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You think someone will pay $75M for by far the smallest division in terms or revenues, profits, assets, growth, potential, everything when the company has 3 MUCH, MUCH more valuable divisions, yet the market cap for the sum market cap of all divisions is $40M?
SIAF just signed a deal to buy up to 51% of the restaurant chain for 1.25x NTA, yet you put a price tag on HU of $75M?
They want to be an integrated, diversified food supplier. They aren't going to sell assets, because they have a longer view than we do. As a shareholder, I''d prefer an asset sale to equity funding too, but I wouldn't get my hopes up.
And $75M is just pie in the sky stuff.
Curious what your FF construction and sales projections are. Care to share those.
Generally, seems the sales side ramps more slowly than first company estimates, but the new contracts and expansions on the construction side counter.
I was a little disappointed that Solomon seemed to say that he needs financial sales performance metrics from PF1 before embarking on a magnified expansion. Well, happy he used the term "revolution," but the timing for new prawn farms is late 2013 or 2014.
Course means nothing if earnings and dual listing happen as planned.
Solomon said one container equals 20MT of peeled shrimp, and they can sell 4-5 per week. At $10,000 per MT -- and that's a complete guess -- that's $800,000 to $1,000,000 per week, or $41.6M - $52.0M annually. The vast majority will be distributed wholesale, but some will be sold through their own retail outlets, generating higher margins.
Now, this is a capacity, and the supply is seasonal, so they will not reach those volumes. But this is just one product line. We already know that they are distributing another 80MT from Norway at the same time, 25% at the retail level.
Yes, the equity issuance is not diluting eps, probably is even helping over time. The WSPS is a case in point. That investment may lead to $50M revenues in 2013.
Overhang is another issue.
But I still maintain that we don't know how many more shares will be issued in 2012. If the 90M Solomon referenced, creating all this uproar was a fully diluted number, then there may well be 7M - 10M more this year and 10M next. We just don't know right now.
That's $5M per year in extra shares that needs to be bought, if all the shares are sold into the market. We also don't know what percent of the shares are sold and what percent are held longer term.
I defer somewhat to those who watch level two all day, and conclude that there is dumping. No doubt, this does not help. But I've yet to see any real intelligence quantifying how many shares can be absorbed over a long period of time with or without creating overly burdensome selling pressure.
There just seem to be a number of variables here that I am not convinced posters know (including me), yet conclusions are drawn.
I did not hear him say that shares were already retired, nor that they would be preferred shares. And we don't know if Solomon's referring to 90M share EOY meant basic or diluted.
You quote 80.3M shares outstanding as of 7/6. That's common shares. How could it not be, if there were 77.7M common shares outstanding 6/30?
So if there were 87.3 fully diluted as of 7/6 (presumably a bunch more as of today),and 90M (FD) after retiring 7.0 by the end of 2012, that would mean a maximum of 9.7M more shares this year, not 16M+?
Where do you get that they are retiring preferred shares?
Or where do you get "the remaining 1M?"
At the end of Q2, there were exactly 7M more shares, fully diluted vs. basic.
Question:
When Solomon answered that the share count at the end of 2012 (not now) would be 90M, did he mean common or diluted share count?
From the 10-Q, as of June 30, 2012, there were 77,769,893 shares of our common stock issued and outstanding. And more were issued between then and now, as we already know.
Homework was from IR, but feel free to enlighten me.
It's higher if they retired the preferred shares with 0.68 estimated.
Think both revenues and profits matter, though agree profits more so.
The import export distribution is also very important strategically, as it allows volumes that could not be approached if the outlets were only their own retail. Also, this actually does make SIAF an international company, opening the Malaysia connection that much more, and enhancing reputation in China.
As to margin, I'm just guessing at 15%. That's a good question, and maybe someone will ask and post from the investor tour.
I was surprised by the prices people posted about the Norwegian imports vs the indicated retail prices in China.
Perhaps that opens some larger margins?
yes 260MT in 3 weeks means 1.2+ MT/day
1) It's a back up plan, just in case
2) A reverse split will NOT cause harm to the share price as long as the reason is communicated properly. I don't give a rat's ass about Solomon's experience with reverse splits. People need to do their research.
unbelievable 260MT shrimp sold in 3 weeks? when is WSPS ready for ops ?
Appears that Dragon Head designation will help in spinning off to Hong Kong or Singapore exchange, as well as helping SIAF's relations with the Chinese governemnt for all ventures:
The Dragon Head designation is also known as the “Flagship Company of the Industry”.
The government policy for the Dragon Head award states that "Successful economic development depends upon effective leading businesses that not only communicate but implement ideas". The criteria from which a company is nominated to the Dragon Head status includes the following:
- Demonstrate leadership, excellence, and commitment to innovation in its industry.
- Support local, regional, and national government initiatives.
- Conduct business with a high level of integrity.
- Produce a value-added product or service, be highly profitable and have strong financial and R&D capability.
- Demonstrate a competitive advantage, have independent control of its products, and specialise in one or a few certain areas.
