 9% this morning with a small volume. But I will not chase it.
Best Regards.
Northern
Thanks, NL. I'm still baffled by the line item on their 10Q, Western pharmaceutical medicines, but they do look interesting.
Kind regards,
Minding
Hi Minding,
Regarding JGBO, I went through their 10Q and 10K filings. All their sale is in China. It looks undervalue from book value, cash on hand and PE basis at share price of low $8 range. I had a small position.
NL
Hi NL,
I'm finally getting to your JGBO suggestion and thanks for offering it.
They look interesting, but I don't have a decent grasp of the US-focused products, who their customers are, etc. It looks like they sell to drug distributors that perhaps move their products into the US. Though the Income Statement shows 2/3 of revenue is from Western pharma, I went to their website but haven't found this information.
Do you have this information and, if so, what is the source?
Thanks for your continued generosity.
All the best,
Minding
PS I wanted to move this reply to the JGBO board but didn't see a a way to do that.
BFTI Background Information of Reverse Merge from Northlion:
"BFTI.OB formerly FREZ.OB - (Frezer, Inc.)
New Name of Company: BEFUT International Co., Ltd.
CIK# 0001328888
Keating sold this shell to a large Chinese wire and cable company. Here is the operating company's website: http://www.shipcable.cn/befut/Default.asp
Details of the transaction are summarized below in this April 13th filing:
On March 13, 2009 (the “Closing Date”), the Company entered into and consummated a series of transactions whereby (a) the Company acquired 100% of the outstanding shares of common stock of BEFUT Corporation, a Nevada corporation (“Befut Nevada”), from Befut BVI in exchange for the issuance to Befut BVI of a net number of 117,768,300 shares of the Company’s Common Stock and the cancellation of an aggregate of 2,176,170 shares of the Company’s Common Stock and (b) the Company raised $500,000 in gross proceeds from the sale to four investors pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) of convertible promissory notes of the Company in the principal amount of $500,000 and warrants to purchase an aggregate of 720,076 shares of the Company’s Common Stock. As a result of the transactions, Befut Nevada became a wholly owned subsidiary of the Company. Befut Nevada, through its wholly owned subsidiary, Hongkong BEFUT Co., Ltd., a Hong Kong corporation (“Befut Hongkong”), wholly owns Befut Electric (Dalian), Co., Ltd., a PRC corporation (“WOFE”), which company has entered into a series of agreements with Dalian Befut, pursuant to which WFOE has established control over Dalian Befut, its captive manufacturing company. Dalian Befut is one of the largest developers, manufacturers and distributors of wire and cable products in Northeastern China.
On March 13, 2009 Befut Nevada purchased from three persons an aggregate of 2,176,170 shares of the Company’s Common Stock constituting 51% of the then outstanding shares of the Company’s Common Stock for an aggregate purchase price of $370,000. The funds were from the gross proceeds of $500,000 the Company raised on the same day, March 13, 2009, as set forth above. All 2,176,170 shares were cancelled as part of the share exchange transaction described in clause (a) of the immediately preceding paragraph.
On March 25, 2009, pursuant to a Stockholders Agreement dated March 13, 2009 among Befut BVI, Cao and certain other stockholders of Befut BVI which was filed as Exhibit 4 to the Original Statement (the “Stockholders Agreement”), Befut BVI distributed to two of the stockholders which were parties to the Stockholders Agreement (in exchange for all of such stockholders equity interest in Befut BVI) an aggregate of 4,096,288 shares of the Company’s Common Stock previously held by Befut BVI, thereby reducing the number of shares of the Company’s Common Stock held by Befut BVI to 113,672,012.”
Befut Corporate Structure
A detailed description of the corporate relationship between the different companies and people is given in the 8-K filed March 19, 2009. There is also a very detailed description of the company's business. This is not a small company - they have annual revenues of approximately $20,000,000. Here is the link:
http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=6490783
In brief, after the transactions:
Befut (Virgin Islands), along with 2 connected parties
owns 98.26% of
BEFUT International Co., Ltd.)
which owns 100% of
Befut Nevada
which owns 100% of
Hong Kong Befut
which holds 100% of the equity of
WFOE - Befut Electric (Dalian) Co. Ltd.
which has as its 100% captive
Dalian Befut - the NE China Wire and cable Company
(whose shares are 98% owned by the same principals
of Befut BVI - Hongbo Cao and Tingmin Li)
and, Dalian Befut (along with Cao and Li) owns 96.6% of
Dalian Marine Cable Co.
