I am updating my staus.
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Property Bubble: I got the sense that he meant it's bad for social problems and affordability for young & poor people rather than say emptying the banks collateral.
The need for cheaper properties to help social mobility.
rich
CCLTF - the question seemed to be general question on construction in China but that would definetly be one question I wanted to listen to again.
rich
CCLTF FAQ - given all the uncertainty I was expecting some sort of hedging of management bets. But they seem gung ho - I hope they are represtentative of the Chinese building industry.
I will listen again to the CC but on first pass through I got... FAQ As follows.
FAQ
What is breakdown of building in Tier 1 vs Tier 2 & 3
tier 40% of building capacity
tier 2 to 3 is 60% of building capacity
- ASP between Tier 1 and Tier2&3
About the same.
- Your strong in tier 2 & tier 3 over Tier 1?
Yes.
- Does that reflect historical trends?
2 to 3 years ago we sold more to Tier 1 but seeing how things were going they started to sell more to tier 2 and 3.
- Sales and Marketing - will that increase with the production expansion
Didn't understand
- Tender offer for the warrants?
Looking at structure but they werent forthcoming
rich
CCLTF - providing that they don't feel the necessity to double revenue in Q3 and instead just ramp up production in a cash neutral or, gulp, positive manner.
Without the new facility final payment they would have added 20M RMB cash (US $ 3M) which is what we all like...
Cash and bank balances were RMB 131.9 million (US$ 19.3 million), compared with RMB 150.1 million (US$ 22.0 million) as of December 31, 2009. The decrease in cash and bank balances was mainly due to the final payment of RMB 39 million (US$ 5.7 million) for the acquisition of the Gaoan facility in the first quarter of 2010;
The cc they were talking about looking at the capital structure but understanding what they meant was less clear (I interpreted this as willing to look for other buybacks) - the questioners got worried about dilution but that was the questioners idea and not introduced by management as far as I can tell. At least we know management are savey enough to buy back warrants.
We will see...
rich
CCLTF - ok, so updating your post we ave 24.7 M fully diluted?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=48224600&txt2find=warrants
Here is the breakdown:
8.95M outstanding common
15.55M warrants
1.2M potential 2009 earnout
- 1 M buyback
24.7M fully diluted total
2010 - 1.8M earnout if they hit 31.4M net income
2011 - 2.18M earnout if they hit 43.5M net income
rich
CCLTF - how many warrants they got in total?
The 20F said 15.5M but today they are using 11,803,949... so there were 12 1/2 M... Not for first time I'm confused - are there other classes of warrants or someting?
http://www.sec.gov/Archives/edgar/data/1470683/000114420410027724/v184160_20f.htm
ric
SGZH $50 M of revenues from 1.2M tonnes.. so $42 a tonne - so low quality thermal or they are expecting coal prices to fall off cliff.
Based on our research and information provided, we expect that beginning operation in the third quarter of 2010 will deliver meaningful revenues from the mine this year and upwards of $50 million in revenues during its first full year of operation in 2011.
rich
What about the energy requirements of steel producing companies? Wouldn't they be higher than recycling? So, price of new steel would increase as much or more than recycled steel?
rich
What about the energy requirements of steel producing companies? Wouldn't they be higher than recycling? So, price of new steel would increase as much or more than recycled steel?
rich
Andrew, I'm smart enough not to argue with you. I would be delighted to know your thoughts.
rich
No idea if they will rally but unquestionably they will be prepared to reverse tightening. With housing market they tightened in Spring of 08 and then crash and so they reversed all the policies. They want stability and are pragmatic about getting it.
rich
System mentioned here
China has now adjusted prices nine times since introducing a mechanism in December 2008 that allows the government to revise prices when crude-oil costs change more than 4 percent over 22 working days.
Can't see news stories that prices in china are changing - perhaps good news isn't news worthy?
http://www.businessweek.com/news/2010-04-13/china-raises-diesel-gasoline-prices-4-6-on-crude-update1-.html
Personally, not bothered as we're not, exactly, priced for perfection. We're halfway thorough Q4 so they can try and minimise the inventory.
rich
NEP - for what it's worth. I read that yahoo email about 2-3 weeks schedule and not being the most trusting guy in the world asked if Bill Zima would confirm he sent it.
Me...
Hello Bill,
I read on a posting board that NEP is trying to get their 10-K out in a 2-3 week schedule, see below. Posting boards aren't the most truthful places in the world so I simply just wanted to confirm that you sent the email out.
cheers.
rich
-------------------------------------------
Dear,
Thank you for the email, which was forwarded to me by NEP's management. The Company and its auditors are currently working diligently on preparing and finalizing the 2009 quarterly financials and 10-K financial documents and require additional time for the review. They expect to issue a PR as soon as all parties finalize the reporting date, hopefully in the next 2-3 weeks. Once the 10-K is filed, it will become easier for the company to discuss its 2010 operations and opportunities.
Thanks for your support and patience.
