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Get ready for a low-ball, single-bid offer for the trust, NDRO unitholders.
"On January 12, 2018, Enduro launched a process to sell all its oil and natural gas assets, including the Underlying Properties and its Trust Units. The Underlying Properties are being sold subject to the Trust’s 80% Net Profits Interest. If the sales process relating to the Underlying Properties is successful, Enduro expects the new owner to assume Enduro’s obligations as the sponsor of the Trust. There can be no assurances that Enduro’s sales process will be successful, in whole or in part, or that the new owner of working interests in the Underlying Properties will perform its obligations as sponsor of the Trust in a manner comparable to Enduro."
I bet the same consortium of investors get the same super-sweetheart deal as last time! Ha!
GFRE is sure on a tear. My daughter bought this in her Coverdell at split adjusted $2.50. Now her college is just about paid for! Just have to keep pace with inflation for the next 11 years & keep making contributions.
YUII: There it goes...up over $10.
100k+ shares went off in about three minutes. It's tough to build a pos'n of size in these thin stocks...so even small beer like that pops the stock good.
YUII noon swoon attempt repelled.
With extreme prejudice. Guess more money was eating lunch at their desk today than normal. Ha!
YUII: Game-changing acquisition
Here is the press release:
http://finance.yahoo.com/news/Yuhe-International-Inc-prnews-2610599629.html?x=0&.v=50
Basically, for 15.2MM up front and 2.5MM in capex expenditures YUII almost doubled the number of breeder farms they have. Now, that's not the same as saying they doubled their capacity...the purchased breeder farms housed 600,000 breeding pairs whereas YUII currently holds about 1.5MM breeding pairs.
The implied multiple is astounding, though. YUII can generate about 11MM in net profit using their existing asset base. If we apply that same rate of profitability to the purchased assets, YUII purchased the assets for less than 4x earning potential. And they had enough cash on the balance sheet to do it.
They guided to 150MM broilers sold in 2010. Depending on how fast this purchase ramps, it could add another 40MM to that total. That probably means a $12.50 stock at a very conservative 8x multiple. YUII is a very compelling value right now.
Let's see...if broiler prices in 2010 hold steady to 3q09 as management hinted, that's RMB 2.85/broiler, or about 42 cents. That's about 62.5MM revenue from broilers. Probably another 0.5MM from egg sales and 1.8MM from sales of retired breeders. So full year 2010 revenue just a shade less than 65MM.
Assume net margin stays at historic rates of about 30%...That means 19.5MM net income. There are about 15.7MM shares out, but lets round that up to 16MM. So $1.21/share 2010 earnings.
At a multiple of 8x that means $9.70/share. Even at a ridiculously low multiple like that, we're due another 25% to 30% on the stock price from here. If nominal food price inflation returns to China in 2010, or YUII achieves a fair market multiple, we could really see some fireworks.
CBPO: another blow out quarter!
YoY rev about double. EPS right at 33 cents.
Of course, I'm backing out the stupid, stupid, extra goofy non-cash charge for changes in the price of the stock & underlying warrants. That rule seems specifically designed to obfuscate earnings and confuse investors.
The real earnings number for CBPO is 33 cents for the quarter. That makes 65 cents in the past 6 months. So CBPO would have to double to trade at an 10x multiple! <G>
They generated over 7MM in operating cash flow. 1.2MM change in accts receivable vs 80.8MM revenue in 2009 so they're not stuffing the channel.
Net margin was 48%. Of course, non-controlling interest gets a material portion of that. CBPO have 50MM cash on the books...it would be nice if they used a portion of that to buy a larger controlling interest in some of their subsidiaries.
Just a big quarter from CBPO. Kinda expected a big quarter...and CBPO delivered. This stock is way undervalued.
http://sec.gov/Archives/edgar/data/1369868/000120445909002118/cbio10q.htm
CHGS 4q ought to be VERY interesting.
We should collectively follow up on this during the call, but CHGS said batch production of precision abrasives would start in early September. Full year sales should be 2000 tons or about 70MM RMB. This number jibes with text of the 3q09 press release:
"The Company has also announced its first abrasives sales contract with a Taiwan-based customer. The term of the contract is five years, with 300 to 1,000 tons of the product delivered each month."
So 2000 tons in the 4q09 (assuming no shipments in 3q) is about the midpoint of the 1000 to 300 tons/month range.
This quarter CHGS did a little less than 15MM in revenue. The total revenue for precision abrasives in 2009 that I have in my notes is a little high...my notes say 70MM RMB from abrasives in 2009. That would be over 10MM USD, which seems a little high. I wonder now if they actually said 17MM instead...which would still be over 15% of revenue.
