I am updating my staus.
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CKGT, pnnymn - good - I think on monday people should be relaxed and, if they choose to sell, get out at a price they are happy with - there is no need to panic over a non-cash charge. The underlying value of the company is good even if the accounts look bad
Good luck and hope you get an excellent exit price.
rich
CNOA - hmm... they booked 8 million or so from rice "trading" in 2008. This disappeared in 2009 - I'm sure coincdiently when they sold the rice farming business in late 2008 - although they claim in 2007 farming rice made them millions they then claimed in 2008 that farming rice barely made a penny.
I find no adquate explanation for these revenue changes, so, the fact they missed their estimates didn't bother me. I sold out of CNOA because I was unhappy with the managements explanations. If you don't trust the management you sell out.
Finally, If you make your money on CNOA I say well done but they aren't for me.
rich
CKGT - Yes the GAAP P/E is 17 but it's a nonsense. Fast forward 1 or 2 years after the warrants have been exercised and the company makes the same earnings as it did this year (let alone what it might do in 2 years) then it's P/E 5 again. Or if the PPS doesn't rise in 2010 and the earnings are the same then we have P/E 5 again. All utter accounting nonsense.
If people are uncomfortable with NON GAAP then I say, fair enough. I completely respect any shareholders that is uncomfortable and has made that rational choice. However, I suspect that the share holders will become the people who are happy with a NON-GAAP modification that ignores non-cash charges.
Good luck all and a merry xmas to one and all.
rich
Oh, I forget my manners MerryXmas
rich
CKGT, Good grief are we really having the warrants charges discussion again? PUDA, CSR, CCGY, RINO, SKBI, YONG, CBPO have all been hit and NEP could feel the affect in Q4 / Q1 their strike price is $8.10.
The charge is an accounting procedure which is additive if share price goes down and negative if the share price goes up - a complete farce. All the above companies survived this mess. The amazing news is that CKGT still made a "profit"!
Can't handle warrant charges? Then you want to just buy US stocks... yummy, yummy goodness of the American economy - and the, apparently, important fact that their warrants are priced in dollars and they work in dollars.
Chinese stocks are affected because they work in Yuan and their warrants are priced in dollars. This is especially stupid because Yuan is pegged to the dollar, good grief
Yes, the stocks go down... but no they don't keep going down. Stocks are priced at the meeting point of fear and greed. And people who understand Non-GAAP will get very greedy indeed since they know why the market is selling it off and they know it's an accounting abberation. This all started in January of this year and I suspect as the year has gone on people are getting wiser to it.
The point is: You've spent a lot of time finding a good stock. If you like the stock then you shouldn't be scared out of it because of a Non-cash charge. People shouldn't be selling in fear. If they want to sell it should be with the aim of buying it back lower (which of course everyone will be thinking - so you better be smarter than the market ). The company hasn't changed, the accounting procedure have.
rich
p.s. Has anyone got a good link explaining this?
Position: CKGT is 2% of my portfolio and it could disappear on Monday and I wouldn't give a sausage.
CHOP, ratobranco - do you know if this is independent research?
rich
YUII Valuation from Yahoo boards - anyone think they're wrong?
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_Y/threadview?m=tm&bn=28353&tid=75&mid=75&tof=1&frt=2
Based on their expansion, 150MM broilers in 2010 looks like a sandbag...but let's wait to see how the farm due to complete in January and the two in March come off on schedule before we say it's a total sandbag.
Let's see...if broiler prices in 2010 hold steady to 3q09 as management hinted, that's RMB 2.85/broiler, or about 42 cents. That's about 62.5MM revenue from broilers. Probably another 0.5MM from egg sales and 1.8MM from sales of retired breeders. So full year 2010 revenue just a shade less than 65MM.
Assume net margin stays at historic rates of about 30%...That means 19.5MM net income. There are about 15.7MM shares out, but lets round that up to 16MM. So $1.21/share 2010 earnings.
rich
YUII: "with a significant discount peers in China and Hong Kong."
We can only dream of those valuations. In China they are able to give a significant premium to reality
rich
YUII I think there's a double there...
2010 they are looking at EPS $1.06 ish and it's growing at 32% EPS... if you give it 15 x earnings that's $16 stock..
