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SIAF's market cap is currently $55M, yet:
1) Q2 may well be the last quarter with revenues under $20M
2) 2011 will certainly bring the first quarter with revenues over $20M and the last with revenues under $20M
3) 2012 may well bring the first quarter of revenues over $55M, and also very possibly the last under $55M.
For now, need to see the sign posts:
fish farm contracts,
fish sales beginning and approaching targets in Q3/Q4
cattle and sheep capacities of 5,000 head each in the two demo farms being realized incrementally in Q2, 3, and 4, with consequent fertilizer revenues
HU yields,asparagus revenues in Q3 and Q4
more grants
Dividend announcement
Form-10 approval for more timely announcements
Retail Franchising plans started
I do not think Solomon called for any share price by any time. I do recall him saying that historically the company has been afforded a p/e of 8, and that this would meet the price requirement for an uplisting, targeted for some time in 2012.
The company has mentioned many times that the new LUR being acquired this year is acceptable collateral for low interest loans. Hopefully, in the future, the company will take advantage of these loans rather than any further stock for debt extinguishment or anything else, and perhaps to finance some further capital development.
I am fairly focused on the fundamentals. If this company does what it says it will, those of us who remain will be happy. The extinguishment of debt may have resulted in some selling overhead.
However, I tend to ascribe fundamental reasons for the share price. Probably, this is true in the long term; maybe not, in the short term. For now, I don't think the markets believe Chinese companies, let alone one projecting 15x to 20x two year revenue growth for continuing businesses. I don't think we'll see a reasonable multiple until the second half 2011 projections are met, or credible progress is demonstrated. I think that the last press release on the fish business progress allowed extrapolations that were short of expectations.
However,as Lucky has said, the fish businesses are on track. As JF expects, and reinforced by other press releases, the other businesses may be ahead of targets. Further evidence this may be the case was revealed by Vikings examination of the Sweden presentation spreadsheet, in which the targets appear 20% below a best case scenario.
So, my guess is that the drop from the $1.00 - $1.10 range is due to low Q2 expectations. The fact is, we know that Q2 will be well below 1/4 of 2011 revenue targets, yet well above Q1. As long as the numbers are decent, indicating further establishment of the businesses, and the commentary reiterates 2011 full year targets (+perhaps Q3?), I expect us to go back to that $1.00 + level -- or higher, especially if they announce more than two fish farms being worked on, and/or that they are well along toward two cattle/sheep demonstration farms, and showing promise for franchising.
Further later catalysts will be Form-10 approval, dividend announcement, announcements of new fish farm contracts, Q3 and Q4 results showing 50%+ sequential revenue growth each, with new 2012 revenue and income targets, then Q1 2012 results showing YoY revenue growth of 600%+.
Bold predictions indeed.
They are targeting increasing revenues 6 fold for continuing operations 2011 over 2010, and tripling from there in 2012 and doubling yet again in 2013.
Obviously, the market takes a wait and see outlook.
But 2012 targets becomes much more believable if/when 2011 meets its targets; likewise, 2011 becomes much more believable as quarterly numbers show arithmetic growth, and guidance is reiterated. In fact tripling revenues from a much larger base in 2012 figures to be easier than growing 6x in 2011, because the businesses will be established; concepts proven; profits shown.
The business models have always been scalable, so again, the gaudy predictions can happen.
SIAF outshines all other U.S. listed Chinese companies for two basic reasons:
1) They put out a multi-year plan showing huge growth; not "just" 30% + put on record plans to spin out subs to Asian exchanges to realize proper valuation multiples
2) They've taken steps to distinguish themselves from the bad actors depressing the space (dividend, raising dividend target, current SEC scrutiny, long term international ownership)
Should be fun to watch. If they meet targets -- and we now have new reason to believe they're realistic -- we have a sure 5 bagger, easily more.
If they meet targets, in 17 months they will have increased revenues 15 fold over two years; earned $1.00 / share; guided $2.00 eps and $.24 dividend. A backward p/e of 4 for a company showing and guiding four year growth in the triple digits EACH YEAR would be remarkably low by any view, yet would still be a five bagger from here.
Bold predictions indeed.
They are targeting increasing revenues 6 fold for continuing operations 2011 over 2010, and tripling from there in 2012 and doubling yet again in 2013.
