I am updating my staus.
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SKBI, CFO - look what happened. They had a part time US based CFO and in the 10-K they admitted that their accounting of transactions wasn't up to scratch.
They need a full time CFO whose on the case. Not sure if US or China based CFO? ANYWAY, thank you but goodbye CFO and, frankly, good riddance. It was a positive move by the company.
rich
Where we are?
1) Lots of expensive houses being built
- there is a demand for them still
- mortgages are being made more difficult as price increase
- selling land feeds local government
2) Some affordable houses
- there is a massive, massive, demand for them
- mortgages are possible esp for first home
- this is what they want PRC gov want developers to build but developers want to build expensive flats
3) Restricting Purchases
- aimed at speculation 2 or 3 rd house looking to restrict
- some sort of property or estate tax
- PRC is coming up with different way to differentiate between people wanting a house to live in and people wanting to make money from houses.
Is that the Orthodox view on the board?
rich
Another minister responded to the original, confusing, comments... seems to be about not making enough affordable housing.
Beijing - The skyrocketing prices of property could harm the financial security and social stability of the nation, a senior housing official warned on Friday.
Qi Ji, vice-minister of housing and urban-rural development, made his remarks in response to claims made by his colleague, Chen Huai, that it will take 30 years for China to make homes affordable for its people.
http://www.chinadaily.com.cn/china/2010-05/08/content_9824811.htm
rich
A Property Tax is Coming ... But Not as We Know It
He said, currently China's urbanization ratio is at 50 percent and will reach 60 percent within ten years.
The amount of people included in this 10 percent increase in urban population is equal to the population of a moderate sized country.
With a large number of rural residents pouring into cities, the demand for housing will greatly increase, creating a huge rise in real estate tax income which can serve as a major source of revenue for local governments, especially at county or district levels.
Note: Economic observer claims to be independent & is quoted by Economist so I will give some creedence to this view.
http://www.eeo.com.cn/ens/Politics/2010/05/01/169086.shtml
rich
China needs three decades to make homes affordable
I've re-read this article a number of times. I don't fully understand it. If you do please comment. Basically, the gist of the bloke in charge is that they need to keep building, cheap homes at least, for 30 years.
According to Chen, China has built about 70 million residential apartments in its urban areas in the past decade, which equals to one-third of the households. The figures indicated that only three or four out of 100 households moved into new apartments each year.
"China faces a severe housing shortage," Chen said. "Even if apartments didn't cost any money, four units wouldn't turn into 70 apartments."
http://www.chinadaily.com.cn/business/2010-05/07/content_9821524.htm
rich
What governs the release of shares?
I was looking at the 8-K and searched for "days" and restricted and the like but not seen any smoking guns - I am assuming that release dates are put in somewhere?
http://www.sec.gov/Archives/edgar/data/1111817/000101376209001973/form8k.htm
rich
Hmmm... thank you for your post - the thing that stopped me buying into it was the dilution - as discussed this commentary. Obviously, this is something you've considered.
http://chinaotcplayer.blogspot.com/2010/01/spotlight-behind-sinobiopharmas-stellar.html
I can see that having additional drugs is good and I like the fact that the drug they are selling is used in Western Medicine.
I guess it's how much you trust the management to build EPS rather than diluting. Have you contacted them? In the end you accept that this is a gamble with a high payout if it goes right?
rich
CD:Property speculators yet to feel the heat
http://www.chinadaily.com.cn/business/2010-05/05/content_9811158.htm
rich
SSE +0.77% (2,857.15) - surprisingly strong. eom
rich
Hi Steve,
Thanks, that makes sense. I don't think of this company as a technology firm - though there is an aquafarm patent. Something to think about I guess. The company needs to outline where its going with this and what are the timeframes - I suspect they dont know themselves quite yet
Thankyou for a full response.
rich
For the innocent on these matters why do we know they were buys? As the price went up?
These are not typical after hour trades? I thought, once again innocent on this matter, they were MM's settling the books?
rich
It's a an interesting development. Surely it's only a game changer if they can make money out of it?
They work in warm climate - so it doesn't help them. Are they going to sell the technology?
rich
The data out of China today was terrible?
Which data was terrible?
rich
LLEN - PR'ing news of information known to the market results in, I find, temporary pops. I hope to be wrong! As you say it was $12.5 last tuesday so clearly there's an argument for a bounce.
I make no comment on the company or long term direction of the stock. They have managed to refine it's aquisition techiniques for which it only deserves praise.