Feels pretty low risk, they have been funding from cash... There's higher rewards out there. But seems low risk as they are basically looking at getting a better market share against other companies that haven't been using technology as well.
Perhaps they can funk the name up rename to Techno Chicken?
rich
YUII, I think it was an example of the board working efficently.... First people listening to the presentations and working out it was very undervalued... Then working out it wasn't moving because of Barry Kitson selling... then finally that the big seller had gone. By that time I had researched I was ready to buy 6 and change... I'm sure I wasn't alone
Geo just doesn't do that level of information...
rich
YUII - Geo investing considering making it Geo bargin...
Currently geo special...
http://geoinvesting.com/companies/yuii_yuhe_intl_inc/research/special_situations/0023466
rich
SKBI, joko...
Halving revenue is some affect for a few months late! I suspect it's not the whole story... I suspect they over estimated and used the marine event to reduce their estimates to comforable levels. In the end they are still going to sell 6 times (think) the number of vaccines through the channel in 2010 than 2009 and cope with a brand new facility - it's tough to scale up an opperation that much and stay in control.
In the end I'm not worried about ramp up as I think this is a company in the right spot and will outperform the market over the next few years.
I love the move to marine - new products space.
Annoying, like most Europeans, your English is as good or better than "us" native speakers. I will glady point out any English mistakes I see in a vain effort to try and make up for fact I'm a monoglot - as long as other people don't point out mine
rich
SKBI, Trader - fishey jokes for SKBI
1.85 - 1.90 was with the delay factored in.
They have $14.8 million in cash according to the most recent 10-Q... they don't have any major requirements for cash - which were for builing the new facilities. Basically, the only obvious scenario was if they bought a company - they said they were looking but not found anything - in last CC.
For the 9 months they are pretty flat on cash usage a few thousand -ve... most of it disappeared into inventries.
http://www.sec.gov/Archives/edgar/data/1076939/000114420409060042/v166458_10q.htm
rich
SKBI, bogus,
Most of those estimates were based on the management vaccine revenue - which were halved. High margin products would have had disproporionate affect on bottom line.
rich
SKBI, joko
I think management gives conservativ guidiance so we should achieve this target.
They just had to half their vaccine revenue estimates - given the process that was involved, GMP certification, test batches and final production batches it's not that surprising that there were hangups.
I think you right, but they made a mistake and the market might question if they give conservative guidance - we'll see
rich
SKBI O/S unchanged at 7,025,343, They gave revenue estimates of 44M to 46M and gross margins estimates of 48 - 54% - not terribly useful
I'm taking 33 Million revenue and $1.44 estimate for 2009 and multiplying it by the higher revenue which gives $1.87 to $1.95.
Possible positives:
Higher margins from inc vaccine and microbe
rich
SKBI, Drex - sometimes ignorance is really bliss I should read filings more carefully!
rich
SKBI - so that's a good thing I guess? Simpler share structure for SKBI?
rich
What do people think about the boiler of major firm being closed down for 1 month having so much affect on revenue?
I thought possible reasons were:
1) The company ordering the coal knew they were going to close down and reduced their coal orders in the preceeding months.
2) SGZH have a certain contract volume for the month and weren't in a hurry to use them up - perhaps wanting to use more in Winter when they get better prices?
Am I just a hopeless optomist?
rich
Course its conservative 96 cents is management stated aim - in year ending April '10. But that is stupidly conservative... that's ignoring the fact they own more of the coking mine than when the estimate was done - the revenue from coking mine are not added in the aim because and I paraphrase "it's not budgeted in at start of the year"... but who cares about the budget done at the start of the financial year? As investors, locusts or whatever we are today, we want to know what earnings they can manage. See recent presentation - available on website [1] the numbers they are on line for are, if everything hits the mark, more like $1.33.
If you look at slide 19 - super size it up.. we have the numbers they want to hit... and the net income after minority interest they want is $40 million - I have them as having 30 million shares. So that works out $1.33 ish.
So, P/E 10 would be $13.30 so $10 is a realistic nearterm (months) possibility - if they hit the numbers I don't see why $13. $6.50 suggests no one is going to use coal next year (I disagree). I think the main problem with the stock is perception - if they think coal is the mainstay of energy generation for the next 20 years which the Chinese have been planning on then we have a way to go. If we think it's all going to be windfarms and solar panels and nuclear plants then we will trade at discount to value.
rich
[1] http://www.lnlinternational.com/files/LL_PPT_November_2009_3.ppt
CCME, researcher.. so you think its a reasonable scenario that no one can exercise for almost 1 3/4 years (think)?
