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I did it in Google Earth with the tool for measuring distance and paths.
I also did it in Google maps where the scale appears in the lower left corner. Granted, these techniques are not certified, but I didn't claim they were.
The horizontal measurement of diameter is multiplied by itself, as the tank volume equals area times height, or PI x R-squared x H.
So if google earth was off by 7 percent, the error propagation would give a volume calculation error of 1.07 x 1.07 = 1.15 or 15 percent.
And the estimation of height as equal to the ratio of (height over diameter) from a land photo multiplied by the diameter measured separately could also have about a 7 percent to 10 percent error due to, among other things, projection angles in a photograph.
This is the last post I am going to make. I do not wish to be associated with shortselling because that is not what I do.
However, as I intend to post on other I-hub boards from time to time, any attempts at slandering me will be met with appropriate notification of I-hub administrators.
Just calling it as I see it. Over the years I have learned to try and keep my eyes and mind open to new information, although many times I suffer from just as much confirmation bias as the next guy.
Based on the information I just read and confirmed, that is a pretty substantial exaggeration on the storage capacity of not one facility, but all three facilities.
I am not here posting this to drive price down so I can buy back cheaper. I have made $$$ in LPH three years in a row, but I will not be buying back a fourth time.
The reason I am posting this is in case others don't want to lose money. My guess is that the exaggerated storage tank sizes show up in a hit piece in the next couple weeks. Of course I could be wrong.
However, I have both made big $$$ and lost big $$$ in RTOs in the past, so in general I don't take the shortseller allegations lightly. In this case I checked in out myself and their arguments are essentially valid. Whether other shortseller opinions are just mud-flinging b.s. or actually have merit, I have no clue. Many times I have held on to this or other stocks while the mud-flinging continues. However, this particular tid-bit of information was sufficent to change my opinion permanently on the honesty of this company.
So 1bohica, I wish you the best of luck and profits. I will not return to the LPH board, not because of your admonition, but because that is just my personal ethics.
It would help if they didn't exaggerate the nameplate storage capacity of all three facilities - see yahoo post from today. FYI - heads up. Good luck people, this time I won't be back for a 4th buy.
$LPH Nov sales volume increased 23.2% MoM at its Huajie facility!
Way to rock...on target for 2013 FWD EPS.
Also they clarified independent facility appraisal and acreage estimates, very responsive new IR firm! All good signs.
$LPH: MoM sales uptrend repeat pattern catalyst.
MoM growth will be shown in product sales for November, which repeats the pattern catalyst that started after Huajie figures began being released. Calm before the uptick. This stock is an excellent pick for those who want to buy and sit back - you know which direction sales are going for the next 6 quarters, and PPS will follow. Huajie ramp-up plus economy picking up in China make for a double catalyst for the foreseeable future.
Longwei Petroleum (LPH) sales to increase QoQ steadily over next 18 months.
A good choice for an aggressive investment strategy is to focus on small cap energy stocks with an excellent track record and with a high short term growth catalyst.
LPH has one of the highest catalysts for strong and steady QoQ growth ahead, as they closed an acquisition in late September for a new turnkey facility that is expected to provide 70% upside to EPS over the next 6 quarters.
LPH has been well-vetted, having completed in July a reconciliation of SAIC/SAT tax filings verus SEC filings that covered three years (7/1/09-3/31/12), in which their auditor directly confirmed filing data on PRC computers in the state tax offices.
Longwei has operated in a shareholder friendly manner, with a track record of rescinding an S-3 two years ago because the CEO (who holds a 33% stake) did not want to raise capital for expansion at depressed market prices that would have reduced shareholder value via dilution. Instead, they took the long road of saving for almost 18 months and plowing profits into an acquisition of a third facility. In addition, at the end of November, the company let 10 million stock warrants expire worthless, which eliminates any and all warrant overhang on the stock.
The company has grown from one facility with 50,000 tons oil storage capacity in 2009 to three facilities and 220,000 tons oil storage capacity in September 2012. LPH's CEO has been with the company since its inception 17 years ago. They executed good planning prior to their latest acquisition, with having recently rebuilt inventory levels and lock-in advances at refineries, as well as having sales staff on the ground for months in advance at the new facility location, so that when the deal closed, within 15 days they were selling oil product from the new facility, and within 30 days they had 16 major customers who had signed contracts.