Obviously, the market takes a wait and see outlook.
But 2012 targets becomes much more believable if/when 2011 meets its targets; likewise, 2011 becomes much more believable as quarterly numbers show arithmetic growth, and guidance is reiterated. In fact tripling revenues from a much larger base in 2012 figures to be easier than growing 6x in 2011, because the businesses will be established; concepts proven; profits shown.
The business models have always been scalable, so again, the gaudy predictions can happen.
SIAF outshines all other U.S. listed Chinese companies for two basic reasons:
1) They put out a multi-year plan showing huge growth; not "just" 30% + put on record plans to spin out subs to Asian exchanges to realize proper valuation multiples
2) They've taken steps to distinguish themselves from the bad actors depressing the space (dividend, raising dividend target, current SEC scrutiny, long term international ownership)
Should be fun to watch. If they meet targets -- and we now have new reason to believe they're realistic -- we have a sure 5 bagger, easily more.
If they meet targets, in 17 months they will have increased revenues 15 fold over two years; earned $1.00 / share; guided $2.00 eps and $.24 dividend. A backward p/e of 4 for a company showing and guiding four year growth in the triple digits EACH YEAR would be remarkably low by any view, yet would still be a five bagger from here.
Viking,
The spreadsheet has several Excel sheets. You are referring to the tab "change in perspective." You made an excellent catch. Indeed, you can look at the figures in the cells used to derive the revenue % gains, and there are larger numbers that total $71M+, as you say.
However, in the excel sheet named performance targets, you will see that the revenue target for 2011 is $57.7M.
Perhaps, they used their internal, most optimistic revenue case to derive the segment percentages. This best case, if it is that, is almost exactly 25% higher than the overall performance target. Most likely, the $57.7M is a better guide.
However, great to see that the targets may be base case, and apparently have upside.
Pretty much knew this to be the case for HU. Appears that the fish sales are still about on track to performance targets, despite a late start. All other businesses appear on track from press releases, as nearly as I can tell.
Overall, very optimistic. We should have the meaning of "targets" clarified in the Q2 conference call. Hopefully, they intend to under promise and over deliver. Would be great, though these new and growing businesses are not that easy to predict, until a critical mass is reached, and a contract base realized.
Thanks for the catch.
Emilez,
Thanks for asking.
Thing is, we (I) don't even know what they targeted in Q2 during the presentation.
Do know that the continuing non-dairy businesses earned $400,000 in Q2 2010 and $10.8M for full year 2010.
My suspicion is that if JF had informal talks with the company, perhaps the company gave non-specific positive qualitative impressions of the business progress.
The question is what Q2 results would indicate that SIAF is on track, and what results would show them ahead. There's been no Q2 revenue target, but SIAF has said that the growth will occur in the second half.
We know that 100% of fish sales, and both the HU and asparagus revenues will be in the second half. These alone comprises 36% of the $57.7 targeted for the year. In addition, all other businesses ramp up throughout the year. In the fourth quarter, SIAF will be constructing more fish farms and cattle houses than they during Q2. The second fish farm started construction 2/3 of the way into Q2.
Absent Jordan Fund defining what a surprisingly favorable Q2 is, nor where a surprise might come from, the real news, imo, will come from the conference call. Presumably, regardless of Q2 revenues, we'll find out if SIAF is on track and why.
I agree with Traderfan that nobody is expecting large revenues from Q2 -- in relation to the full year projection, perhaps on the order of 10%.
But who knows, maybe Emilez will report back that Jordan Fund has reason to believe the fertilizer businesses are well ahead of schedule, or some other wild card.
Hope you're right about the bad news and slanders being out of the space. If so, time will take the valuations up, and performance, more so.
There's been no guidance for Q2, as far as I know. That's why I'm curious how the Jordan Fund thinks SAIF is ahead of Q2 and 2011 targets.
In any case, whatever the Q2 revenues, there will be a conference call, and I'm sure they will comment on progress toward targets.
Absolutely!
Would be seriously appreciated.
Am curious whether or not SIAF is on target to start construction on 4 fish farms during 2011.
Also, what would constitute meeting Q2 revenue target, and perhaps how steep the ramp over the year for revenues and underlying milestones.