Right, I've already said, quite, enough
rich
LLEN - as a long and to be clear. Their guidance has been "piffle" for a long time. Adding coal mines which are going to be upgraded during the year and not updating the guidance might be convenient for them but leaves the market completely bewildered.
They had done 80 cents in 3Qs and done 34 cents in the last Q. The market is expecting in the $1.10 region and will be unmoved by the announcement which states what it already knows, 96 was going to be beaten soundly.
Near term problems:
- unlocking of warrants and the like over next 2 months
Medium term
- Good results for FY mid July
- Russell list
- More and bigger mines by the fall
- 2011 guidance
My comment: I think that they will increase revenue again in next FY by at least 70% and possibly more (that was their banded about aim during a recent presentation). P/E which is sub 10 for this year is a joke as this company should increase it's EPS again this year but, hey, T.I.C.
So, I'm figuring good things come to those who wait, sometimes. Might be on people's watch list over the next couple of months?
rich
Sales Volumes: Cheers Tenenbaum, in the paragraph before it was price - then they talk about volumes. Sigh, a decline in volume is hardly headline stuff given uncertainty.
Thanks for clearning up my confusion - I've re-read it and that's clear now.
rich
CCLTF - China Ceramics: Play on the PRC’s Construction Industry
Got email from CCG....
China Ceramics (“China Ceramics” or the “Company”, OTCBB: CCLTF) is a leading manufacturer of ceramic tiles in China. The Company's ceramic tiles are used for exterior siding, interior flooring, and design in residential and commercial buildings. China Ceramics' products, sold under the Hengda or "HD" brand, are available in over 2000 style, color and size combinations and are distributed through a network of exclusive distributors or directly to large property developers.
There are very powerful long term trends supporting the construction industry in China. Last year the Chinese government announced a RMB4 trillion plan to stimulate the economy and support China’s continuous urbanization. Despite the rapid growth of urbanization in the past decade there is still significant growth potential in the years ahead… Some analysts forecast that 350 million people will move to cities and five million building will be built by 2025, and the Company expects that growth in population and increase in living space per capita will provide additional support to demand for construction material.
China Ceramics has a consistent track record of execution, strong brand name recognition that has received many coveted awards, deep customer relationships and our management team which has over 20 years of ceramic tile industry experience.
China Ceramics’s total revenues in 2009 were $128.7 million, up 22.1% per year over the past 4 years. Adjusted net profit was $26.2 million in 2009, with a net margin of 20.4%.
China Ceramic’s business plan targets net profit to reach $62 million on revenue of $276 million by 2012, representing growth of approximately 35% p.a. The capital expenditure required reach those levels (in addition to maintenance capex) is approximately $40 million.
To view China Ceramics’ investor PowerPoint, and corporate profile, please go to:
http://www.ccgirasia.com/content/china-ceramics-co-ltd
CD: Real estate sales witness big fall
Some big numbers... I assume that's % price fall and not volume fall?
Hit by the measures, property sales in major cities tumbled. Data from the China Index Research Institute showed that Hangzhou, capital of East China's Zhejiang province, saw a 72.55 percent month-on-month plunge in sales during the week ending April 25. Beijing witnessed a 45 percent fall while in Shanghai, the drop was 38 percent.
rich
http://www.chinadaily.com.cn/business/2010-05/03/content_9803312.htm
Cheers RedStick,
I normally rely on the idiot annotations that tothe puts onto the graphs. Which bit of the graph is the obv? Top one is RSI, the middle one seems to be moving averages and the bottom one volumes. Very intreguing.
Still I think it's good that all types of shareholders are selling - perhaps people are trying to sell out to buy in lower? Hmm... always the optomist.
rich
Howdey Kuwlness... could dilution include the registered holders selling? Something like preferred holders converting, say? Or something else?
rich
In the time it took me to write it was back to -3% - clearly I need less chatter and more concentration.
I'm hoping they have millions of these to sell before the record revenue and earnings come out in two weeks - sure makes sense to me
rich
The most likely is that institutions got their shares on the cheap are in the process of liquidating some or all of their profits (see traders reply - altered my reply to avoid confusion).
There might be alterior motives but it seems daft with the results of the new plant coming out Mid May - unless they blew up the plant or something - unlikely I feel.
rich
LLEN - has options - nothing that looks tasty eom
rich
You definetly need a certain number of shareholders in addition to the $4 Naz and $2 to $3 of AMEX.
I have no idea if this is an accurate amount of shareholders but lets say there really is 90 ish shareholders - it would explain why the board sentiment is so important to the pps - it's pretty much us
rich
Looking at the 10-K
As April 12, 2010 there were approximately 92 shareholders of record holding a total of 20,740,762 shares of common stock.