Overall, EPS is expected to grow from trailing 12 months EPS of $0.62, to a TTM EPS of $0.77 by this coming June, and then to an EPS of over $1.00 by the end of next fiscal year. The company has engaged a new IR firm and has taken steps to provide continuous PR news updates as monthly sales figures become available and as any developments occur.
After passing resistance at PI*r^2, the next height (H) the stock reaches depends on volume (V) = PI*r^2*H
PI is a known resistance level for cylindrical tank farm stocks. Once they pass that level, the next resistance is PI*R^2
Comparable facility cost in Maxsoarfinancial July report.
The cost paid for Huajie is comparable to the 2008 construction of a 600,000 ton Tianjin oil storage facility which cost $314 million. A comparables analysis of construction costs was conducted by maxsoarfinancial and published in their July 31, 2012 research report. It was built by Tianjin Anjiu Oil Storage Company, Limited (AJOS) and is located in Port Based Industrial Park in Tianjin City. Built in 2008 with a storage capacity of 600,000 metric tons, it was designed to transport oil in and out via railraods as LPH facilities do, and also some portion via waterline. The quality of the recent construction and newer safety requirements, along with a timeframe within a couple years of Huajie, yields a cost structure that is analogous with respect to Huajie construction services. MaxSoar's cost analysis predicted that if the same construction company had built Huajie it would have cost around $125 million, $19 million higher that LPH paid for Huajie when it signed the deal in March 2011. In addition, between 2008 and 2011, construction costs went up.
Someone should put that on the Yahoo board in response to the tag team that has been relentlessly bashing this particular point all day long. They must be working a half dozen different computers because other folks have run out of posting priviliges but not that duo of bashers, who have probably posted around 50 posts today between the two of them.
2.60s by today's close.
That would not be legal, for sure.
My understanding is that redemption requires registering the shares that are created which involves some timeframe - perhaps similar to the settlement time for stocks. After that time you have a live share that can be held or traded.
And no, I do not think 100 percent of the volume in the last 3 days was warrant redemption. Frankly, it is likely that less than 10 percent of the volume was redemption because folks could have bought shares on the open market a week ago for $1.90 to $2.05. And the rebound volume from $1.90 back up to $2.15-$2.20 was quite small, indicating not many folks were buying.
The recent dip was not caused by MMs trying to sell off LPH or manipulate price. It is a basic principle of the stock market that when the whole market pulls back suddenly, resource stocks such as oil, materials, metals, and commodities dip all at the same time and no stock is immune.
The reason for that behavior is just that other investments suddenly become more attractive bargains if the overall market goes through a sudden fear-related pullback. In such cases, there will always be a few holders of LPH that might sell for no other reason than to take advantage of the sudden sale price in other stocks.
Thx a bunch. I don't like lurking much
"One of the @admins in this room has bounced you for violating their chat room rules. You may enter again in approximatly 21 to 22 hours."
Pal Talk needs better moderators. Moderators in I-Hub are generally excellent and give fair warning. Mods in Pal Talk are bouncing traders for humor, without warning.
IMHO they extended to avoid issues with the 11.5M warrants held that would have expired at a time when the stock market was closed due to hurricane Sandy emergencies. There could be a big payout to the ambulance chasing lawyers if they sued over lost income had price continued to rise.
But it is interesting that someone kept goosing the bid right up to near $2.25 but not beyond. That would be consistent with RedChip getting extra fees for keeping price over that milestone. They did have some fees like that in the old days. The trouble with that approach is that it would cost them a lot more in stock purchases on the open market versus what they would get back in extra fees for the month where price hit the threshold every day. The other possibility is that a fund has plans to make this stock take off AFTER it hits expiration, and they want to slowly accumulate up to $2.25 without triggering any warrant dilution up until that time where they expire and it doesn't matter.
LPH trades with lower beta versus before acquisition. The stock now behaves as calmly, or even more so, than the sector of medium-size oil stocks in the US. Dips will be bought from now on.