And most importantly, what leads them to believe that the targets will be bested?
Thanks in advance!
Would love to know what makes them think Q2 and full year will be better than the presentation targets.
Would even like to know what Q2 targets are.
Anyone with access to Jordan Fund?
In any case, making 2011 targets guarantees a fabulous 2012. Even if the retail franchising operation were a complete bust, and they missed a bit on the number of new farms, revenues and net income would still double!
Viking,
PM me your personal email, and I'll send an Excel file of the numbers presented in Sweden.
re website
Don't disagree, but they should present commensurate with the stature of the company, as they grow.
Happy to have them concentrate on growing these businesses. Once established, high growth is pretty much baked in, as the models are highly scalable.
Targets
I've been misspeaking when referring to 2011 and later "projections" or "guidance." Revenues of $57.7M in 2011 and $171.4M in 2012 come from the Sweden presentation. They are actually called "targets."
This may be a useful distinction, because falling a little short would not be a "miss," yet meeting or beating would still be highly positive.
After all, they are targeting 5x-6x revenue growth from continuing businesses in 2011, and triple 2012 over 2011. As long as the businesses gain critical mass in 2011, they will have met their goals, imo. Foremost will be deriving some consulting and service revenue from four fish farms by eoy 2011, and having fish sales from two.
Likewise having two demo cattle "farms," and at least doubling the cattle houses should provide ample base to attack 2012, buttressed by initiating retail franchises.
I reread a couple recent press releases.
From the June 30 release about receiving $1.27M government grant for enzyme production:
"We are very optimistic based on the support we already have received from local governments for our fish and beef demonstration farms that, once our operations are up and fully running, we will continue to enjoy government support as we move to franchise operations across China. The opportunity for these development grants should provide incentive to both investors and local governments to take an interest in our franchised programs.”
This is the first hint that local governments may become partners for fish or cattle farms.
From the June 16 release about beginning construction on a second cattle farm:
"Macau EIJI Company Limited, a fully owned subsidiary of Sino Agro Food, was awarded the consulting and servicing contract to develop and build the cattle and sheep farm using a grain feed technology held by the Company as well as its Aromatic beef Technology. The contract will bring in over $3M USD in service fees for MEIJI within Q2 and Q3 of 2011."
I believe this $3M+ is 100% of the projected revenues for the technology profit centers 13 and 14. The release date is 6/16, but some revenue is in Q2.
Obviously, the company has a lot on its plate. Don't think we'll see a new web site at least until after the Form-10 is approved. Wouldn't be that useful beforehand, anyway.
Q2 estimate.
Backing off $7M - $9M, though it may be fine. Fact is, there are too many variables to predict. For instance, when is revenue recognized for new farm consulting and services/
Also, not only wil there be no revenue from HU and asparagus, fully 24% of sales or about $14m will come from fish sales, with 0 in the second quarter, a great majority in the fourth.
Now guessing Q2 revenues at $4.5M to $9M.
Just more important that the release or conference call institutes quarterly ranged guidance, and reiterates full year.
Viking,
I think I answered your question about $.45. There should be no issue there. They earned $.18 already in Q1, greatly because of the dairy sale.
As for, "C'mon $58m from $3M:"
1) 2011 Q1 revenues of $3.1M was 10 times the 2010 Q1 revenues from continuing operations.
2) The businesses are ramping fast; expect exponential growth each successive quarter of 2011.
a) Q1 included consulting/servicing revenues from the one existing farm; expect Q2 to have revenues from 2; Q3 to have revenues from 3, and Q4 to have revenues from 4. These contracts are generally as planned in the projections, and on track.
b) Expect similar ramps from fertilizer, feed, cattle, and new sheep profit centers, as the fruits of 2011 investment are being realized as 2011 progresses.
c) the businesses were always seasonal, especially HU flower and the new asparagus crops which will have 100% of revenues in Q3 and Q4.
I find these projections aggressive, but believable. Of course,the proof is in the realization. So, we need to see continued YoY growth of multi-three digit percent in every continuing business; also, announcements that presage exponential quarterly progress; new cattle house construction, feed and fertilizer capacities growing and sold, expansion of existing fish farms, new fish farm construction/contracts, and HU and asparagus harvest sizes.