- Demonstrate the capability and commitment to advance, grow, and lead their industry forward.
Conference call highlights on operations:
On track to meet $.68; major, this summarizes all
2 new FF and 1 new CF contract being worked on
FF1 to become "Dragon Head" industry
Marketing and Distribution network ahead of schedule
retail franchising still a possibility
260MT import export can be sold in about 3 weeks (4 containers/week out of 13); vast majority distributed vs retail now; Q4 will be "substantial revenues: this now appears a major revenue producer, guessing revenue capacity of $2.6M per month, based on $10,000/MT
prawn farms viewed as a "revolution;" awaits financial sales metrics to expand
baby prawn farm to sell 40M - 50M flies per month, starting now; high value (5 x price) seasonal so start 2013 (I think)
others?
And if you buy 100,000 shares, the deferred dividend is $3,403.40 instead of $3,400.
The entire 6.8% is the sweetener for all new buyers, special for one month only.
If Hyperboy's group is buying 1,000 shares each, it will never matter; 10,000 each might add up eventually to a small difference.
But we really need 100,000+ buyers. Curious what JF says about this policy and the cc publicly and privately.
This dividend policy does indeed make this a very good time for buyers or those who want to add, especially long term holders. And JF seems to have a large 100,000+ buy audience.
Be careful with that quote :-P
Why are you so thrilled with this round up policy that is never worth more than $3.40?
The real generosity is that new shareholders, people who buy between now and 9/25 get the full dividend credit.
And for the record, Lucky and I had this right all along. It's not rocket science; it's been in the works for more than a year, and discussed on conf calls and in presentations.
It is unequivocally good news.
As far as I know (and please correct me if I'm wrong) the plans in the first place were to get a stock divi besides the regular cash divi.
More upside down world stuff, led by RD off the reservation again.
The company came up with an innovative dividend policy, as a shareholder friendly move well over a year ago. Half the dividend would be paid in a convertible note. This saved the company cash, yet still provided a very good dividend yield, quite uncommon for shares in this space. The other half of the dividend is cash.
The company had to jump through hoops to get a good legal way to honor their commitment; they found one, and implemented it. Now you get 6.8% of the value of current shares, increasing to 12% if you hold your shares another year.
How this is bad escapes me.
How do you think people would react if they announced they were scraping the plan and were halving the dividend?
Because they are paying based on the target of 8% of GAAP reported income. Assume $.68 basic * 8% = $.0545.
True, but perhaps not as much as you'd think.
There have been 90 posts today (not counting JN who I ignore), and if the 150 subscribers read all posts, that would be 13,500.
Nonetheless, basically, you are right.
So this forum and others, as well as PR are all valid ways to promote the company. To claim that any aren't and that this retail following just isn't important -- vs. some volume statistics -- is just plain insulting.
This $6,000 would prove a nice down payment on the $40,000+ planned from spin out number one, should it be delayed.
Here's a company that has done everything it has said it would do. It has always seemed to me that the skepticism in the marketplace notwithstanding, the fact that the company has announced a road map to distributing roughly 100% of the current price of the shares in less than two years ought to make it an especially attractive speculation, at the very least.
And as they continue to do what they say they will do, in an upside up world, should enhance credibility that they will follow through.
How is this logic not applicable?
... and particularly applicable given that the road map is understandable, doable, follow-able, and has discrete milestones on the way.
Yes, and if you keep your 100,000 shares for a year, the CD becomes $6,000.
You're right in that you don't get the cash until 6/14. But you do get an asset. And you also will get the cash component of the dividend when announced, presumably next month.
Look, if you own 100,000 shares, this one announcement means you have a forced savings CD of $3,400 you weren't sure you'd have yesterday. And it's free.
You also get this CD if you buy the shares between now and 9/25!!
Viking likes the $3.40 bonus you can get for $.50, but I think it's the $3,400 (or $340 for every $5,000 investment) that provides an extra incentive to buy this month. And again, this does not even count the cash dividend on top of it.
He's just doing what he said he'd do over a year ago. And he's said he'd do this in every conference call since then.
He encountered procedural difficulties, and surmounted them in the shareholders favor.
He has always done that.
Just like the Form-10 and the dividend policy, the uplisting will come as promised. Perhaps not as soon as we'd like, just like the other two, but it will come.
Actually, the only real roadblock -- and a big one it is -- is the minimum share price.
Hyperboy
This presents the perfect opportunity for you to boost your group, as the yield argument will never get better. Buy today and get two years of past dividends almost right away. The dividends in a year will be today's announced $.034 payable 6/14 + $.016 cash next month, plus next year's $.05, half cash. So that's $.10 or 20% yield for the upcoming 13 or 14 months.
It's actually overly generous of the company to pay 2 years of past dividends to new shareholders. I am sure this was the only way, or best way to honor their commitment for half the dividend being paid in a convertible note.