Share Structure of Frezer: (Updated to reflect holdings after the RS - further down)
Authorized: 200,000,000 Common Shares and 10,000,000 Preferred Shares
The new OS following the transactions described above and in the various filings is: 119,859,130 (as given in the 8-K).
There are also warrants issued for another 720,076 share, and the convertible notes payable could also result in the issuance of an additional 1,064,496 shares at some future date. The exercise price on the warrants is 19.16 cents per share.
Shareholders are: Befut BVI (Virgin Islands Co.) [after 4.07:1 RS and in June 2009 10K: 27,929,242 (93.6%)]
Mr. Yining Xia [after 4.07:1 RS and in June 2009 10K: 749.930 (2.5%)]
All other shareholders [after 4.07:1 RS and in June 2009 10K: 1,153,499 (3.9%)]
**Immediately after the share exchanges in March, the former controlling party and associates still had 1,493,830 shares as recorded in the 8-K (KI Equity Partners IV,LLC had 1,424,634, Garish Financial had 34,598, and Kevin R. Keating had 34,598).
**In the 10-K (June 30, 2009), it mentions that another 58,815 shares were issued in the three months prior in connection with the 4:07:1 Reverse split, making a total of 29,832,671 shares outstanding and provisionally covering the warrant and convertible notes. Based on calculations, it seems that there are only 3.9% of those are held by general shareholders, meaning that there is a very small tradeable float."
Some BFTI information and estimation
For BFTI, when I first went over their website, the company mentioned to achieve 5 billion RMB revenue in 5 years. 5 billion RMB = $730 million USD revenue. I went over their SEC 10K and 10Q filing, they mentioned to achieve $250-300 million USD revenue in 3 years. Those numbers had really cought my eyes considering the stock was traded at 35 cents bid and 48 cents ask, or $10.5 - 14.4 million market with annual revenue of $20 million in the last 12 months. Better yet, their gross margin is expected to expand to 30-35% from about 25-27% because they shift they products from low margin convention cables to high margin special cables. As I checked, conventional cables have a gross margin of 8-10% while special cables have a gross margin of 30-45%.
I did further checking and found that cable industry is the 2nd largest industry in China, after car industry, with about 2,000 -4,000 producers, most of them produce conventional cables at a small scale. Majority of special cables was imported from oversea.
So I have a good story here, business is going to increase from $20 million to $730 million USD in 5 years, or 37 times; and earning sure is going to increase more than 37 times because of fixed cost and margin expand. The last 12 months of earning was 10 cents per share, at 37 times, that will be $3.7 per share. Pretty low risk to buy the stock at even the ask price of $0.48 per share, ha?
With all the information, I have the following best case estimation:
Year 1: $56 million revenue, $0.3 -0.35 per share of earning.
Year 2: $112 million revenue, $0.7 per share of earning
Year 3: $224 million revenue, $1.5 per share of earning
Year 4: $448 million revenue, $3.2 per share of earning
Year 5: $730 million revenue, $5 per share of earning
Can BFTI achieve the above loft projections? I think that year 1 is very likely based on the latest quarter report. The probablity decreases from year 2 to 5 due to future market uncertainty.
But if my average price is 55-60 cents per share, that is less than the forward PE=2, the risk is very low. I can continue to monitor the company progress and decide whether I want to reduce or increase my position in BFTI going forward.
well, haven't really looked into it yet, been doing other things.
Hi bradford, Good to see you here. I am waiting for the next Q report to be out on August 15 to gauge their progress. So far BFTI looks like a very good long term story
just swinging by here, mostly cause northern is here.
Hi Minding, Talke a look at JGBO. The Q earning report just out. Pretty good numbers with strong balance sheet. I just bought 1500 shares at 8.50.
Hi Minding, From the previous quarter revenue and earning, PFTI does not look very attractive at the current share price. The key is whether they can deliver their projection. We will know that in the next quarter earning report that will be out on August 15. I think that they can deliver their projection, but I want to confirm that in the next quarter earning report. So I think that it may be better to wait and see at this stage.
Clearly an 'undiscovered' stock! In fact, thanks to you, I'm just discovering it.