The reason for this is three-fold:
(1) The closing of Huajie Petroleum proves LPH could deliver on a promise made 15 months ago to investors to acquire a $106M company solely using internal profits and not by shareholder dilution.
(2) The completion and publishing this last July of an accounting reconciliation performed by their auditor, comparing LPH's SAIC tax filings directly from the source - SAIC computers - versus the SEC filings. This audit proves that LPH earnings were exactly as stated in SEC filings looking back over more than a year of recent performance.
(3) The organic growth of LPH from a 120,000 metric ton, two-facility operation into a 220,000 metric ton, 3-facility operation will eventually put them close to being a billion dollar revenue operation in the next couple years. That puts LPH into a different asset class with lower beta due to their more diversified geographic and customer base, and greater size compared to the small cap universe.
While LPH will never trade with the low beta of large caps like Exxon (XOM) or CNOOC, it does now trade much closer to larger cap China stocks that are typically represented by ADRs, or like medium-sized American oil stocks that have a steady business model, as opposed to trending like the old days when their stock price fluctuated similar to other small cap Chinese RTO asset classes.
The chart isn't the reason for a pullback. Look at the big picture here, macro-wise. Many oil stocks have dropped similar amounts recently on nothing that is company-specific. If LPH was listed in Hong Kong instead of on the US exchange, PPS might not be down. But US markets are down so after some point traders will sell good positions just to be ready for further opportunities in the markets when the overall markets create bargain price opportunities in many stocks. Personally I think LPH has more upside than any of the bargains in other stocks, due to the combination of already being undervalued at a P/E in the low 3s, combined with 70%-75% EPS growth looking at forward quarters as a sure thing.
See LPH board for earnings CC notes:
$LPH CC: 16.5% EPS increase, 18% volume oil sold increase for 09/30 Q. Current Q even better so far this Q. 16 major Huajie customers now have signed contracts with LPH.
CFO stated company plans to let warrants expire worthless as of November 29, 2012. He said he realizes that warrants have held the stock price back lately.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=81484254
Earnings CC highlights from my notes (only things not already in the 10Q and prior news release):
- In the last few days LPH has signed ANOTHER 7 MAJOR NEW CUSTOMERS for Huajie, bringing the total to 16 major customers
- No new revenue estimate for Huajie facility for this quarter at this time, company will release that in the future. Prior guidance for FYE 6/30/13 was based on pricing of oil as of September.
- Are they exploring going private? LPH gets 1 to 2 calls per week from funds asking if they are considering going private. All options are on the table. To protect shareholders in that event, LPH would have to go out and get a couple of new outside directors to make sure smaller shareholders are protected. There would be tremendous upside potential. Peers are currently trading at 8 to 12 PE, while if they were listed on Hong Kong peers trade at a PE around 15. Managment cannot go into any more detail other than to say if they did take this route, smaller shareholders would be protected.
- Are they considering a dual listing as opposed to a take-private deal? LPH is certainly exploring that as an option.
- Where were the Fanshi customers in the region of Huajie previously getting their supply needs met before LPH? Customers were using competitors located at some distance away from Fanshi. Local government leaders and businesses were looking for a reliable supply located in closer proximity to Fanshi.
- How has capacity utilization at Taiyuan and Gujiao been during Q1 and so far in Q2? These two facilities were running at 45% to 50% of total capacity. It depends on how quickly they want to turn inventory - typically LPH turns inventory about 8 times per year.
- How are sales and revenues trending so far this quarter? This quarter so far is trending ahead of last quarter in terms of dollars and volume of sales from the two exisiting facilities.
- What is the projected timeline for Huajie getting up to full inventory and sales? Huajie is expected to make a decent bump in total sales and net revenue for the current quarter (Q2). The third quarter will really start to make a substantial difference in total revenue and net income.
- Based on past history with other acquisitions and looking forward, at what point in the calendar would LPH be at a point with full inventory and enough cash to where they will be looking to consider acquiring a FOURTH FACILITY? Because Huajie is in a new geographic region that is not overlapping like Gujiao and Taiyuan, the capacity and sales ramp will be larger than with Gujiao. Therefore, LPH will not be considering any further acquisitions until about fourth quarter of next year. At this time there are some smaller facilities available out there that are older and would need some refurbishments.