Again, because of the lengthy Form-10 process, many of these metrics will occur before we hear about them.
I wish I could pinpoint a Q2 revenue figure that would indicate being on track. My guess is $7M - $9M. Ranged quarterly revenue guidance would be nice, to better track to yearly guidance.
More on the retail franchise concept:
The business plan is designed to set up a virtuous circle. As I understand it, which is deduced:
SIAF JVs wholesale businesses, in which they use profits or other capital to invest in increasing equity. Therefore, the % of revenues flowing to SIAF net income increases each year.
SIAF establishes a wholly owned distribution network selling to retail franchisees.
So,
The wholesale businesses have a guaranteed customer, the distribution network.
The distribution network resells the wholesale product to the parent company's retail franchisees, who have a guaranteed supplier.
What does this do?
First, it doubles the revenue for the wholesale product, tacking on distribution profits for SIAF.
Next, it makes new wholesale JV businesses much more attractive to JV partners, because they have a guaranteed customer.
Therefore, the pace of new wholesale JVs can be expected to accelerate. In turn, expanded wholesale business capacity increases the supply of wholesale food available to the franchise network. Therefore, that network can grow, creating a larger customer base for more wholesale farms or cattle ranches.
Curious about others thoughts on this.
The answer is in the Q1 results, which include capital gains from the dairy sale. Also, the company is exempt from income taxes, so net margins will remain high.
The best measures for 2011 progress, imo are:
1) increasing NTA by about 25%
the shares sell for 1/2 of current asset value, which is growing
2) establishing critical mass for each profit center, particularly in the fish, cattle, and fertilizer profit centers, growing revenues in each multi-three digit percentages.
3) Fish
a) announcing new fish/prawn/eel farms (constrained until Form-10 approved/SEC documents filed)
b) establishing fish sales from existing farms such that future sales from new farms and farms under construction are easy to extrapolate; believable for the investment community
4) same for cattle houses, and planted HU and asparagus acreage
5) any announcement to start retail franchising
2010 was about proof of concept for several wholesale businesses, and jettisoning the dairy business to provide capital to grow these businesses.
In general, 2011 is about establishing critical mass for these several very fast growing wholesale businesses which will feed a wholly owned distribution network in 2012.
If/when 2011 projections are met -- or even approached -- imo, 75% of 2012 projections are easy to foresee, which would result in earnings approaching the current share price. The remaining 25% comes from 100% execution and establishing the retail franchises.
These franchises are targeted to provide retail services to 50,000 people; therefore, the 2013 target of 40 stores would serve 2M people. Of course, China has 12 cities with more than 5M people, and over 100 cites with population over 1M.
I think the actual progress to milestones is difficult for the market to discern now, in part because SIAF is constrained in what they can announce. Also, the 30 month plan is only 7 months in, with only 3 months reported.
The 2011 capital development budget, including land usage rights, is detailed in the Sweden presentation, cash inflow and outflow.
Is $4 by 3/12 realistic?
Solomon may have been signaling that there will not be a reverse split to meet price requirements for OTC listing. I believe he also mentioned a p/e of 8, which is unrealistic now.
However, by May 15, 2012, if on its targets, SIAF will have:
1) announced Form-10 approved, allowing timely reporting of significant events
2) reported 2011 annual revenues of $57.7M, a ten fold increase from 2010 continuing operations
3) reported 2011 fd eps of $.45, and a dividend of $.05, half in a note earning 8%
4) issued new 2012 guidance, presumably reiterating revenues tripling to $175M , fd eps of $1.00, yielding a dividend of $.12
5) reported Q1 of 2012, presumably reiterating 2012 guidance, almost halfway there
6) uplisting either has happened or on the way
7) there will be at least four fully operational farms, possibly more, very likely with several more under construction
8) the 2012 fish revenues from both consulting/services and sales will be very easy to extrapolate from growth over 2011 revenues
9) likewise, the cattle, fertilizer, and asparagus businesses will have shown achieved critical mass, shown remarkable growth, and therefore be fairly easy to monitor, in terms of more guided revenues
10) all the profit center businesses will be much more credible, having already produced
A 2012 p/e of 4 gets $4.00/share.