Here's the white paper on their twin blade technology:
http://www.nordicwindpower.com/technology/whitepapers/NWP_Two-Blade_Approach.pdf
They claim cheaper materials cost, increased reliability (hard to argue with their working turbines reliability data), and decreased construction cost.
So why the heck is anybody using three blades?? The whitepaper answers that question, of course.
CCGY ASP and utilization levels aren't much different from last quarter's. ASP for biodiesel is up about 6% but production was down by half quarter over quarter. Specialty chemical ASP was up a couple percent & production was up a smidge.
They're still only producing at about 14k tons annualized. I'm sure everybody will want to know, how do you use your new capacity when you can't use all your old capacity?
YUII net margin...you're correct, I was being conservative.
If you take the mean net margin from the past 7 quarters it's 30%. If you take mean revenue from sales of retired boilers it's 1.9MM. If you take mean egg sales it's .425MM. Mean broiler price excluding 4q08, which was a bit of an outlier, was RMB2.87.
So ON AVERAGE, given YUII guidance of 150MM broilers in 2010, we should expect 19.8MM net income & $1.25 per fully diluted share.
That sort of margin is certainly possible. After all, they just told us they expect net margin in the 4th quarter to be 31%+. I'm going to put in a bid today.
All conference calls are rigged. Most don't know that the folks hosting the call for any conference call both select which lines get through during the Q&A AND select the order the questions are taken.
That's why sometimes at the end of a call the operator will announce there are no more questions...then the IR rep will break in and say, 'Uh...let's poll for questions one more time...' while he/she pushes the button. Then, lo & behold! There's another question!
Everybody has a different philosophy but many execs/IR firms will advise not to take any questions from folks you aren't familiar with. That's not a problem for most small cap China Stox because they're happy to get questions from anybody.
One thing I find helps is to come up with some questions a day or so before the call & send them off to the IR rep. That let's everybody know who you are, that you're not a crackpot (or that you are!), and what you might like to ask. It makes answers crisp & everybody sounds on the ball. If the company wants to fill up the Q&A so it looks like there is interest in the stock they'll take your question. Then, if you want to slide in the hardball question at the end, that's up to you.
This has been one man's opinion...
YUII: basic math on 2010 numbers
150MM broilers @ RMB2.85 per, that works out to revenue from broilers in 2010 of about 62.8MM USD. Conservatively, they'll generated 1MM from the sale of retired breeders. And maybe another 500k from the sale of eggs.
At 25% net margin (YUII have recently done much better than that) that works out to 16MM net income. Which is almost exactly a buck per fully diluted share.
So YUII is selling at less than 6x forward earnings.
What do you get for that? First of all, almost zero a/r. You know what YUII DSO is? NINE AND ONE HALF MINUTES!! Their entire cash conversion cycle is a little more than three days. So, like Walmart, they are making it up on volume.
Meanwhile, net margin is 28%. So not only do they make it up on volume, but they're turning their stock at fat margins. Without extending credit to customers. Enviable.
What about cash flow? Fuhgeddaboudit! 80 cents per share operating cash flow in the first 9 months of 2009. Pretty good.
I've been watching YUII for a while & thought it would get away from me after reading the earnings release. Seems like Mr. Market has worked himself into a lather to sell YUII, though. So I'll wait him out and pick up some shares at bargain basement prices. Thankyou Mr. Market, you psychotic basatard!
This stock jumps around like a chicken with it's head cut off.
Can't tell if it's just market dislocation due to the recent uplisting or negative sentiment ahead of the earnings release.
HOLI out with great news today
48MM subway contract. Not the old low-margin business they had before but subway signallying...high margin stuff.
48MM is about 25% of the backlog HOLI reported in their last filing. This is a big contract for them. That's just one system! Subway infrastructure is going to grow at close to 30% CAGR over the next 6 to 7 years. Huge opportunities for HOLI.
The problem with being out of CCGY now is that they have easy access to an export market. The specialty chemical market on a world scale is huge compared to CCGY production capacity. It wouldn't be totally beyond the pale for an international customer to buy 10,000 tons/yr specialty chemical.
My concern is some huge contract crosses the wire while I'm trading a technical blip. Suddenly, saving dimes costs me dollars.
SIAF: So, was this the Fortune Pharma shell deal?
Even though China is a totalitarian regime, it is in a lot of ways less regulated than the west. Bromine production in China is definitely illegal without a license. Enforcement is at the discretion of the gov't. GFRE tell us that licensing is strictly enforced but the purchase price of unlicensed bromine reserves tell a different story!