Sales projections sound great, but that and $1.85 will get you a coffee. :) Clearly there are reasons you believe they could meet expectations. I'll check past posts (which I have yet to do.) If you have anything to add to your previous posts regarding your perception, difficult to find info sources, I look forward to your thoughts.
As always, thanks Nelson.
Minding
March Q/10 earning report just out. Revenue of $6.708 million USD and earning 0.691 million. Gross margin of 25.42%. It was better Q than I thought considering it was transition Q. Revenue projection of $56 million USD from June 2010 to June 2011, which is almost double the previous yrearly number.
"Outlook
Primarily for the reasons described below, we believe we will experience annual sales growth of more than 70% for our next fiscal year ending June 30, 2011.
Among our more than 200 customers, approximately 30 are considered "large" customers with average annual specialty cable order needs of more than $7 million. Due, in part, to our past limited production capacity, we were not able to accept large-volume orders from these customers. With the recent completion of our new factory, which started operations in early 2010, we now have the ability to produce specialty cables in large volumes. Thus, in the quarter ended March 31, 2010, we began to adjust our sales strategy to focus mainly on accepting large-volume orders. We estimate that in our fiscal year ending June 30, 2011, we will accept large-volume orders (more than $700,000 each) from more than 30 existing and new customers, including petrochemical companies, mining and metallurgical companies, nuclear power plants and shipbuilding companies. We expect these customers to generate sales of about $45 million, which we estimate will account for approximately 80% of our total sales for our fiscal year ended June 30, 2011. We plan to add "large" customers each year as there are currently more than 100 companies located in northern China with average annual specialty cable order needs of more than $7 million."
Bid at 1.25 and ask at 2.50. There is no way that you can have good trading volume at this kind of spread. I had a bid at 1.01 in yesterday. They filled 1 share yesterday and 5 shares today. That is crazy.
Pull back today. Yesterday looks like the short term top for BFTI. The stock pops too fast and too quick and needs consolidation.
Bid is now 1.62 and ask 2.0 Huge spread.
Hi Northlion, Great profit for you! Your patient has paid off big time. I agree compeletely that you got to take profit sometimes considering the volatility of these micro stocks. It may turn out that you sell at the short term top.
I usually a long term player. So I may stay here for next 2 years since I just got in 1 month's ago.
Northern
I bought this long ago while it was a dormant shell - Frezer Inc. I don't really know about other posters' holdings. I have put what I could figure out in the I-Box. Feel free to update/fix that as more information comes to light that would clarify things further.
I have been here for more than 2 years, having bought in Jan and Feb 2008. That's a long wait, but it is nice to see a positive outcome. Not to say that it won't keep going higher - it might, but I am gradually learning that a bird in the hand is better than 2 in the bush. So I will be satisfied with the double and better and call it a day.
NL
How many shares did you sell out today if you don't mind I asking? The volume was about 13K shares. Thanks.
Hi NorthLion, that will do. How long have you been BFTI? Do you know how many shares roughly all your posters here own prior to reverse merge? Was that float about 600K shares before 1 to 4.08 reverse split?
Thanks.
Northern
Ok..thanks, Northern... I have added you as an Assistant to start with and then resigned myself as main moderator. The changes may take a little while to be effective. Then you can apply for full mod status.
Best wishes to all here.
NL
Congratulation to a nice gain! I will.
Northern
I sold out today at 1.58 and 1.62. I made a nice gain - patience was rewarded.
I have been board moderator but will retire - anyone else interested in taking that role?
NorthLion
BFTI is a potential huge winner. Small float and tightly held shares. With the jump in share price with little volume, it seems that MM has little shares available. If the company can deliver the huge growth potential, it will make shareholders rich.
But the only question is: does it have sell-off if a poor Q earning report next month? If so, it will be buying opportunity.
Bid 1.40 and ask 1.58
Someone bought another 2K shares.
My concern is that, if we take profit now, theupcoming quarter report turns out to be good, we may not be able to buy back the shares we plan to sell. The float is small. I decide to hold my position.
Great advice on the profit taking, then buy back after earnings report.
eevw, The current share outstanding after RS is 19.511 million shares based on the latest 10Q and 10K. But if you include warrents, the total and fully diluted share count would be 30.281 million shares. I think that you should be able to sell your shares if you wish so. The ,current bid is 1.20. If you want to sell your 4K shares, say tomorrow at 1.20, I think that you should be able to do so. But if you own over 100K shares, it may be a different story.