- At what point will Mr. Toups become a dedicated 100% CFO for LPH? Toups said he essentially considers himself full time CFO for LPH right now. He has only been in the USA for 3 weeks out of the last 6 months, since he has been based in China for all of this timeframe.
- Why are they looking at an investor conference now? Have they seen interest by funds to attend? Yes, funds are interested and want to attend. LPH wants to increase awareness by funds, analysts, and investors to heighten awareness of LPH, improve transparency, and increase liquidity of their stock.
- LPH current auditor is based out of Salt Lake City, Utah, an American firm. Does the auditor visit LPH more often than once per year? The auditor spends the most time with LPH during annual audit. The auditor is involved year round and comes out about 2 or 3 times per year, typically. The auditor was very involved in the Huajie acquisition and are involved with LPH at various time in the year.
- How does LPH plan to handle warrants that are scheduled to expire November 29? Why were they extended? The warrants were extended because holders had requested an extension of the expiration date due to the emergency closing of the US stock market at the last days of October. Given the number of funds involved and the size of the warrant holdings involved, LPH felt it was prudent to grant the extension.
Mr. Toups stated that the company has no intention to further extend the warrants beyond November 29, and plans to let them expire on November 29. Mr. Toups believes the warrants have held the share price of LPH stock back in recent weeks and that the stock may move up after the warrants are allowed to expire.
Closing remarks: Mr. Toups realizes that many of the participants have been shareholder in LPH stock for a long time - through periods of higher and also lower share price and varying market conditions. He wants to remind shareholders that he believes LPH is going to do very well in the coming months and that shareholders will be well rewarded.
LPH 10Q shows 16.5% net income growth YoY due to oil demand rebound in China, which is expected to get stronger in this quarter.
LPH earned enough last quarter to have $23.7M cash to close the acquisition of Huajie, support inventory levels at their 2 facilities in Taiyuan and Gujiao, and still have $14.4M cash on-hand leftover as of 09/30.
At this rate of cashflow generation (roughly $38M per quarter), LPH will not need to consider any type of bank loan or other financing to raise around $50M to fully stock Huajie Petroleum inventory levels within a timeframe of 1.5 to 2 quarters.
Rampup will proceed faster than originally projected, IMHO.
$LPH earnings were 18c EPS, sharecount 100.961M, and they had $14.4 M cash on-hand as of 09/30 (good for building inventory for new facility)
10Q: $0.18 Q EPS, $14.4 M cash on 09/30, sharecount 100.961M shares
As GlobeTrade busy with repairs, $LPH earnings after hours today, one of his favorites. Already know that the volume of product sold was up 18% YoY (that was before the end of September acquisition).
$LPH earnings After Hours today. Already know oil product sold volume was up 18% YoY for the quarter. CC tomorrow 10am EST
According to the Long Island Power Authority website, there are still about 161000 residents still without power as of November 9.
There is an outage map on their website. It looks like most outage customers are located near NYC:
http://www.lipower.org/stormcenter/outagemap.html
Lynas Basket price $41.97; Lanthanum oxide $13, Cerium oxide $16.
At those prices the company won't be profitable, IMHO.
http://www.lynascorp.com/page.asp?category_id=1&page_id=25
Agreed. The next leg up has to be a breakout from around $2.31, which won't happen until ONE of the following events occurs: (1) expiration of warrants, or (2) news release which quantifies Huajie sales which demonstrates substantial impact to net revenue and EPS, or (3) news of a bank loan to fill Huajie tanks, or (4) news of a take private offer.
It will go where they want it to go. Bigger players involved here. I don't think any number below $2.75 is a problem for warrant redemption based on what the behavior was back in 2010 when they allowed cashless redemption for the price differential between share price and strike price of $2.25, yet even with a much higher share price than exists now, and even with a sweetened cashless offer (which no longer exists), and with many weeks in the calender to redeem warrants, back then only 2.5 million warrants were converted into shares. This time around there is no cashless warrant redemption allowed. Holders have to actually pay up hard cash - the strike price - to redeem for each share. My guess is that they aren't bothering, and that no one cares (except retail) if the PPS goes 10, 20, 40, or 50 cents above strike price for a couple weeks. It just won't end up causing more than 0.5 million to 1.5 million redemptions, which is in the 1 percent range.