Says there's 92 shareholders - I think there has to be 300 or something before we can uplist. Think we need some exposure.
rich
Guangxi relieved from prolonged drought
http://www.chinadaily.com.cn/photo/2010-05/02/content_9802355.htm
No detail. Yunnan probably still affected then?
On advancement note: Reminder when seeing pictures of farmers using oxen for transport you got to think what would a tractor do?
rich
China's central bank to raise 0.5% reserve ratio
BEIJING - The People's Bank of China (PBOC), the central bank, announced Sunday it will raise the deposit reserve requirement ratio (RRR) for financial institutions by half a percentage point from May 10.
http://www.chinadaily.com.cn/bizchina/2010-05/02/content_9802274.htm
Largly expected: each wratchet up means banks have less money to loan and more reserves - which at the moment seems a good thing.
rich
Hello gpg,
-- What are you thoughts as to where LPIH should settle after uplist? $4 to $4.50 range???
Ha, ha, well, excepting predictions of price within a time frame is a fraught and typically embarrassing process. I'll give you a quick answer....
Investment Overview
When I am thinking about an investment I think about the Macro and company level.
Macro Level
China has been tightening and this has made the markets pessimistic on China since they were announced (mid Jan). Oil usage is expected to increase and China is going through extreme lengths to secure as much oil as possible.
I worry about the usage of oil in China - perhaps they will move quickly to high electric car usage by 2020? Dunno, but I am expecting that they will just use the oil elsewhere. The per person usage stat of US per person usage,69, 10 times Chinas usage, 5.7, is one to set the scene[2].
Company Level
Oil demand could easily be a separate posting by itself. What we can say is that China's usage per person is a fraction of a developed nation and that we should expect that differential to diminish. I was also happy to see the new plant had different types of clients - coal powered stations, ironically, was a big one.
Macro + Company = ?
Can't do much about the China tightening and we can see that oil demand held up well during the downturn anyway. Oil distribution is not sexy but the demand will increase in the near term.
Fear of the New
Markets seem to ignore new plants until they see the whites of their eyes, or at least, some results - I think one of the reasons is new plants can have delays. However, the discounts seem to happen again and again and, for the patient investor, will offer good returns.
CCGY which was 30 ish cents a few months before the new plant is open, it's at 70 - 80 cents now, which is basically around P/E 10 for the old plant's earnings. The new plant should add, I think, 150% of the capacity.
CNAM - the value of the new plant was put at 0 until the first contract came in - it shot up from $5 to $10 and back again to $5 - I believe that once again the market requires earnings to be spelt out to it.
SKBI - the vaccine facility will double income, and boost cash flow, once full operating but it's opening in June and we are at low P/E.
PUDA was $5 until everything last item was in place for the new mines - where upon it moved to $10 in short order.
The lesson is that markets move late on these matters, however, once sustained increased earnings are in place you should expect an appreciation of PPS.
Uplist -
The affects of uplists can be dramatic and varied. I honestly don't know how this is going to be taken. Hey, I hope we're at $2.50 on first day on the AMEX - short that . However, I don't see why a stock growing earnings shouldn't trade at least P/E 8 and for 2011, beginning July 1st, that 71 cents or $5.70. Now, I am of the opinion that P/E of 8 for 2011 is a joke but there's no point wittering on when the pps is $2 and change.
Conclusions
I dodged your question! I hope I gave an overview to my thinking on this stock.
In the short term I give no opinion - look at what happened to BSPM to see the vagaries of fate in the short term. However, China bringing real estates under control, the new plant, and the uplisting should provide an increase in PPS.
I will be holding until I can find a stock with more upside potential - I've got to say this one's pretty good still. P/E < 4 on FY 2011, beginning July 1st, it won't stay down here forever. My hope is that midway through FY 2011 we should be on the Amex and on a runrate of 70 cents for the FY and have corresponding P/E of 10 or more or $7. That said, we should all realise that there are many caveats but as investors we can run a bus through the difference the market is offering us and what we think it is worth - my only prediction is that this stock will beat the market over the long term.
rich
[1] http://finance.yahoo.com/news/Longwei-Petroleum-Announces-prnews-2935329698.html?x=0&.v=1
[2] http://www.nationmaster.com/graph/ene_oil_con_percap-energy-oil-consumption-per-capita
Average volume in April was 289K [1]
News yesterday, 28th, led to volume of 235K and previous to that April 1st (980K). Certainly the recent news led to no volume exposion compared to April 1st.