Question is with growth so much more believable; 2013 guidance of 100% growth again in revenues and income, producing eps of $2.00 and a $.24 dividend; and spinning out subs planned for 2013, what forward p/e is appropriate?
There are not unrealistic rationales for the stock to be $50 in 2015. But a whole lot of work and uncertainties between now and then, mostly now.
But this is a $60M market cap company investing $80M in capital development this year; probably another $100M+ in 2012/2013.
Totally agree with your post. Solomon has a 30 year track record. He has built some VERY large and profitable organizations.
He has also shown us three year projections of truly awesome financials, with believable underpinnings.
For instance, they are projecting absolutely huge fish sales in 2012 and 2013. But if you break it back down to $/kilogram of fish * 500 ton capacity * the reasonable number of farms being projected to be built, it is easy to understand how the revenue numbers will be met. There will be a variety of fish/prawns/eel most starting as fingerlings, all with different gestation periods
With each new year, SIAF's equity stake in each JV grows, so income will rise even faster than revenues. This is the beauty of the business model.
And when the retail franchising begins, the automatic distribution will provide more incentive for new wholesale JV partners.
Of course, the numbers are so large that a skeptical market rightly needs affirmation, since the businesses have just begun.
We will begin to see exponential revenue gains every quarter now, something on the order of $3M, $7M-9M, $16M-20M, $26-30M, Q1 through Q4 respectively. With these numbers met, the model is well proven, and with announcement of new 2012 JV farms, the 2012 fish sale projections are pretty much baked in.
The key underlying milestones now are new fish farm contracts and build out; cattle house build out; HU and asparagus harvests, all of which are being realized now, and accelerating in this second half.
Unfortunately, we will not hear about some of these milestones until after the fact, because of constraints before the SEC Form-10 approval.
The company web site has some pictures from late 2010;
http://www.sinoagrofood.com/?q=content/media-and-news
The presentation in Sweden had 2 dozen later pictures.
Would still be nice to see pictures taken by a third party, especially for any super skeptics.
Lucky,
Your interpretation may be right. I hope it is, as it's better for shareholders than my interpretation. In fact, yours is so favorable, I tend to doubt it.
My interpretation is still shareholder friendly, and a good improvement on the original already good plan. Primarily, this is because SIAF raised the guided dividend amount from 8% of income to 12%.
As you say, half is payable in cash. My interpretation is that the second half is in the form of a note -- not convertible stock -- that pays 8%, and can be paid at maturity in cash or stock.
Note the major difference, that in 3 years, you can redeem for 126% of the original cash value, in stock, if you prefer. This is the same dollar value, no matter where the stock is trading.
You are right. But to a great extent the Swedes seem influenced by the Jordan Fund's steadfast bullish appraisal, having had
1) access to private discussions with company officials, at the highest level
2) public presentations with full q & a
3) site visits with another scheduled
4) promote long term holding
5) very high opinion of the CEO
For these reasons, I list the holdings as a positive, unique to the U.S. listed Chicom small cap space, as far as i know.
Whatever the number, they hold a significant portion of float in strong hands, and that's a good thing. True, some may have been spooked, but it is also represents an audience of potential new buyers.
Even any possibility of a listing in Sweden again distinguishes SIAF.
Emilez,
I copy and pasted my post, which was a response to someone on Yahoo. He characterized the stock price movement as "a turd."
I should have left out that part of my post here.
As for the company, I guess you can't know with 100% certainty that all is fine, given the CCMEs out there.
However,
1) The operations are real
2) They are going through a rigorous SEC registration process now, with post RM scare scrutiny
3) They pay a dividend
4) The Jordan Fund has visited, and Swedes hold 1/3 of the float long term
5) They have a very solid business plan
To tell you the truth, I don't pay much attention to the day to day trading, nor am I very good at understanding what the day to day trading process reveals.
I am in the company for the long run, so am more focused on the fundamentals, which show absolutely phenomenal growth. The company is most definitely not a turd.
Of course, I would prefer a smooth ride until the guided numbers are met.
I think you will see that the company is on the trajectory they project when they reveal more information, first with the Q2 SEC reporting and press release/conference call.