Great news for me, was worried someone might force me,easy hold while it plays out.
rich
CCME, I've emailed IBD about the situation... can't hurt to ask.
rich
CCME, isn't scoring well on the IBD ratings... it looks like it's because there not enough data.... Composite rating is 59 v poor.
May be it needs more data... maybe IBD needs updating? Dunno... but from the numbers on IBD, currently, they don't look good.
rich
Yup, Novartis are opening big R&D I've heard about that somewhere as else.
Yup, China is doing vaccines for babies but not enough to stop the spread- think they've done 11 million babies. Even if they got 100% vaccination and 100% effectivity I suspect the 130 million with Hep B will provide a market for the foreable future.
As you say, I suspect all the prescriptions are just supressing the disease.
Hep C "cure" looks along the lines of a massive multidrug therapy race to be first - it's certainly big business and massive costs to do the experimentation. I suspect if someone was really after Hep B we will hear something first? Dunno... is anyone up on the new Hep B drug space?
rich
BSPM, Drex - the devil is in the detail... and they still look good for BSPM
I missed this bit previously .....
There are no advertising restrictions on BSPM, prescription drugs have strict limits on advertisement (supposedly).
I had thought it was everyone was restricted but I'm glad to know otherwise.
rich
BSPM, Bogus, can you comfirm the facts please?
Do you mean cure or do you mean suppress? I'm taking the following quote from Novatis diagnostic page... you'd think they would say "cure".
There is no specific treatment for acute viral hepatitis B. Chronic hepatitis B may be treated with antiviral drugs.1 2 However, many of those infected in developing countries do not have access to these drugs.
Patients with cirrhosis are sometimes given liver transplants, with varying success. It is preferable to prevent this disease with vaccine than to try and cure it.2 [1]
In general viruses are more difficult to treat, ask an HIV, sufferer. BSPM's drug also "cures" Hep B but what they mean, I think, is suppress the virus to a level that stops further damage to the body.
BSPM claims there "cure" is better than western because they have less side effects - heres another one
Finally, they won't be able to distribute the drug through OTC pharmacy chains like BSPM... as we know... no on will
rich
[1] http://www.novartisdiagnostics.com/disease-education/hepatitis-b-faq.shtml
[2] http://fdanews.com/newsletter/article?issueId=11339&articleId=104323
Jaytrader, the companies controlled by the government are SSE (state supported (? think or sponsored) enterprises) .....
Typically, these are inefficiently run and too many workers blah blah - additionally they get soft loans from the banks.
All the listed companies we talk about do not have these privilages. They are often reliant on capital raises through markets rather than loans. One thing you do want to note in any Chinese investment is their government contacts... life's much easier if you have good contacts in China.
rich
I understand trying to follow other models but as I say sometimes you've got to break it
PUDA's consolidation mines look like they are thermal. They gave thermal coal price quotes in their PR and not coking prices. As we know coking is unusual. 100% thermal looks likely and the conservative choice.
With the jianhie (my approx) it's a coking mine there are 2 seams 1 thermal 1 coking (I must be boring for repeation or what ). Are thermal seams 4 times larger than coking as your model suggests? Unless you know otherwise. No. I don't think so I think that would be unreasonably conservative. If you want to be ultra conservative 30 : 70 but 40 coking : 60 thermal seems a reasonable conservative choice.
Anyway, your model and good luck to ya. I must say, it's a busy board
rich
"For Jianhe I used a 40/60 thermal vs. coking mix to be on the conservative side" Two seams... 1 coking, 1 thermal... 40 Termal / 60 coking isn't conservative... 60 thermal : 40 coking would be more conservative I would have thought
With the 2 new mines they only quoted thermal prices in the PR. We know coking coal is unusual. I would go 100% thermal - anything else isn't conservative.
rich
Hello ckuratz,
ooh, It's much more fun when other people do the work...
ok...
Income Projection
A) LLFH Net income of 28% - if you look at the 10-Q [1] you can see that LLFH has to pay a lot of the net income to controlling interests. To get the actual net income margin you should use the net income with the controlling interest added. This takes you to 36%. L&L has a mix of washing, coking and heating coal which makes working a net margin difficult (assuming no breakdown).
