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Regarding Q3 FF construction revenues, my guess is very similar to Viking's in total, a little higher.
The Q2 10-Q was chock full of good news, but did have two items of concern. One was weather impacting HU sales in Q3 and Q4. This is a shame because perfect weather would have yielded sales well beyond the most optimistic projections, as the sales price was dramatically higher than last year.
The PF2 revenue was the second disappointment, as the company had signaled $8M - $10m in 2012 sales. They are obviously nowhere near tracking that. Perhaps this is because of the new, much larger construction schedule. But I doubt it. Sales always figured to be backloaded, but this much seems a stretch.
Total revenues do appear on track to guidance. Both trajectories are good cc questions.
Personally, I think $130M in revenues would be quite impressive.
On brighter notes, net margins and eps appear to track to guidance even better than revenues, and the company appears ahead of schedule on he import export and distribution/retail businesses.
Please think about what you post.
If they wanted to charge up front costs to build a kitty available to exercise options to buy equity -- even pre committed equity purchase, they would not do it by contracting over billing; they would simply charge for licensing the proprietary technology, or something like that.
C'mon, you have to hold Chad accountable for what he says.
Chad did not mean that PR would have no effect on the share price. If that's what he meant, that's what he would have said. That's what YOU mean. By "fluff," he meant fluff. And they absolutely were not fluff.
Much more important:
You can say anything you want on a public forum; HE CANNOT.
Thanks.
Okay, fair enough. Still, in that case seems that the profit margin will be higher. The majority of tonnage is peeled shrimp from Viet Nam and Cambodia. Any idea what the wholesale prices there are? And the retail prices in China?
Wonder why the farm and restaurant and WSPS contracts are 10-Q addendums, but the impost contract is not.
But they aren't fluff.
And the logic that if issuing PRs doesn't help means that not issuing them will simply escapes me.
I think that all loyal longs are here because they believe at some point this upside down world of p/e's under one and good news is more unbelievable than bad will change at some point; that we will get 1/3 of the way to something normal.
We can argue about what that will take; dual listing vs. $200M revenues vs. cash flow positive and the end of share issuance vs time for all the Chinese stains to wash out, etc.
But I'd argue that as much information along all those lines presented in a timely fashion to as many audiences as possible has to help credibility and marketplace perception over time ...
to resemble the entire rest of the investment world, where good is good.
I don't disagree that good news has not helped the share price in the past, but if you don't believe that will change, SIAF is the greatest short in the world.
The deeper debate here is how the fundamentals need to relate to the share price in a greater absolute way than the supply demand characteristics of the day to day trading.
Well, I certainly agree, as that's almost exactly what the post you're responding to says.
The timing of the additional contract is unclear; up for debate.
In my original post, I guessed that 1/2 of the second contract may be supplied in 2013 (after all, the contract was signed in March, 2012).
But it may be 0; all 600,000 fish in 2014; that's the worst case.
Support for this strategy is that the shares did go up from $.62 to $.73 immediately, on about the first 500,000 shares of trading.
It appears to me that flippers or holders of issued shares were hoping for a positive report to sell. There's no way to know whether the same thing would have happened on a smaller scale every time an issue were released.
btw, every contract was signaled and anticipated in the first quarter report and conference call, except the baby prawn farm size tripling. For even that, a phase three had been talked about.
I'd rather see press releases as much as possible, but even without we can see that the company does follow through with execution.
Even RD noted this trading pattern in YONG after a good but lesser report.
Isn't the price of the grow out fish supply fixed? The contracts run through 2014.
So the margins would be hugely effected by drops -- or rises -- in the wholesale price, until grow out fish were supplied from new contracts.
On the company web site:
http://sinoagrofood.investorroom.com/index.php?s=43&item=16
I think that "the existing grower" that I quoted in the second contract announcement refers to GJAC, the first contract.
Probably so; therefore, I think your 2012 estimate is high by about 250MT, but 2013 is unaffected:
650MT for 2012 $17.7M (H1=$5m, H2=$12.7) important to note that SIAF's share of the profit is now 75%!
1,200MT for 2013 $32.4M
Should point out that there may be a lag period for the fish to grow out, such that some 250g contracted grow out fish paid for in 2012 are sold as 550 g fish in 2013, etc.
Some chance that your fingerling estimates are low, because they take so long to mature we haven't seen results yet.
There have been two contracts for the supply of external, grow out fish.
"The (first) contract between GJAC and EAPF is for the supply of 500,000 sleepy cod ranging from 150g - 300g in 2012 and 800,000 sleepy cod in 2013. The contract also includes the supply of 250 tons of bait fish in 2012 and 500 tons in 2013."