Today's volume is, with 2 hours to go, at 100K. So far, not high volume.
The stock is certainly acting like fertilizer though, shame we can't sell it to wal-mart.
rich
[1] http://finance.yahoo.com/q/hp?s=SIAF.PK+Historical+Prices
Economist: Electicity & Devlopment in China (+loans)
Totally mind boggling increase in Electicity.
Capacity added this year alone will exceed the installed total of Brazil, Italy and Britain, and come close to that of Germany and France. By 2012 China should produce more power annually than America, the current leader.
State banks and their cheap credit
the utilities invest spectacular amounts in capital equipment, financed largely by cheap loans from state-controlled banks.
http://www.economist.com/business-finance/displaystory.cfm?story_id=16015467
rich
There is a speculative "bubble" of some description in Tier 1 cities in China. Outside of these regions then house prices seem to be more modest - economist article last week put houses overall in China plum on average affordability.
The article uses average wages but what's average about people buying in Shanghai and Bejing? I suspect they used the avearges that made the most scary affect - national average say. Not middle class professional workers in Tier 1 cities.
Anyway, the Government want to remove the speculators and re-empahsise lower cost housing. Will they do this? No idea, but every time they fail to bring house prices down they wratchet up the rules.
In the mean time, cash deposits are large - 30% for first time buyers, 50% for people with second homes. The most likely outcome of a fall would be reduced spending power of the middle classes.
The banks have been loading up capital through 2010 ready for any fall out - I think they are aiming at 10 - 11% capital to loan value.
Developers are loaded up with cash from the last few years rises. They also did fewer projects over the winter as they saw the resolve of the PRC government. Which, ironically, led to supply / demand imbalance which pushed house up.
The goverment has release land for developers to up the supply of low cost housing - that should keep them busy. There is certainly plenty of demand for housing in China - I've seen pictures where 10's of thousands are hoping to be one of the luck ones who get affordable housing.
The law of unintended consequences are always possible but I think they have done as much as they can to make this a slump rather than a housing crash.
rich
Energy Crunch: Industrial energy use up 82% Y/Y was the statistic that left me stunned. I can only assume that there was considerable idliling in 2009 Q1 combined with strong growth this year - but still. Surely shum mistake?
China's overall power consumption rose 24.2 percent year-on-year to 969.5 billion kWh in the first quarter. Power consumption for industrial use has increased 81.8 percent in the same period, according to the council.
rich
[1] http://www.chinadaily.com.cn/business/2010-04/29/content_9792837.htm
SOKF - Net margins are in the 40% ish. Normally, businesses with such high margins come under pressure from competition. Can SOKF defend the margins?
I'm guess though with beauty sales, hmm how should I say, women aren't that price sensitive? The non medical spa also is licensed and they commented in the last CC that access to licenses might be restricted
Just reading up about the company in case it's a blue light day for SOKF...
rich
SOE's - Sorry, less efficiently run. With SOE's I was under the impression that they can get cheap bank loans to grow their business - they can also have monopolistic positions - difficult not to make a profit when a monopoly/duopoly even if you aren't efficient.
Though I think CNOOC is meant to be an efficient run operation.
Is that the impression others had?
rich
Loans, That makes sense eom.
rich
SOE/SIAF - Why do they put them into firms losing money? There's no rational fiscal reason - it's just the state money helping the state businesses. I'm quite sure companies know how to ask for a bank loan - my feeling is that they don't have the connections to get it.
My understanding is that in China is about business connections or Guanxi - especially state connections.
SIAF has managed to get a bankloan and in their recent PR are going to have a visit from the communist hierachy the "Secretary General of Qinghai Province" - I think that's an example of a well connected company. (No idea why that province other than it was the quake province - perhaps he wanted to get away). (Have they had other visitors?)
rich
Loans - I believe most of the bank loans go to state owned enterprises. Money flow something like Trade Surpless -> Banks -> SOE
rich
OIL: Sinopec refines 20% more oil Y/Y
Ferocious usage of oil.
http://www.chinadaily.com.cn/business/2010-04/29/content_9792802.htm
rich
Coal: Tight supply, price hikes of thermal coal and drought in hydropower-generating region may lead to power shortage in central and southwest China during peak hours this summer, the China Electricity Council (CEC) said Wednesday.
http://www.chinadaily.com.cn/china/2010-04/29/content_9788386.htm
Well that's Q1 & Q2 & Q3 sorted out for the coal stocks.
Go LLEN!
rich
CNAM, Trader - looks like they don't need any more cash then. Sounds good.
rich