Mean, low, high PPS estimates over 18 months, based on separately estimating TTM P/E (mean, low, high) and TTM EPS (mean, low, high), then multiplying P/E x EPS = PPS.
Reader's Digest Final Answer:
Using 18 months price targets, mean PPS = $4.72, low = $3.30, and high = $6.14.
Converting an 18 month period to an annualized rate of return (assuming gains were steady throughout the period):
Annualized rate of return of 70% on the average, with an uncertainty interval ranging from 34% annualized return to 103% annualized return.
---- Supporting data:
I am 90 percent confident that LPH's EPS growth percentage and EPS growth timeline after the Huajie acquisition will be very similar to the Gujiao acquisition 3 years ago. The same CEO runs the company and has been with the company since its inception 17 years ago, so he understands the business model and knows how to orchestrate expansion.
After acquiring Gujiao in 2009, EPS grew from about 0.28 when it started up in January 2010 to a mature sales and inventory of Gujaio that displayed TTM EPS of 0.62 as of 6/30/11.
Also, note Huajie facility is located in a new, not overlapping geographic region compared the 2009 acquisition. Note also Huajie storage capacity is 100,000 metric tons versus 70,000 metric tons for Gujiao.
Over the next 18 months, EPS could grow from $0.61 to $1.01, or a $0.40 increase in EPS, given that Gujiao grew EPS by $0.34 over an 18 month period.
However, I will factor in some uncertainty intervals into these estimates because oil prices can go up and down, slightly changing margins within any couple of quarters, but in the long run wholesale margins should be supported via LPH's arbitrage capabilities, and since demand for oil needed for vehicles and industrial uses in China has nowhere to go but upwards over the medium term.
Over an 18 month period starting 1/1/2013, I am roughly 90% to 95% confident that LPH current EPS of $0.61 will increasing at least by $0.35 and as much as $0.50. And I am also about 90% confident that the range of P/E in the future should be above 3 because of the manner in which LPH established legitimacy with their SAIC/SAT tax filings reconciliation. So a confidence range for P/E in the next 18 months would be a values between P/E = 3 and P/E = 6.
When you estimate price targets by mutliplying P/E times EPS, one should contract the endpoints of the uncertainty range for each variable by about 25 percent, since the combined uncertainty will be less than that of combining the worst and best cases for each variable.
EPS 18 months out average estimate is 0.425 = (0.35+0.5)/2. Assuming TTM EPS increases between 0.35 and 0.5, the uncertainty interval is mean plus or minus 0.075. 75% of the uncertainty interval is 0.05625 for the purpose of calculating PPS.
Low end TTM EPS estimate for 18 months out = 0.98 (equal to 0.61 + increment of (0.425 - 0.05625). The high end TTM EPS estimate for 18 months out = 1.09 (equals 0.61 + (0.425+0.05625).
TTM P/E 18 months out average estimate is 4.5 = (3.0 + 6.0)/2. Assuming TTM P/E ranges between 3.0 and 6.0, the uncertainty interval is 4.5 plus or minus 1.5. 75% of the uncertainty interval is 1.125 for the purpose of calculating PPS.
Low end TTM P/E estimate for 18 months out = 3.375 (equal to 4.5 - 1.125). The high end TTM P/E estimate for 18 months out = 5.625 (equal to 4.5 + 1.125).
Multiplying the low end TTM P/E times the low end TTM EPS you get low end PPS target 18 months out:
PPS low end 18 months target = $3.30 = 3.375 x $0.98.
Multiplying the high end TTM P/E times the high end TTM EPS you get high end PPS target 18 months out:
PPS high end 18 months target = $6.14 = 5.625 x $1.09.
Bottom line, about 90% to 95% confident of a price target between $3.30 and $6.14.
Mean price target is $4.72, with a 50 percent chance of being higher or lower from there.