Regards,
Bill Zima
Reply from the Billster (William.Zima@icrinc.com)
That message is accurate as of today.
-------------------------------
So Punk do you feel lucky?
rich
(obviously, I said that the punk thang and not Bill)
CKGT - Fair enough point, so, for the people who haven't read the 10-Q then?
have people actually read the 10Q???
Day is almost over, thank god... CELM up everything else down, sigh.
rich
CKGT - indeed but, ultimately, the GAAP earnings don't matter. Even though it confuses people a lot.
The last time this was discussed the board came to the conclusion that Non cash chargers, and other nonsense, were ficticious accountancy charges - I think CKGT was an example and certain people were saying that they made a "loss" and everyone was scared before opening, however, after a few minutes sell off CKGT was back again.
I don't see how the board can now argue it's made extra "profit" and that it should be treated as "real" profit.
I think what we've witnessed today is people running away from what they perceive as "risky" stocks, not US, rather than looking at long term value.
rich
CKGT - not how I read it. Income from revaluation of Series A Preferred Stock - you have to discount that bit, 1.5M from the final total.
Perhaps I read that wrong?
http://www.sec.gov/Archives/edgar/data/1017699/000114420410028043/v185275_10q.htm
rich
CNAM - they look like they have 100% untilisation in Q4 but would it be fair to say "looking beyond that is speculation?"
rich
I think the government sets the price of oil in China. They just get to buy it at a discount. If the government lowers the prices then they will lose out on their inventory.
Others correct me if I'm wrong....
rich
LLEN - well they are on record for doing a round of new mine buy and upgrades. So, I expect there will be some dilution, as you know, thus far they have been very sucessful at purchases - using a few million for each mine. The new mines they say are bigger and they also say that they picked lowest hanging fruit already. So, it could be more expensive this time around? Dunno. $15 M cash and the mine they sold for, think, $6M in cash coming in installments.
Anyway, we can see their earnings estimates are low. I don't see how they can spend $15M + financing and end up without making more EPS. But hey, lifes full of surprises.
rich
LLEN - think they are holding back there - as we all know they are going to do $1.10 ish for FY10. They have a run rate for the last 2 quarters of 33 and 34 cents - it's not unresonable to assume it's in the $1.20 to 1.30 range already - they sold that coking mine so perhaps some of that earnings need filling in?
If we do the same for revenue they have run rate of $140M so $218 would be a step up.
Hmm.... either lower net margins or they are sandbagging.
rich
PUDA - that's a PR dated March. The consolidation won't be attempted till they finnish 2 ongoing thermal projects. Last March CC they said that was going to be in 2011. I don't know if that's changed.
I know they have 18% Jianhe Project - don't know if they get any revenues from that. The comments in Revenue section of 10-Q only talked about washed coal.
http://www.sec.gov/Archives/edgar/data/1162747/000114420410027966/v185310_10q.htm
rich
CELM - yup, agreed. Though, it will probably visit the 6s and 7s just for old times sake
rich
CCGY - they are still ramping up the facility, 50% by end of Q2 and 100% by end of the year. So, I'm wondering if the margin can improve. Even if they didn't isn't they manged 3 cents this quarter so wouldn't 4 to 6 cents a quarter on the cards? For 85 cent stock?
rich
CELM - management gave 0.16 to 0.17 and they hit 0.16. Reading yahoo boards they were hoping for more - so yes, bad day for CELM holders.
-- And joko meant reiterated,
Oh yes, I know but it's kinda important to clear that one up!
No, can't do much about EPS that was done and dusted with the IPO. Obviously, that money is being put to use with the new facility.
They made 3M this quarter and low estimate is 3 M for Q2. Low estimate is 17M net for the year. Means that 11 M for second half. In 2009 there doesn't seem to be much seasonality could be looking at 20 - 22M run rate from Q3 onwards or $1 earnings.
The balance sheet is clean as a whistle and it's a play on domestic spending in China which should be multiyear growth thing.
There's better stocks than this but there's a lot worse.
rich
CELM - they have not retired guidance!
Management confirms that it expects revenue for fiscal year 2010 to be in the range of $110 million to $120 million and net income for fiscal 2010 to be in the range of $17.1 million and $19.8 million.
They are opening a new factory in June - that's when they can beat their numbers. The numbers hit the low end of the 0.16 to 0.17
No doubt there will be vast swings with the stock - the aim is 82 to 95 cents for the year.
rich
PUDA: Hot damn eom
rich
PUDA - ok, thanks Bogus, so that suggests that earnings estimate includes some mining. Hopefully, they can give an idea about the washing margins going forward - clearly it's a large impact on earnings - if they maintain anything like 17% and what they did in years other than 2009 those numbers are looking beatable - assuming the mine is opened for the second half of the year.
rich
PUDA - I suspect, now, guidance was mainly washing revenue - I think they gave the gudiance at presentation at start of March [1]. When people asked them when they were going to be mining they weren't sure - in fact they said May would be the earliest they would get approval and wouldn't be nailed down to a date. Yet, they managed to give a EPS range of $1.10 to $1.52. I don't see the point of putting an EPS range that you not confident of beating? Who can be confident on the workings of government?
