I am updating my staus.
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LLEN - my thoughts are we know they have 3 mines and we know they are getting at least 300K tonnes of coal per year. So there's a base line to the value of the company.
The argument the detractors have made is the margins are higher than most. The JPM guy on the CC described it as "LLEN is on the bottom quartile on Chinese cost curve?". LLEN themselves claim they have a "lean and mean" operation (I guess you could attribute it to the bean counter mentality of the board down?) and that they provide a service by buffering supplies of the coal and supplying it when needed at a higher margin.
I know you were looking at margins - did you think 22% was too much? Even if you half the earnings the forward P/E is around 10 - compared to, think, 16 for the industry average.
I can't see how you can fake the Bowie mine expansion? *If* they start exporting to China it would be a silly short.
I can't believe this is an outright fraud. Really, not sure what people expect at this point. My feeling is that this is one massive volatility high for the hedge funds.
It's an "odd" situation.
rich
LLEN - hmm... another top4 ex-director on the board. I guess these guys are suckers for wanting mud on their CV or LLEN are by the book.
Hehe, who would want to own a boring share?
rich
LLEN - When LLEN have had problems Redchip, frankly, look panicky in the first dive it was "Shorts will rue the day PR..." then redchip encourage the quick hiring of the CFA (or something or other guy) and then the we will review auditor in 3 Months. LLEN I think have got rid of the CFA and certainly we've had no review. It just looked a bit of an ugly panic.
Then Redchip touted LLEN without, it seems, disclosing their interest causing more bad press.
Redchip are the poster child for IR for reverse mergers. They are going to be put under the spotlight - hence why CNBC article ended up targeting redchip and not reverse mergers. I don't think it's a bad idea for LLEN and Redchip to go their separate ways.
LLEN have the obvious struggle with the shorts at the moment and I just don't see how Redchip can help now. They've done quite enough already.
rich
Not pretty by any means but it was mainly a one time event. There was additional expenses for a sales office in Beijing which should be kept an eye on.
I should have a read through it again.
rich
Well, as of 15th Nov preferreds were down from the original 14M to 2.7M. So, I doubt there's much left if anything to dump.
There are millions of warrants. I think they've stopped them doing non-cash conversions? (Even if someone is converting warrants non-cash they won't last long - it will take many warrants conversion to make 1 share at these prices). If they have to do cash conversions - good that will be a nice war-chest for the next move.
rich
Shorting China: Waiting for the Great fall
http://www.economist.com/node/17966936
rich
China to invest 2t yuan in water projects in next 5 years
$303Billion
http://www.chinadaily.com.cn/business/2011-01/21/content_11895672.htm
rich
LLEN - US Operations - Do the math (Yahoo post)
If anyone knows the coal business this port cooperation is huge. Just spoke to my coal colleague and here is his explanation why....
Bowie historically produces 5.0 million tons of coal. Contracts with TVA for 3.5 million tons.
Leave 1.5 million tons. If they get 1.0 million of super compliance coal to sell to china here is my estimates to how it breaks out.
Mining Costs: $35.0 per ton. (his high end estimates with long wall mining)
Transportation Costs: $30.0 per ton. (his high end estimates)
Blending Cost $5.0 per ton. (his high end estimates)
Total Costs: $70.0 per ton.
Blend it with 1.0 million tons of Chinese lower quality coal that they acquire in China (can't be sold unless blended with really good coal to bring it up to standard) for $50.0 per ton.
You then have 2.0 million tons of coal in china with average costs of $60.0 per ton.
Transportation to customer $10.0 per ton on rail (high end estimate).
Total costs $70.0 per ton.
His estimate of current coal prices in China $120 per ton.
Just off current opportunities that would translate to $100 million in pretax profit a year.........
Not a bad focus for the company. Given its bilingual and global management team and board members. Nice being involved with people that have vision and drive to execute on being a value added business.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_L/threadview?m=tm&bn=106842&tid=13643&mid=13643&tof=2&frt=2
Awww, go on... you wouldn't want it any other way...
rich
LLEN - US Operations - Do the math (Yahoo post)
If anyone knows the coal business this port cooperation is huge. Just spoke to my coal colleague and here is his explanation why....