(The second) "new grow-out contract with the existing grower for an additional 600,000 fish was executed in March 2012 and will remain in force through 2014."
This indicates that about 500k grow out fish equating to 287MT of sales are available from contract one in 2012. Not sure what "remains in force through 2014 means (through 1/1/14 or 12/31/14).
But splitting the difference 1.1M fish will be available to FF1 equating to 600MT of fish sales from grow out in 2013.
They ALSO get fish from the open dam: from the Q release, so 2013 grow out volume will be that much more than 600MT in 2013, sufficiently more to make the 1,00MT goal apparently pretty easy, assuming a decent number of fish grown fully from fingerlings.
"During the quarter ended June 30, 2012, there were over 300,000 sleepy-cod fish taken from the open dam farm, of which 149,000 were transferred to JFD for further grow-out, and the balance of 151,000 (average size 514g/fish) were sold by CA to wholesale markets in Guangzhou City, PRC.
BEFORE this second contract SIAF indicated:"we anticipate that Enping A Power Fishery will be able to produce a minimum of 500 Tons and 1,000 Tons of sleepy cods at minimum marketable weights of 500g /fish in year 2012 and 2013, respectively, thus eliminating part of the growing risk involved in the growing from baby fingerling to 300g per fish."
So the second contract can only add to that 2013 estimate. In any case, the number of fish sold raised from fingerlings will be important.
The prawn and baby prawn sales will have a very different trajectory.
Yes, I caught the 5x revenues from high value; will be nice when it kicks in. My one reservation is if this type of revenue per unit weight was in the original revenue forecast.
I said -- derived from your figures -- 440MT for the whole year, comprised of 180MT (first half) + 130MT (Q3 rotational only) + 130MT (q4 rotational only). That's 180 + 130 +130 = 440.
Sorry for any confusion.
So with 200-250 H2 from fingerlings, guess/projection is total FF1 2012 fish sales is 640MT - 690MT. It's the meaningful concluding figure for me from your original post. This is what I was looking for. Thanks for your guess/projection.
This scenario would be a quite positive outcome. Would generate at least $12.4M revenues in the second half vs. $4.86M in the first half.
It would also indicate a projection of at least 1,000 MT in 2013, as the second half would annualize at 880MT to 1,020MT.
In the addendums to the 10-Q.
I find the $250/hr reasonable and encouraging. Reasonable because they are engineering a patented system, and encouraging because it makes the margins more believable.
Yes on what first part?
The theory I'd more embrace is that the dumpers of issued shares that wanted to gt out at $.60 hoped for , an got a quick jump to $.72 on a great report. This allowed them to sell more shares all the way down to where we are, averaging $.60.
I like this theory because it implies we'll move back up before the cc, which may create the exact same dynamic.
Eventually, the issued shares will be sold (in time for the next batch).
These are all just guesses, imo.
SIAF does have major distinctions from all Chicom companies:
1) much better growth: revs from continuing ops $11M to $52M to $130 minimum to ??
2) CEO retires shares; Australian national I believe with Aussie Malaysian bus experience
3) Dividend
4) Jordan Fund
5) Dual list plans
6) Spin out plans
7) Understandable scalable and vertically integrated business model(s)
8) High net margin businesses, in large part because there are no taxes
I'm hoping -- with limited confidence and no hints -- that Solomon had more tricks up his sleeve.
First, much better pr about milestones tracking well laid out operational and financial milestones, and uplisting/dual listing milestones should help.
The distribution network and whole retail integration, including import/export and being the restaurant chain supplier is moving pretty fast. This could have a major impact on revenues Q4 and 2013. Would really like ti now how long the import contracts for 80MT and 260MT are for. If this becomes a quarterly thing, it translates to big numbers.
Another "trick" I'd love to see is Solomon saying that he's decided to limit stock issuance to 5% - 7% of 2013 cap ex, and that he'll execute it opportunistically.
Surely there are other possibilities, including applying for more loans, restructuring longer term from suppliers or JV partners, etc.
Some new mini Jordan Fund wouldn't hurt either, nor a new 5% stake by anyone.
FF!
So, you're saying 180MT done; say, 130MT from rotation in Q3 and Q4 = 440MT + 2nd half sales from fingerlings.
Any guess on those?
The demonstrate ramp for the first farm will be crucial for several reasons:
1) a model for other farms
2) hopefully, as a learning ground to improve ramp at other FF, esp., sleepy cod FF so improve later ones
3) assume prawns are a better ramp, as don't need rotation (right?), yet on a 3 month cycle
4) the more sales, the quicker the ramp, the better the spin out value
I'd be happy now with 650MT full 2012. Seems doable??
In Q2 fishery gross profit was $9.2M on revenue of $15.8M, or 58% gross profit margin.