Exploration is a different story. There licensing is both required by law and enforced.
GFRE has some text on this in their most recent presentation:
http://www.gulfresourcesinc.cn/images/pdf/10_20_2009_gfre_ppt.pdf
See slide 10.
Anyhow, this has been a topic of debate over at GFRE for a couple of years. Unlicenses production and exploration are illegal. It's not illegal to hold bromine reserves and all the equipment to produce those reserves. Just illegal to produce and sell the bromine.
Good to see GFRE uplisted & getting some love, BTW.
SIAF: What's the CIK?
Or just shoot me the link to their filings...
Yeah, I meant reverse split. Good catch! CHGS intent was to do a reverse before uplist. Don't know if that's still the plan or not...my guess is that's still the plan. Honestly, I'd rather see a quick uplist and THEN strong earnings for several quarters. CHGS will get better multiple expansion on the stock if they can post a series of stellar quarters while they're listed on a major exchange. Which means my brokerage accounts will benefit more (I'm only thinking of what's best for the company!)
Precision abrasives started trial production in July. CHGS anticipated commercial launch in 'the fall'. Expect full year 09 abrasives revenue to be in the 70MM RMB range. Remember, they already have a contract in Taiwan...
2q refractory business was running 100% & China production hit record levels in 3q. That business line is pretty much tapped except for upward price moves.
Full year proppant revenue will be in the 80MM RMB range. Margins should be materially better sequentially.
I just think good things are in store for CHGS in 2h09.
ADY: Milk is hot in China
Consider the following:
1.) Kohlberg Kravis Roberts invested 150MM in Modern Dairy in the middle of this year.
2.) Carlyle Group bought >17% of Yashili in September.
3.) Sequoia made a >$60MM investment in FEIHE in August.
#3 is the point that interests me most. FEIHE is publicly traded in the US as ADY or American Dairy...a bit of a misnomer. Sometimes it's hard to perform thorough due diligence on some of these China Stox because of the language barrier and disclosure customs in China. So it's good to use a third part as a stalking horse to identify sectors and companies.
Well, who do you think does better due diligence, KKR, Carlyle, and Sequoia....or us? Remember that Citadel financed ADY in recent years as well. I ask again, who does better due diligence: Citadel or us?
Ok. Maybe it's too close to call!
ADY has been a big, big beneficiary from the melamine scandal in China. Melamine was injected into milk products by middle men so that milk could be watered down without reducing its protein analysis. ADY has integrated the collection process so there was zero exposure to melamine in any of their product lines.
Talk about a brand building opportunity! 'Feed your baby our milk! It won't kill your child!'
Milk is seasonal in China. The strongest quarter is the fourth quarter and business picks up as temperatures drop. ADY is poised to report some good numbers this year. 2010 make good number in the Sequia deal is $4.30. Based on 2h09 revenue guidance and last quarter's margins, ADY will earn $3.70 in 2009.
I've heard analysts with $50+ price targets. ADY seems like a great company in the correct place at the correct time. Again, nothing is a sure thing, but ADY has so many positive things going for it that it's worth taking a position in.
Earnings due 16nov!
Yep...rotated out of a lot of China Stox, but when it comes to CHGS I am LETTING IT RIDE!
Steel production was at record levels in China during the 3rd quarter months. I'm not dumping my CHGS into those fundamentals even if the stock goes up 20% in a day.
I played GTI the same way, and they only benefit from China steel collatorally. Plus, precision abrasives are coming on. Plus there is a good chance CHGS will execute a reverse merger & uplist in the next several months.
Nothing is a sure thing, but there are so many GOOD things going for CHGS that odds favor a fully weighted long position. Bet the most when odds favor success!
CCGY opens new plant.
As expected. Current capacity is 10k tons biodiesel per year and 18k tons specialty chemicals. New capacity is 110k tons biodiesel per year and/or 58k tons specialty chemicals.
Huge capacity increase. Good news on the back of some phenomenal GDP numbers out of China.
FUQING CITY, China, Oct. 22 /PRNewswire-Asia-FirstCall/ -- China Clean Energy Inc. (OTC Bulletin Board: CCGY - News; "China Clean Energy", the "Company"), a producer of biodiesel fuel and environmentally-friendly specialty chemical products made from renewable resources in The People's Republic of China ("PRC"), today announced the completion of construction of the Jiangyin plant.