Bowie historically produces 5.0 million tons of coal. Contracts with TVA for 3.5 million tons.
Leave 1.5 million tons. If they get 1.0 million of super compliance coal to sell to china here is my estimates to how it breaks out.
Mining Costs: $35.0 per ton. (his high end estimates with long wall mining)
Transportation Costs: $30.0 per ton. (his high end estimates)
Blending Cost $5.0 per ton. (his high end estimates)
Total Costs: $70.0 per ton.
Blend it with 1.0 million tons of Chinese lower quality coal that they acquire in China (can't be sold unless blended with really good coal to bring it up to standard) for $50.0 per ton.
You then have 2.0 million tons of coal in china with average costs of $60.0 per ton.
Transportation to customer $10.0 per ton on rail (high end estimate).
Total costs $70.0 per ton.
His estimate of current coal prices in China $120 per ton.
Just off current opportunities that would translate to $100 million in pretax profit a year.........
Not a bad focus for the company. Given its bilingual and global management team and board members. Nice being involved with people that have vision and drive to execute on being a value added business.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_L/threadview?m=tm&bn=106842&tid=13643&mid=13643&tof=2&frt=2
LLEN - interesting, so they have high quality Colorado coal and now doing feasibility study on a Chinese port to store it in. I guess the market will want to see coal shipping before they are convinced.
Bit I missed is that you take the high quality coal and blend it with some Chinese low quality - hence why it mentions blending in PR.
Assuming it's profitable I'm sure some coal users would like a non-Australian source of coal, esp after the flooding.
rich
NEP/Hong Kong Accounting - I think it was Baker Tilley HK that bust NEP and made them go through their accounts forensically. Regardless, Hong Kong accounting would seem to have a better reputation than the mainland[1].
At least one big investment bank is said to be reluctant to use any accountancy outfit other than the Hong Kong offices of the big four for public offerings, because of concerns about the quality of the work.
[1] http://www.economist.com/node/17633120?story_id=17633120
rich
NEP PR said $60M in cash Dec 31st. That's around a $10M increase in the quarter. That compares to the rain affected Q3 where they put on $5M.
It's not science or anything but the cash seems to augur the production returning to nearer normal Q4? Or am I reading too much into it?
rich
YONG News Store update
http://ih.advfn.com/p.php?pid=nmona&article=46100250&symbol=YONG
They were aiming for 23K but ended the year with 24K. Still aiming for 50% sales growth in 2011 and 2012.
rich
BSPM - even if they announce a $3B order of Xin Ao Xing Oleanolic Acid the ******* stock will go down
We don't know how many get invited? SCOK is also a representative.
rich
I agree that groupon has the mind-share of investors in group discounts but there's lots of groupon like companies - think Amazon is pouring $175M into one of the clones, Living Social. So, I'm imagining the clones are growing in China as well.
Anyway, I am being too negative. The success of CCME's Groupon clone is dependent on the success of their SWITOW website. They have every chance of making it a success providing they can convert riders into buyers.
rich
Well, unless there's some information about the competitive positioning in China of the various Groupon clones I would heavily discount the news. Groupon feels like something with low start-up costs and likely to be heavily copied.
Would love to be proven wrong!
rich
There has been talk of CCME providing an online ticketing solution for buses. If the bus queues are anything like the rail network queues then clearly it's something that would be successful as the current system can't handle the Chinese New Year rush.
On completion of a successful online ticketing solution the Chinese are going to be standing around in the snow a lot less. I would suggest, heartily to the board, shorting any snow shoe stocks you can then find.
rich
5 Hour Queue to purchase train ticket
- It is new year holiday time
- This is trains
But you can see that 5 hour queues are a waste of everyone's time.
Liu's wife queued for five hours, but still could not purchase tickets for ordinary trains and the price of a ticket for a second-class seat on the high-speed train plying the railroad between Hangzhou and Nanchang, capital of Jiangxi, was 199 yuan.[1]
Now, where is CCME's online-ticketing solution already?
rich
[1] http://www.chinadaily.com.cn/business/2011-01/18/content_11875346.htm
Hit Pieces: No point releasing hit piece today and give 3 day weekend for company to respond - even TSTC would get a denial in that time, probably.