Using 18 months PPS targets mean = $4.72, low = $3.30, and high = $6.14,
Annualized rate of return is given by (annual return) ^ (18/12 months) = (total return), where the carat (^) means raised to the power.
18 mo. rates of return (R.R.): Mean RR = 2.22 = ($4.72 PPS mean target / $2.13 current PPS)
Low RR = 1.55 = ($3.30 PPS low target / $2.13 current PPS)
High RR = 2.22 = ($6.14 PPS high target / $2.13 current PPS)
12 mo. annualized rate of return: Mean 12 mo. RR = 1.70 = 1.55 ^ (12/18)
Low estimate annualized 12 mo. RR = 1.34 = 1.55 ^ (12/18)
High estimate annualized 12 mo. RR = 2.03 = 2.88 ^ (12/18)
Where else can you be guaranteed an annualized rate of return of 70% on the average, within an uncertainty interval ranging from 34% to 103% annualized return?
Anyone hear from Globe Trade yet?
Hoping his place on Long Island wasn't trashed by the storm.
Sold Jan. '12 because acquisition taking so long I thought that sentiment was going to be flushed down the toilet (which it did).
I always thought LPH was a "real" company - company in business 17 years and CEO has been with the company for 17 years. Located in Shanxi where they have a nice mixture of industrial customers and retail gasoline station customers...CEO is not a "suitcase CEO" bouncing around between multiple companies. LPH is and has been his life for 17 years.
However, I had varying views on how confident one should be about how accurate their numbers were back in 2011 when there were many China companies exposed by short sellers as mistating earnings and even lying about what they owned. That skepticism, for me at least, peaked over the summer of 2011. I didn't want to "invest" in any China stock, although a short term trade wasn't out of the question.
However, I changed my views on LPH when they did two things:
(1) July 2, 2012 tax filing reconciliation - the fact their auditor signed off on 3 years - July 2009 to March 31, 2012 - and the fact that they observed PRC computers to verify the data in the state tax office. That told me this company is 100 percent not lying about earnings.
(2) The fact that the $86 million escrow deposit on Huajie was actually used to close the deal on the $110 million acquisition from all cash, without shareholder dilution.
The very day they announced closing would occur by end of September is when I bought back.
And I can sleep easily at night holding LPH because:
(1) SAIC/SAT tax filings reconciliation covered three continuous years - no hiding profits.
(2) The track record from 2009 to 2012 shows the acquisition of Gujiao increased EPS from $0.28 to $0.61, even though the company issued 14 million preferred shares for financing. And now the acquisition of Huajie will increase EPS from $0.61 to roughly $1. Of course I would prefer no warrant redemption financing (from the leftover 2009 stock warrants for Gujiao). However, given that all they need is $25 million for inventory, the fact that LPH "bought the house" for $110 million and just need small change to build inventory to maximize sales and arbitrage margins - which only amounts to 23 percent of the purchase price -- Well, there is no question in my mind that Huajie will turn out to be just as accretive to EPS for shareholders as Gujiao turned out to be. That will take several quarters to reach maximum quarterly EPS, so waiting isn't for day traders. That brings me to my other point -- day traders don't like where LPH stock sits at the moment - they would prefer catalysts TOMORROW AM not spread out over 5 quarters in the future. And in the absence of such imminent catalysts, day traders who like a particular stock but don't think price is low enough to make it a short term 99 percent probability trade - many of them will try to interject as much old negative noise onto the message boards in an attempt to manufacture negative sentiment. Now let's see YOU be truthful and own up to that, Ubetball. I told my truths, your turn.
The effects of warrant extensions are a general market phenomenon.
The other posts are a specific point in history BEFORE the SAIC/SAT tax filing reconciliation in the exact same year where many RTOs were exposed by shortsellers...
That is now history...those that have verified tax filings and survived without being targeted and brought down by shortsellers, and whom have not diluted shareholder value into oblivion are few and far between.
The vetting process timeline varies from one stock to the next, depending on what steps the company has taken.