Yes, I imagine so.
I think part of the reason for importing is to have diverse products to sell at their own stores, not just their own products. Carried beyond what we know now, the aim is to become a Whole Foods like chain in China, supplementing stock with either their own brands or by their own JV supplies.
I'm not a trader, and don't follow level two, or anything like that.
But it sure seems to me that it most often takes a lot more volume to move the shares up than down. Yesterday was a case in point. Can the people really watching the trading confirm or refute this?
If it is true, why? and what does it mean?
Looking forward to discussions about how the company is creating synergistic divisions.
The import contract is huge, imo. It jump starts the distribution network and the retail outlets, so that perhaps $5M of goods can be distributed to retail adding $6M to revenues and then sold at retail, adding another $7.5M. Better yet, the facilities are in place to buy wholesale from SIAF JVs.
Complete guess at the figures and margins, and don't know how long the contract runs. Good cc questions.
Likewise, the apparent expansion of the WSPS and restaurant contracts put retail outlets in revenue producing play.
SIAF signs contracts to import more fish than they've sold in the history of the company and the IR rep says that the company doesn't deem it material.
Are you kidding?????
This is the IR Rep calling his own management idiotic, or worse.
You've got to be a lunatic to do that, or should I say "Laluna."
This is not good for the company. Even if it was the company's decision not to issue press releases -- which does not extend into the future as implied -- what good is it to blame your own company publicly?
If the guy has to post -- which is probably a bad idea even if he were professional, ethical, and added value -- why is it about himself, and defending his ideas about traders and investors and liquidity? This on a day when the company makes several complicated, strategic, and absolutely material disclosures. Why not post about one of those?
How do you know what SIAF would pay, as the restaurant's NTA would also grow as they established 50 restaurants?
Maybe if SIAF exercises early?
Any basis for $1M a year in revs?
Also, the contract said the chain plans to open more than 50 by the end of 2013, not even 2 or 3 years.
Then don't imply that there won't be pr in the future.
And what the hell does this mean:
Investor Relations (US and Europe)
Mr. Chad Sykes
Chad.Sykes@sinoagrofood.com
I agree with your thoughts on promotion. I think just about everyone except the guy whose job it is does. Even if there is some reason, he shouldn't come on a public board defending himself, implying more of the same.
It's a shame; so much good fundamental news to discuss today.
Have to disagree with this.
I have no problem with Solomon. He's running the business just as he's said he would. And with all that's going on, that ain't easy.
I agree that more publicity and promotion is due, and that should be asked on the cc, politely, imo.
Frankly, I think we will get a positive answer.
I have no idea why the IR rep sees fit to post publicly about;
1) forget the summer (before the summer offically starts!)
2) liquidity is everything
3) continuing to ignore calls for press releases; even eschewing them (thought promotion was a good part of the job)
4) soliciting into his personal nascent, private company -- possibly diverting increased investment in SIAF from loyal investors
Maybe I just got the title wrong; it's Investor Alienation Rep.
Absolutely!
A higher share price is in the company's best interest.
With as much respect as I can muster, a company's Investor Relations representative must relate to its investors. Those are the words!!
There is only one IR rep in the world that would eschew press releases of material events. This is patently absurd.
To say on the first day of summer that the reason for poor share performance and why there will be no releases is because of the summer -- on a public forum -- is just derelict for a company representative, as far as I can see.
You can have your views about liquidity.
Every company in the world issues press releases; they like to promote good news. SIAF has in the past, and I thought perhaps took a hiatus with the view that they would resume after earnings and with the cc and investor tour.
I cannot believe that the the IR rep goes on a public forum and from my view purposely antagonizes investors. That is not relating to investors, something everyone thinks is the Investor Relations job.
So, maybe the company needs two IR reps: one to promote the liquidity and one to issue press releases.
Hell, I'll do it.
CC,
Glad to hear it. So, what are the other tools that are being used?
btw, GREAT report yesterday, even a day early.
Look forward to cc and investor tour info.
LL
Thanks for breaking out the game changers.
If this restaurant company establishes anywhere near 50 restaurants, the purchase price of 1.25x current NTA is nothing. Little unclear when the options are exercisable.
Small quibble with the size of the WSPS: the refrigeration component is cubic feet, so 2.5x original plan rather than triple.
We are seeing the genius of the original vision unfolding, with the retail end stepping to the forefront faster and bigger than certainly I anticipated.
I said revenues of $6M. So, yes, SIAF sells for $23/kilo. Why not; Sleepy Cod is more.
So, my real question is how long will it take to sell this volume? Is this a contract (or several) for 22MT per month for a year or 85MT per month for a quarter?
Just how fast are they bootstrapping the distribution and retail businesses?