*turns back on computer screen for much needed rest*
rich
CELM - I'm glad they talked about competitors. There's been a few too many surprises about how Chinese technology companies compare to their competitors. This will at least supply a starting point.
rich
CNAM Update from Apollo minerals - unfortunately written in Klingon. If anyone can read Klingon please be kind enough to translate.
rich
--------------------
Update I received from Apollo Minerals
I asked if they had a clearer time line on when the drilling report will be released. I asked for an example---say "mid Feb"?? Here is their reply (This is from a representative of Apollo Minerals, not CNAM).
"Thank you for your query. We are currently awaiting the final head assays from this drilling program. Once these are available we will be finalizing the intervals to be composited for DTR tests. These might take a month until results are available. We do not currently intend to report head assays until we have the DTR results as head assays alone can tend to be misleading. So, your comment of "by mid-February" would be our hoped for position.
Regards
Andy Border
Apollo Minerals
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=102178&tid=20170&mid=20170&tof=5&frt=2
Update from Apollo minerals - unfortunately written in Klingon. If anyone can read Klingon please be kind enough to translate.
rich
--------------------
Update I received from Apollo Minerals
I asked if they had a clearer time line on when the drilling report will be released. I asked for an example---say "mid Feb"?? Here is their reply (This is from a representitive of Apollo Minerals, not CNAM).
"Thank you for your query. We are currently awaiting the final head assays from this drilling program. Once these are available we will be finalizing the intervals to be composited for DTR tests. These might take a month until results are available. We do not currently intend to report head assays until we have the DTR results as head assays alone can tend to be misleading. So, your comment of "by mid-February" would be our hoped for position.
Regards
Andy Border
Apollo Minerals
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=102178&tid=20170&mid=20170&tof=5&frt=2
Thanks Toodmo, updated board eom
rich
CFO speaking hands-down best introduction
Talking at: ICR XChange Conference
- Mention they supply BYD - Buffett's way of playing China automotive market.
Talks about getting the buildings in detail - he thinks they can get 50% of the value as a bank loan and also how some customers look at your balance sheet and if they don't see you own property they don't do business (not heard that before).
Should be direct link to talk:
http://investor.shareholder.com/icr/2011/eventdetail.cfm?eventid=90498
Otherwise this is it:
http://investor.shareholder.com/icr/2011/
rich
CELM -CFO speaking hands-down best introduction
Talking at: ICR XChange Conference
- Mention they supply BYD - Buffett's way of playing China automotive market. (New they did but lost the reference)
Talks about getting the buildings in detail - he thinks they can get 50% of the value as a bank loan and also how some customers look at your balance sheet and if they don't see you own property they don't do business (not heard that before).
Should be direct link to talk:
http://investor.shareholder.com/icr/2011/eventdetail.cfm?eventid=90498
Otherwise this is it:
http://investor.shareholder.com/icr/2011/
rich
CCGY - It was recently suggested on the CGS board that CCGY uses Frazer Frost as an auditor.
This is incorrect, however. CCGY did appoint Frost at the beginning of 2010, but they quickly switched to Friedman LLP in April 2010.
http://www.friedmanllp.com/home.php
-------------------------------------------
I'm forwarding Toddmo's posting on CCGY board.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=58783911
Friedman is also listed on fixyou....
http://www.fixyou.co.uk/tracker_auditors.php
rich
9% ish increase in net income when I plug that into v80alue's model.
So Quarterly income from 31.8 to 34.6. Don't worry about the decimal points just get the feel of the affects those airport contracts have
rich
CCME 9% ish increase in net income when I plug that into v80alue's model.
So Quarterly income from 31.8 to 34.6. Don't worry about the decimal points just get the feel of the affects those airport contracts have
https://docs.google.com/leaf?id=0Bx1PAGtqlPFEMDllNWUzYjktZjZhZS00OTY1LWJhOGMtNThlOTBkNDcyNjgx&hl=en&authkey=CKju-OcD&pli=1
rich
It would be interesting to know if any of the bus advertisers are also trying to sell things through SWITOW? I don't have a list but, if not, clearly there is another advertising opportunity.