They are constrained in what they report until SEC documents have been filed, until the Form-10 is finally approved. So for now, they can issue press releases only of what is essentially already in the latest Form-10, until the SEC has newer information. When the Form-10 is finally approved, they will not have to wait for new SEC filings, before making announcements.
So, it is highly probable that the company -- which is clearly moving and growing fast -- is well along in meeting milestones toward financial goals. We can look forward to hearing these developments with Q2 results.
In fact, any possible new developments that support Q3 and Q4 guidance will be more important than actual Q2 results, imo, especially in the fish business.
And I am quite comfortable that those revenue projections -- 50% of total -- albeit, as always intended, back loaded to the second half.
No Q2 guidance was given; however, it is clear that revenues will continue to ramp every quarter, such that the vast majority will be in the second half; something like Q1 through Q4 revenues of $3.5M, $7M - $9M, $14M-$16M, $28M-$32M, give or take, realizing overall guidance of $57.7M.
This makes perfect sens, as there will be no fish sales in the first half, with the great majority in Q4, as they will have more facilities having had time to grow the fish. That applies to consulting and service revenues as well, because more JVs will have commenced.
Given the nature of this ramping -- which amounts to growing continuing operations about 10 fold, 2011 over 2010 -- it is important that the company reiterate guidance on a conference call and press release of Q2 results, and perhaps institute quarterly revenue guidance as well as signal major sign posts to follow.
The company has assured that the fish business is on track to generate 50% of 2011 projections.
Recent press releases also bode well for the fertilizer and cattle businesses, as well as grants coming through as planned or better.
I too have been reassured that SIAF is on track to meet total projected revenues for the fish business.
There are more moving parts and sources than reported in the last release,
It is clear to me that as SIAF does what it says it will, we will all be very happy. So, the more SIAF verifies that trajectory, the greater the credibility and the smoother the ride.
So, I would like to see guidance reiterated whenever possible, particularly when a press release can be incompletely or incorrectly extrapolated.
For similar reasons, I'd like to see quarterly revenue guidance, as it is clear that revenues will ramp at a very strong rate every quarter this year, setting the stage to triple in 2012.
Lucky,
Would you mind dropping me a private email: treit2002@yahoo.com
Thanks.
Lucky,
I have every intention of sticking around. Have never sold a share.
By the way, both the .pdf and .xls of the Sweden presentation show fully diluted eps of $.45 for 2011. This provides the best income picture, imo.
The copies I have diverge for eps after extinguishment of debt. The .pdf adds $.05 to earnings, and the .xls subtracts $.05. The .pdf should be right, assuming new shares are sold at $1.50.
The presentation also projects almost 200% revenue growth 2012 over 2011. This never, never could have happened without selling the dairy business.
Also, they plan to buy back 5M shares, partially upon OTCB listing.
I do not understand why they don't borrow money to extinguish deby, rather than issue new shares.
Lucky,
Add my appreciation for your recent posts.
I believe this one, about the fisheries is most pertinent to the company's trajectory toward really remarkable guidance in the next 2 1/2 years.
May I ask where you got confirmation of being on track to meet the numbers. Is this confirmation source for both the consulting/servicing side and the sales side?
Further, do you understand the breakdown of revenues on each side? For instance, does a certain capacity -- say 250 tonnes -- translate to a certain revenue amount. Likewise, do you know how they project fish sales?
On the sales side, it is quite believable that SIAF will still make the revenue projection, if as I believe is the case, that the projection is for total sales. Income -- both projected and actual -- will be based on SIAF's equity interest in the JVs, which will grow over time. Is this your understanding?
Works the other way too, when someone or a fund wants 500,000+ shares.
We did finish on an uptick today, way above the low.
There were pros and cons in today's press release. Nice to see the releases coming so quickly, especially the first two that had only pros.
The Form-10 resubmission is a plus.
We still need to see new fishery contracts, which are expected.
My guess is that fish sales will miss guidance, because they'll start later than previously thought. Good chance that net income will be made up by HU and asparagus ahead of expectation; possibly, fertilizer and cattle/sheep also.
Do you know what the accumulated volume is for these "T trades" in the last two weeks?
Does anyone know the large holders of shares?
I know that Solomon and the board control 18M shares. Purportedly, Jordan Funds and other long term Swedish investors own 30%+ of remaining shares.