I would expect upside to earnings if they get mining by second half of the year.
[1] http://www.sec.gov/Archives/edgar/data/1162747/000114420410011668/v176331_ex991.htm
rich
PUDA - if we look at the gross margins I think that the slowdown in 2009 was the odd result. That said to be conservative you could work around 2008's 13% margin?
I think most investors expected margin expansion last year. I am surprised it happened between Q4 09 and Q1 10. I was expecting a gradual buildup.
2010 Q1 17%
2009 8%
2008 13%
2007 17%
rich
http://www.sec.gov/Archives/edgar/data/1162747/000114420410017458/v179487_10k.htm
PUDA - not 1 cent from mining coal - they are still waiting for approval. From last CC they won't be mining until approval.
Pre-construction activities at these two mines are currently underway. We are working closely with the Shanxi government and expect to receive approval for the business license transfers for all eight of the Pinglu County mines in the near term.
http://finance.yahoo.com/news/Puda-Coal-Announces-Strong-prnews-3670541632.html?x=0&.v=78
rich
LLEN or NEP - NEP has good chance of a 20%+ move assuming it gets its 10-K in. They mentioned in a PR that they were going to discuss their expansion plans - I think the market would like to see a new oil production lease, but, they have been waiting a while for that - management have had offers but are, rightly, picky about their choice.
LLEN should be praised for improving the way they add new mines. By leaseing "young" mines that can have their capacity upgraded from managers that need either their expertise, or more likely, their cash to develop the mine LLEN is getting a portfolio of mines for a fraction of their true earnings value.
LLEN near term may offer price weakness from stock/warrant sales that were finalised last fall. That said, July they should announce FY and between then and fall of 2010 annouce a number of mine consolidations - they are aiming for larger mines. The recent presentations were very bullish he said 70% rev growth and off-handily said and I bet we manage 100% - I'm not betting against them.
My conclusion - near term I like NEP assuming they hand their homewok in - Mid term they may annouce a new oil production lease. LLEN are, with high confidence, going to annouce new mines before, say, Dec - shortterm no view - Mid to long term looks good. If I had to buy and hold 1 it would be LLEN since they have explained their plans and I like them.
rich
YONG - bit I liked was the doubling of sales only had 30% increase in receivables - they said this was one of the things they wanted to improve - so I'm keeping eye on it.
Also, in 2011 they will have more manufacturing capacity so won't have to run up inventories so early in season. Improved cash handling in 2010 and 2011.
Course there's the mine as well
rich
CCLTF - Yes, there's nothing wrong with saying P/E 3 "get at 'em".
However, many investors are going to see "housing" and go "no thanks". I would have addressed that issue straight off as I, and many others, think the perception is overly pessimistic. Ahem, that was my only point.
I wonder if we could get Chanos to endorse CCLTF?
rich
CCLTF - Despite that, the current valuation is too low even accounting for that potential risk.
He he, well he hasn't specified why he thinks the risk is overdone - investors are big on whys not so big on being told not to worry.
The Chinese shorters have made a property the central plank of their theme and any investor needs to have reassurances on that. His two points for low valuation are SPAC and OTCBB and I think that these are secondary to the housing market.
ANYWAY, I don't want to appear picky as the piece helped me understand the company better.
rich
CCLTF/CCLWF - like the article but he needs to have mentioned about the housing market. I think, and I can't be alone here, housing is reason CCLTF is down where and not the SPAC confusion. It's not like Chinese stick tiles onto the outside of their cars, more's the pitty.
Obviously, investor perception is negative at the moment but there are reasons to believe that PRC has to build more affordable housing while trying to remove the more speculative buying of houses.
There is a mexican standoff between PRC gov, Developers and buyers. I suspect when the smoke clears building will begin again.
"If property developers deter construction or stop buying land to save cash for market uncertainties in the second half of 2010, then the market supply for 2011 will largely shrink, worsening the already poor supply-and-demand relations," said Ren Zhiqiang, chairman of Huayuan Property.
In Beijing, for instance, only around 40,000 apartments are currently available for sale, much lower than the typical 100,000 units for sale, he said.
rich
http://www.chinadaily.com.cn/china/2010-05/11/content_9831967.htm
China to ban smoking in public spaces in 2011
http://www.chinadaily.com.cn/china/2010-05/10/content_9831543.htm
rich
Just did search on CGS - there does seem to be some people mentioning it which is strange given it's not, in any way, related to China.
rich
Yup, It was a bad investment idea. The dependence on one client requires a significant discount to earnings. Obviously, if it gets a second client, possible in July time frame, that might be a different matter, however, without that it's less investment and more of a gamble.
The company ended up being shorted and the rumour being that they weren't going to get a second order - dunno unless you have industry contacts your in the dark.
rich