It like to imagine those dancing apple adverts playing on repeat with the passengers gripping the SWITOW magazine. Be like shooting fish in a barrel.
Not bad for a niche advertiser with threatened margins
rich
NEP - did anyone have any doubts? hehe
rich
Yuan hits new record high at 6.5997 per USD
More $ EPS for us.
http://www.chinadaily.com.cn/business/2011-01/13/content_11844367.htm
rich
CCME Advertisements nearer the point of sale are worth more
I was reading economist article that mentioned Facebooks vs Google's adverts - and that since Google is nearer the POS it gives the advertising more traction. Obviously, since I think of nothing else, I thought SWITOW is CCME's way of enhancing the value of their adverts by bringing them nearer to the watchers acting on their impulse, I mean carefully considered choice, any success will be a double victory for the sales revenue and increased advertising rates.
Moreover, Facebook has nowhere near as robust an advertising model as, say, Google, whose search-related ads are served up to users when they are often on the point of making a purchase. Much of Facebook’s revenue comes from low-end display advertising.
[1] http://www.economist.com/node/17853336
Advertisements nearer the point of sale are worth more
I was reading economist article that mentioned Facebooks vs Google's adverts - and that since Google is nearer the POS it gives the advertising more traction. Obviously, since I think of nothing else, I thought SWITOW is CCME's way of enhancing the value of their adverts by bringing them nearer to the watchers acting on their impulse, I mean carefully considered choice, any success will be a double victory for the sales revenue and increased advertising rates.
Moreover, Facebook has nowhere near as robust an advertising model as, say, Google, whose search-related ads are served up to users when they are often on the point of making a purchase. Much of Facebook’s revenue comes from low-end display advertising.
[1] http://www.economist.com/node/17853336
BSPM - Hi Rick, I don't know if we've presented a strong enough case to you. What I would say is that clearly there's some interest in the stock on the board Personally, I do hope you can make a meeting with BSPM.
rich
BSPM's growth - they were asked by an investor at the CC rather than wanting to give an estimate. They wanted a bit more time to firm it up.
They were saying in the region of 30 -35% but wanted to wait until 2011 guidance for more detail.
rich
BSPM - Well, it's interesting that it's a company that has, on SEC paper at least, improved it's cash generating metrics. Last year they were muttering about a dilution but as the valuation tanked they didn't do a stupidly low raise (at least so far ) instead they did a more sane thing of changing the terms offered to the distributors - you can see that the cash on the balance sheet has gone from $8.6M Q1 to $16.5M Q3 - which I work out as changing from $0.32 to $0.60 a share on a $2 and change stock in 3/4 of a year.
The story goes that changing the terms caused the distributors to delay their buying. In the CC they suggested that the ordering was now strong and recent PR'd numbers suggests that they could hit the low end of guidance 63 cents for the year.
The theory, I've read at least, is that while cash can be faked it's more difficult so this cash flow is a positive development and an adaption to the China fear (any views to the contrary are welcome).
Another interesting move was that mid September the CFO thought, understandably, that top4 was a waste of money (and he's worked for Earnst and Young so he should know) [1], and they already used Mazers, but come the Nov CC they wanted a TOP4. So, something has changed his mind in a month or 2.
He was also talking about disclosing the SAIC filing but I haven't seen that. That sort of idea is quite leading edge in the China space.
Anyway, clearly this guy's knows accounting and is at the sharp end of the P/E decline and adapting the business to this contraction. I would have thought he would have been interesting guy to talk to.
rich
[1] http://www.otcjournal.com/Fund-Managers-Say-No-M-s-to-China-Stocks/af/archive/20100919-1/
YOKU - oh yes, an IPO. It got some stick for being overvalued. I didn't read Albert's article, ahem fully, but I don't think Google have got their Youtube site to make a profit so might be an interesting short idea for the board.
rich
YOKU - short article from Alfred Little
http://seekingalpha.com/article/246088-youku-business-model-already-failing-stock-should-follow-suit?source=email_watchlist
rich
CGA probe (link) - good shows that, surprise surprise, they aren't trying any new research but probing the well known story.
http://www.thestreet.com/story/10971670/1/sec-probing-china-green.html
rich