The commissioning process is now underway and a test-production run is expected to occur in November 2009. The new plant has been designed to produce up to 100,000 tons of biodiesel per year or a combination of up to 40,000 tons of biodiesel and 30,000 tons of specialty chemicals.
"We are pleased to announce the completion of the Jiangyin plant," said Mr. Tai-ming Ou, China Clean Energy's Chairman and CEO. "Once fully operational, we expect to ramp-up the new plant to full capacity within six to twelve months which, we hope, will contribute to profitable growth in 2010 as market fully recovers."
To support the expansion in production, the Company has started procurement of raw materials. Pictures illustrating the completion of the new plant are available at: http://www.chinacleanenergyinc.com/Picture.htm
I would have guessed their 4q earnings would be better than they are. Maybe they tried to hide a skinny quarter in the yearly numbers and push the good numbers into calendar 3q.
Domestic steel had record months in calendar 3q09. That's can't be bad for SUTR.
None of us know for sure how strong 2h09 will be for CHGS.
But there are some sign posts that point the way. From a BASML document this morning:
"Monthly output hitting new high. 52.3Mt of crude steel output in Aug creates a new historical high, which is annualized at 615Mtpa, +23%yoy & +3%mom.
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Merrill Lynch revised up 2009 crude steel output forecast to 545Mt, and
there’s still upside risk.
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Record high monthly apparent consumption of crude steel. Driven by the new high of crude output, China’s apparent crude steel consumption broke the record for the 4th consecutive month to 52Mt in Aug, +2% higher than the previous record high in Jul, & +48%yoy. Jan-Aug total apparent consumption increased 17%yoy to 371Mt."
And lest we forget, First Solar recently inked a deal for a massive solar project in Inner Mongolia. The targeted capacity from solar in the PRC's energy plan continues to go up & up. Things like that are going to drive precision abrasives, which are likely to be CHGS highest margin product. Whether or not we'll see follow through from that this year remains to be seen, but based on revenue guidance for this product line we are likely to see something positive.
Finally, I would point out what CRR said on their last conference call:
"<Q – Steve Ferazani>: Okay. And then, just the last question was just on utilization in the Chinese facility and sort of long-term view of that operation?
<A – Gary Kolstad>: We’re running it pretty hard. I can say that."
This is all the more important when you consider what they said earlier in the call:
"Internationally, our China operation has had to contend with a large number of domestic competitors."
So the signs indicate that every single one of CHGS business segments are operating on all cylinders.
The day is not over yet!
Hedge/institutional investors are afraid to talk rationally about China Stox.
Said this on another board this morning. If an institutional investors were overheard talking about China Stox in other than disparaging tones, his/her reputation would be at stake. It's an almost clique-ish thing, but that's why so many out sized returns have been made by all of us in these issues.
So yeah, this forum is a rare thing. Rational discussion of China Stox. Not sure it happens anywhere else.
CBPO runs up a little on uplisting article...
Article appeared on SeekingAlpha & was also picked up by street.com. The author makes the obvious observation: even though these uplistings are widely expected, they are still profitable. The bottom line is that funds want in these names but are prohibited by the fund description/prospectus. As soon as the China Stox are on a 'major' exchange, funds pile in.
Finally, a lead pipe cinch for the LITTLE GUY.
http://seekingalpha.com/article/162686-the-next-big-names-in-china-up-listings?source=yahoo
Suspect this has RINO running this morning, too.
HOLI touched $10 this morning.
Couldn't believe yesterday we were buying sub $9 shares. All we wanted. Sometimes the market hands you gifts.
Some data for those following CCGY
From the CBI.L interim report:
With the turn in the market, the average selling price has improved materially from the lowest point in December 2008.
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As the selling price fell by 41 per cent. to RMB 3,942 per ton (2008: RMB 6,671 per ton), revenue fell to RMB 59.19 million (2008: RMB 89.5 million). Meanwhile average feedstock price fell to RMB 2,918 per ton (2008: RMB 5,197 per ton).
That's within about 1.5% of the ASP that CCGY reported for their biodiesel. And almost exactly the ASP that GU reported.
CCGY had positive earnings last quarter.
I know most are just discovering the FASB disservice to investors that is EITF 07-5. So let me pass on the details as I know them...it requires a company to mark instruments that can be construed as indexed to the company's equity. As I read the rule, if the instrument is in a currency other than the operating company's operating currency then it must be recorded as a liability...and changes in that liability must be recorded on the company's statements of income from quarter to quarter.