Positive development for many reasons:
1) The company did what it said it would, despite being blocked by months of legal and procedural obstacles
2) They issued a press release, so surely will for the cash portion of the dividend + more likely that the PR ban for material events has been lifted, as well
3) $.034 is nice, with another $.025 coming next year (plus cash dividend)
4) Interesting that they chose a record date of 9/28/12, which entitles new shareholders to old dividends. This must have been the only way to do it. It does create an incentive to buy between now and then (for the few who know and understand)
The question about the 260MT is how many deliveries is it; could be 10 MT every two weeks for all we know.
Any real evidence of Hi frequency trading in penny stocks, and with any shares under a million shares/day. Makes no sense to me.
But if true, would put a huge dent in Chad's self justifications.
The average daily volume YTD is 340,000 shares. This equals 88M shares traded annually.
Question I have is, in the big picture, what % of those shares being dumped from issuance would have what effect on the share price? We talk about these sales of issued shares almost every day, certainly down days.
If we guess that 50% do get sold, even at an average issuance of $.50 that's 10M shares or 11% of yearly volume.
What would that do, over time, particularly against a back drop of 100% revenue and eps growth?
Any kind of metrics on this kind of thing?
No matter what, am hoping that for 2013 issuance, the company has some flexibility to limit the number and to issue opportunistically; that is, after stellar earnings and uplisting being demonstrably near at hand.
Yes, and with the volume of the first orders already made -- even if they are over a 6 month period?? -- they seem to be counting on many new retail outlets.
Hopefully, we get a good idea about these plans in the conference call; better yet, we see new import contracts and multiplying ramping retail sales Q4 over Q3. This will happen even without more outlets, because they will sell all three months.
We don't know what yearly volume SIAF can sell; so can't really "compare." The idea was kind of the other way around.
If SIAF matches $825 s.f. -- which seems generally reasonable (it ain't no Whole Foods, but it is China), then if 500 s.m is retail, that's about 5,500 s.f. = $4.5M year. So 260 MT at $10,000 per MT would take almost 7 months, if sold just at one outlet.
This is just sanity checking with a lot of unknowns:
retail price of the imported goods
% of import that will be sold retail vs distributed outside
how long the import contracts run for
My best guess -- and really a guess -- is that these contracts jump start the first WSPS, and anticipate more retail outlets coming. The WSPS is both a distributor and a retailer. Retail outlets alone would be much easier, cheaper, and quicker to establish.
So, best case is that more retail outlets are already at least planned, and more orders will come, not to mention selling their own goods to and at their own (JV'd) retail outlets or restaurants.
Let's hope that the preponderance of remaining shares are issued, no matter how, after 2013 guidance anywhere close to your numbers, and 2012 results also known on target. Meanwhile, also after uplisting milestones are ticked off, such that a time table is relatively predictable, minimum share price notwithstanding.
Maybe many CEOs are savage, but have any of them retired their own shares?
The retail ramp will be very telling.
I'd like to learn a lot more about the import export and WSPS sides of the business. They will become an increasingly large proportion of revenues.
First thing is to find out how long the contracts run. Then:
1) What % is anticipated to be distributed to non-SIAF or SIAF JVs, like in Malaysia?
2) What % will be resold at WSPS?
3) What margins are anticipated at the distribution and at the retail levels?
4) Are more import contracts expected this year?
5) Are more WSPS facilities or other retail outlets planned for this year?
I thought the contracts seemed like a whole lot of fish, and pretty much verified this by looking up Whole foods revenue psf which is about $825.
Yes, your numbers are pretty aligned with mine. The bad weather for HU was also a disappointment. Perhaps we'll be able to quantify that and other changes on the con call.
Definitely want to learn about the baby prawn farm sales. Maybe Q2 was some kind of one time delay.
Also would like a better picture of the import export contract lengths, and plans for more contracts and more distribution and retail outlets. There will be taxes on these businesses, so net margins will be lower.
Maybe that's a good thing, as last call, someone expressed disbelief at the margins.
The ttm number is meaningless because investing is all about the future
Yes, all these numbers are moving targets with the ones raising projections offsetting the ones dropping.
in the past, you've indicated that the $145M could be beat. I'm wondering what you have now as a best guess total 2012 rev figure, and if you'd care to share any major breakdowns you use to get there?
Would be interesting.
In any case, it looks like the earning target will be easier to beat than the revenue number. Of course, beating both would certainly be nice, as would the share price having any positive correlation.
Solomon needs to emphasize that the shares to be issued are limited and diminishing; best case, he's revising 2013 issuance to 5% - 7% of cap ex, and issuance will be conducted strategically and opportunistically as much as possible to further limit the number of shares.
So the ttm earnings increased by $.08 last quarter, and figures to increase by $.09 +/- next quarter and $.15 +/- in Q4.
My guesses have less for FF2 and more for Baby Prawn construction than Viking, but total for all about the same.
Guess is Phase One, because if you back out the fish sales from the total fish revenues to get the total construction revenues in previously reported quarters, it's always one of the bright spots, total rev number-wise.
Breaking it down by contract is really guesswork; as is when new fish farm construction will start.