That leaves about 28M shares, less than 1/2 the outstanding shares. How many 1M + share holders can there be?
Let's all hope so.
Because that timing would dovetail nicely with $1.00 trailing and $2.00 forward earnings :)
Of course, it would be nice if the share price reacted to good news.
Over time, if the company does what it says it will -- uplistings, businesses growing at triple digit clips, meet earnings guidance -- we know the share price will be up accordingly. There's deep value, and there's utterly ridiculous.
These recent news releases show the company's progress on a couple business fronts, that those are on or ahead of schedule. So, these are small, first sign posts on a road map that points to a double digit share price, based on a still low valuation.
If the huge stain over the sector is ever washed out, perhaps a market average p/e multiple will be afforded.
We need to see similar sign posts for the fish business, as that will account for 50% +/- of revenues and gross profits for the next couple years.
Nice to see two positive news releases in two weeks. Let's hope this starts a trend.
Maybe with a couple more, the share price will take notice.
Indeed, a very positive release, under a "wild card" announcement.
This makes the former estimates for future grants look low. This not only helps NTA, bit obviously also spurs capital development, and aids further JV's. Increasing their stake from 45% to 60% also bodes well, as the cattle business grows.
Perhaps the most interesting comment: "a new Mash Gas station that is planned to be built in 2012. This project also will be eligible for Government grants up to 100% of development costs." Clever vertical integration, and an entirely new 2012 profit center, with minimal SIAF capital expense. Also, cost of goods will be shit, so to speak.
Still, the fish farm construction and sales are the largest segments for revenues, so commencing actual fish sales is a much anticipated announcement. More so, progress on the second 2,000 ton capacity farm, and doubly, any new farm contract(s).
If the fish businesses are on track, it appears that the others, as far as we know, are actually ahead of plan.
Can see why establishing foreign sales is such a plus. Also, why it would be difficult.
Hoping July is the month that news sets the stage for second half financial results that fully validate the business plan:
Form-10 Approval
Fish Sales begin
New Fish farm contract(s)
Wild Cards; eg,
Initial HU crop estimates
First Asparagus planted
Time table for cattle house demonstration units
Timetable for fish sales for second farm
??
Q2 revenues -- while much larger than Q1; on the order of $8M-$10M I'd guess -- won't have new cattle/sheep revenue, nor HU/asparagus, nor fish sales, nor even much new fish farm construction.
However, with announcement(s)and reiterating guidance, it will signal being on track for $58M in 2011. It cannot be underestimated how much better the company's prospects are with $58M 2011 revenues without the dairy than with even $70M with the dairy.
Q3 revenues of $20M+ should provide full financial validation of large and accelerating growth across all business segments.
Reread the Sweden presentation, which indeed was a VERY bullish road map.
Of interest, they targeted 4% of 2011 revenues from consulting, servicing, and management of the cattle farms. 4% of $58M in revenues is $2.32M.
The recent press release said, "Sino Agro Food, was awarded the consulting and servicing contract to develop and build the cattle and sheep farm ... The contract will bring in over $3M USD in service fees ... within Q2 and Q3 of 2011.'
So, there's one profit center ahead of financial projections.
HU flowers projected 6% or $3.5M even though 2010 revenues were $4.7M on weather reduced harvest of 31M pieces. Will easily double that with good weather. So, there's another business segment well ahead of projections, unless they plan to hold back a large portion of 2011 yield for sale in 2012.
Interestingly, they project first year asparagus revenue at 5% of total revenues.
Hyperboy,
I listened to the portion you reference.
I did not hear anything about a distribution. I believe that he is saying the following:
In 2013, the company will not only spin out subsidiaries, it will also either IPO or do a secondary for 25% of the parent company shares, also in Asia. He is saying that the accounting treatment for the land in Asia is different. In the U.S, the value of the land for GAAP remains the purchase price. In Asia, it can be revalued, presumably commensurate with improvements. He's saying this will increase NTA by $150M; therefore, aiding the IPO/secondary price.
I think he pegs the initial or secondary stock value of the company at least NTA of $500M in 2013, or $7/share. Existing shareholders will have the opportunity to sell their shares at the IPO or secondary price.
At least that's my interpretation.