What does that mean in layman's terms? Warrants are indexed to a company's equity...everybody sort of understands that intuitively. Every single china microcap ever has operating currency of renminbi/yuan and warrants priced in US dollars. There is no readily available market for the warrants (they are Level 3), so they are marked every quarter according to a Black-Scholes model.
Here's the bottom line, most of the time if the model says the warrants go up, the liability on the balance sheet increases. The amount of the change in the liability gets recorded as an expense on the income statement. It's a complete farce and a total fiction...again, a monstrous disservice perpetrated on investors by FASB.
So, what does that mean for CCGY? Well, guess what, CCGY share price went up during 2q. So the warrant liability went up. So there appears on the income statement a bogus non-cash charge that makes the 'as is' bottom line number useless in evaluating the operation of the underlying business.
What you have to do is add the 'Change in fair value of warrant liabilities' line item back into the 'Net Income' line item. In this case, net income goes to +330,830 or 1.1 cents per fully diluted share. Good considering the circumstances!
As an object lesson, it's important to understand this procedure. A lot of China Stox had large positive earnings because the change in their warrant liability was negative. A lot of China Stox had large negative earnings revisions because the change in their warrant liability was positive. Ironically, that makes earnings of China Stox that are doing WELL look BAD and earnings of China Stox that are STRUGGLING look GOOD.
Thanks for looking out for us, FASB!
re: CBPO...Like I said...in case anybody is interested.
CBPO operating cash flow by quarter:
In case anybody is interested in the numbers:
Quarter Cash from opps
2q09 28429522
1q09 7082292
4q08 2002039
3q08 14691924
2q08 6623785
1q08 2018879
4q07 12650904
3q07 10950272
2q07 7309632
1q07 1235082
CCGY operating cash flow by quarter:
In case anybody is interested in the numbers...
Quarter Cash from Opps
2q09 482,803
1q09 589,445
4q08 5,116,806
3q08 4,235,491
2q08 165,964
1q08 1,918,332
4q07 3,307,921
3q07 1,213,417
2q07 527,820
1q07 236,301
HOLI: picked up some sub $9 shares!
Whoa!! didn't expect that. Might be the last shares with an 8 handle for a while.
HOLI break outs, batman!!
If this isn't a breakout, I've never seen one:
http://stockcharts.com/h-sc/ui?s=HOLI&p=DAILY&b=5&g=0&id=p50612931868
HOLI met with investors several days ago. They must have whispered some sweet nothings in those investor's ears.
Wonder what they said? Nuclear contracts picking up? Improved margins on subway contracts? More high speed rail contracts? The winder power control systems they were talking about last year?
How high will it go....
CHGS customers are rocking in China
For pretty much every one of their business segments...refractories (Steel) business is especially busy right now.
China's crude steel production was up 3.3% sequentially and up 22% year over year. That's CHGS bread & butter business. And according to the Ministry of Industry and Information Technology, China steel production will be up 6% this year.
In the meantime, CHGS new product line, precision abrasives used primarily for cutting/polishing silicon wafers (think Solar power) is set to have an extended period of exceptional growth. Check out this Wharton School of Business article on renewable energy in China:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2214
The solar industry is expected to grow 40% per year over the next four years.
The need for continued technological innovation means that investment in China's solar energy is expected to total US$55.9 billion over the next 15 years. In 2007, the National Reform and Planning Commission launched an initiative to further the development of Chinese solar power with a 10 billion RMB (approximately US$1.46 billion) funding commitment.
If CHGS achieves the guidance they provided in their last conference call, this is a stock that could earn 30 cents in just the 2nd half of 2009. Meaning they are currently trading at roughly 4x 2h09 earnings. Pretty tasty.
The only thing keeping CBPO from uplisting,
as far as I can tell, is the number of shareholders. So the more people buying a few shares thinking they'll get a bounce on uplisting, the more of a self-fulfilling prophecy it will turn out to be.
BTW, this was sponsored by the same folks who brought us HOGS, correct? Those folks have a history of getting each of their sponsored companies uplisted. Every one so far as I can tell. So CBPO will be on that path...probably sooner rather than later.
CBPO new director of research is an influenza expert.
Remember the press release?
http://finance.yahoo.com/news/China-Biologic-Products-prnews-1231486999.html?x=0&.v=38
Dr. Xie is a veteran in the biopharmaceutical industry and has published several papers and articles related to the field of plasma-based research. He holds a number of patents related to his biopharmaceutical research, including research on plasma-derived hyperimmune globulins and alpha-1 proteinase inhibitor, and has received the Guangzhou City Science and Technology Award in connection with his work "Preparation of Equine Antibodies against Avian Influenza."