BFTI looks like a big winner (potential 10 bagger from the current level) long term. But short term, the next Q earning report may not be good since their production may be affected by their transion from the old production plant to the new plant.
I like BFTI a lot and plan to hold it long term although it is tempting to take profit at this level after more than double in one month.
Also, Northern, you think we'll be able to sell these shares if we have a slow run up...not many buyers around these parts
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(1) BFTI Presentation: http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7457672-13010-18158&type=sect&dcn=0001144204-10-048974
(2) BFTI English and Chinese Websites: http://www.befut.com/
From BFTI website:
"Dalian, the most famous city of north China, is stepping on the world stage with its beautiful environment and solid economic power. Dalian Befut Wire & Cable Manufacturing Co., Ltd. is headquartered in Dalian. The company has been investing hundreds of million yuan to construct Befut Industrial Estate covered an area of 150,000 m2 in ChangXing Island which is the third largest island of China. With shipbuilding, nuclear power plant construction, and other advantages in ChangXing Island, Befut is focusing on manufacturing marine cables, and other special cables. In the field of high-tech products, Befut has won competition unceasingly, standing on the forefront of the industry, and gradually have the overall strength entering into the global market. Befut takes full account of the market demands, understands the demands of the shipyard, steel, coal, nuclear power plants, offshore oil platforms in-depth, and has created well-designed cables for special purposes, and special occasions. This has met customers' demands, while improved the company’s product technology as well. In 2008, only half of the year, Befut has applied for 5 patents. Now, Befut has ascended among the domestic high-tech cable manufacturing enterprises. In early 2009, Befut Industrial Estate in ChangXing Island is going to put into operation. The company expects to reach the output value more than 5 billion yuan within 5 years. The market of Befut will expand to the whole nation, even to the whole world with the center of Bohai Rim."
(3) Quarterly Financial Reports - Revenue and Earning (all numbers in thousands except otherwise mentioned):
Quarter | Revenue | Cost of Good Sold | Gross Profit | SG & A | Net Income | Total Share Count (million) | Earning Per Share (cent) | Gross Profit Margin (%) |
June Q/09 | 6,126 | 4,101 | 2,025 | 458 | 370 | 29.511 | 1.25 | 33.05 |
September Q/09 | 5,484 | 3,863 | 1,621 | 610 | 690 | 29.511 | 2.34 | 29.56 |
December Q/09 | 7,126 | 5,235 | 1,891 | 457 | 994 | 29.512 | 3.37 | 26.54 |
March Q / 10 | 6,708 | 5,003 | 1,705 | 743 | 692 | 29.513 | 2.35 | 25.42 |
June Q/10 | 11,940 | 8,856 | 3,085 | 2,152 | 2,136 | 29.716 | 7.19 | 25.84 |
September Q/10 | 15,930 | 11,671 | 4,260 | 1,050 | 2,248 | 29,716 | 7.57 | 26.74 |
December Q/10 | 14,871 | 10,954 | 3.917 | 1.182 | 1,937 | 29.716 | 6.52 | 26.34 |
(5) BFTI Background Information of Reverse Merge: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=51222678
(6) September Q, 2009 Quarter Report Regrading the Completion of Phase 1 New Changxing Island Production Plant:
"Recent Developments
(7) March Q, 2010 Business Outlook:
Primarily for the reasons described below, we believe we will experience annual sales growth of more than 70% for our next fiscal year ending June 30, 2011.
Among our more than 200 customers, approximately 30 are considered "large" customers with average annual specialty cable order needs of more than $7 million. Due, in part, to our past limited production capacity, we were not able to accept large-volume orders from these customers. With the recent completion of our new factory, which started operations in early 2010, we now have the ability to produce specialty cables in large volumes. Thus, in the quarter ended March 31, 2010, we began to adjust our sales strategy to focus mainly on accepting large-volume orders. We estimate that in our fiscal year ending June 30, 2011, we will accept large-volume orders (more than $700,000 each) from more than 30 existing and new customers, including petrochemical companies, mining and metallurgical companies, nuclear power plants and shipbuilding companies. We expect these customers to generate sales of about $45 million, which we estimate will account for approximately 80% of our total sales for our fiscal year ended June 30, 2011. We plan to add "large" customers each year as there are currently more than 100 companies located in northern China with average annual specialty cable order needs of more than $7 million."
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