B) Jianhe - the mine is a coking mine with two seams - 1 coking and 1 heating coal. I don't know the best way of dividing the % but 80 heating / 20 coking seems pessimistic. I would go with either 50 : 50 or 60 heating : 40 coking. Or give a range or something. Margins at least 35% and probably higher - 40%+?
2010 Projections for PUDA
AA. Unless there's melt down: The core of the business is going to do better than 2009 since, according to the forward business view was increased volume and hence revenue [2]
From [2] "The Chinese government's stimulus spending continues to support infrastructure and real estate development projects in China, and we expect our tonnage sales to improve in the coming quarters"
I think this is simply steel businesses have run down their inventory and this is a one time event - at the least you need to keep the volumes or more likely they will have to restock the inventory. I would work around Q3's numbers rather than Q1 & Q2... with potential that Q4 etc could be better.
I much prefer other people doing modelling work
rich
[1] http://www.sec.gov/Archives/edgar/data/1137083/000116854209000036/q07312009reviewed.htm
[2] http://finance.yahoo.com/news/Puda-Coal-Announces-Third-prnews-984560231.html?x=0&.v=11
SDA - I followed it for a while.. think it was a meat producing company that thought it was a financial house and made huge derviative bets and lost big money... Think they got bought up..
rich
CSKI - strong volume and at or around 52 week high.
rich
(no position)
The other huge mistake novice make is listening to fools like sag3 who post known losing concepts yet claim to make money, IE they are full of BS.
Yes, I think I was more worried about the posting dragging in other investors. Investors should read through all the information about the likely fraud and the CEO resignation and the lack of published audited accounts before ever considering this company.
rich
PUDA + Loans - free money more like. Looks good anyway - if it's loaned then it's a home run. Assuming copenhagen doesn't change the usage of coal signficantly (which I can't se happening).
rich
PUDA... playing with model
So, upfront they need $33,360,000 =(27800000 + 13900000) *0.8
The rest is paid in a years time.
Is the $11M secondary enough? Dunno.. looks tight from first impression...
I've forgotten how much cash they have on balance sheet (think they still had to make $5 M for coking mine)
100% thermal
Thermal 450,000 @ $59
Revenue $26,550,000
Income 9.3 M
35.00% Margins
EPS + 0.53
O/S 17.7 M
Upgrade finished within 6 - 12 months
Thermal 900000 @ $59
Revenue $53,100,000
Income 18.6 M
35.00% Margins
EPS + 1.05
O/S 17.7 M
rich
GCHT/WindPower - the questioning on CDM credits has put a halt on wind farms being signed off.
(Me thinking allowed) I assume it will get sorted out, however, perhaps it may make other low carbon power an alternative? China seemed to be doing more than anyone and perhaps CDM's changed their thinking in favour of wind? Equally possible that it's a negotiation tactic against China who are being uncoperative at the talks.
http://moneymorning.com/2009/12/18/copenhagen-talks-china/
Anyway, it even become to speculative for me - I have my popcorn and watching from the side lines. If I miss it shooting up, I'll live
rich
YONG, Drexion.... I did some sums they can double production by maxing out through the winter... dunno if that's what they can do... they can certainly hit 50% sales growth this year.
So
Q1 Inventory 22,201,250
Q2 Inventory 26,760,401
Q3 Inventory 30,954,407
They Did $46 Million in Q2 so they can Do $46 rev and still increase inventory. They started Q1 with 22 million.. I suspect they can start it higher in 2010.
rich
CBPO 180K Vol vs 80K 3M Avg. Fourth high vol day...
rich
YONG, bogus... I moved my EPS down a notch or 2 after looking again.. since Q4 they made a loss last year. They are having traction in the South of the country so perhaps they may break even or make a small profit?
I missed the mine thing... though others were talking about it...Given that we've seen price of coal is rising... it's probably not a bad idea to lock in the price.
I think your pps target is far more realistic than mine... As long as they get the sales I'm happy.
rich
YONG, probably right Q4 they estimate $6.6 Million on the low end but they managed to make a loss last year in Q4 on $2.7 Million rev. Sooo.... $0.51 ish would be better estimate to work with.
rich