Again, I stand behind what I said. Also, FWIW, there was a crescendo of sentiment in 2011 against all China stocks, and this type of herd mentality affected me just like it affected you, until such time as I began to see some stocks take the necessary steps to "separate the men from the boys", or the legitimate companies from the scams. Herd mentality is everywhere - both in stocks and in politics...off topic, but as an illustration - look at the percentage of congressmen and US citizens who now believe it was an incorrect decision to invade Iraq at the time we did, based on lack of justified evidence presented to link Iraq to 9/11, yet back in early 2003 everyone was all about being gung-ho and starting a "pre-emptive" war without good evidence and without even the support of the UN. Sorry to diverge - one can have any opinion on that matter - the whole point is that "herd mentality" can drive people to judge things quite differently than they would in the absence of widespread shouting of opinions by news media and the public.
"Current Events" are relevant to this board.
1) SAIC/SAT tax filings reconciliation to SEC: July '09 - Mar '12
2) Aug. '12 plus Sep. '12 volume oil sold up 18% YoY, net inc. 11%
3) 10K filed mid-Sep. '12, audited. TTM EPS w/o Huajie $0.61
4) Acquisition of Huajie Petroleum with all cash, no dilution: Sep '12
5) Operational startup - first Huajie deliveries: Oct. 10, '12
6) Nine customers signed contracts with Huajie: News Oct. 30, '12
7) Local officials in Fanshi who have publically voiced their support and appreciation for the new LPH facility in Fanshi
-----
NOT CURRENT EVENTS:
1) Ex-CFO's that have been gone for 2 1/2 years who used to be CFOs at other companies in China
2) CFO's father who passed away 4 years ago who was in a corporation now defunct with a less reputable small cap CEO before parting ways 10 years ago
3) Posts mentioning other unrelated stock investments allegedly owned by message board posters that didn't turn out well in years past
4) Links to 2 year old posts written by different I-Hub posters whose main agenda back then was to drive the price of LPH down before they buy back for another long-side trade....well documented
-----
I stand behind my opinion that non-current event posts of the variety (1) through (4) are an attempt to manipulate security prices and damage the reputation of LPH though no management fraud or negligence has ever been formally declared by SEC, by lawsuits against LPH, or even by any of the major short-selling spin writers.
As such, certain of said described posts may fall into the category of the I-Hub recycling bin, depending on the exact circumstances relative to I-Hub Terms of Service.
Inventory to be built on cash profits plus possible small bank loan, based on opportunities in banking system:
If the warrants do not get LPH enough cash for inventory build-up at Huajie, they have several options:
Grow slower, deplete Taiyuan and Gujiao inventories slightly and add to inventory at Huajie as cash rolls in from sales.
I am assuming the 1 month warrant extension only brings in about another 300,000 warrant redemptions - trivial effect on sharecount or cash flow.
China banks have recently been lending to private companies, as noted below:
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20120925000064&cid=1203&MainCatID=12
"Chinese banks increase lending to smaller businesses"
"Following repeated government calls and encouragement, more financial institutions in China have now turned to lending services for small and micro-enterprises. Banks of various sizes now recognize the growth potential in microfinance services and many have even set higher growth targets for this area of credit than increases in overall corporate loans."
"Squeezed by the general economic slowdown, most large and regional Chinese banks said uncovering and selecting more small and micro-enterprises worthy of credit are among their major business strategies this year, reported Shanghai's First Financial Daily."
Only 0.3M warrants redeemed, repeat to November expiry
The same pattern is likely to continue since the company extended expiration 30 days to account for market closing due to bad weather.
That will be 0.3 percent dilution x 2 if repeated, or six-tenths of one penny in the stock price adjusted valuation for LPH.
Growth summary (edited from prior post for minor corrections to EPS and dates of filings - better to be accurate!):
LPH previously executed a big expansion in 2009 from one facility to 2 facilities, which grew EPS from 0.28 in 2009 to 0.61 in 2011.
LPH is a longstanding entity - in business for 17 years, CEO has been with company for 17 years.
LPH has never over-diluted shareholders during previous expansions: Note the big picture of a HUGE EPS growth story - examining the use of capital and the extent of EPS growth associated with the expansion at that point in time:
Consider this big picture analysis of historical LPH EPS/sharecount:
Examine page 6 of this SEC filing from September 5 2008:
http://www.secfilings.com/searchresultswide.aspx?TabIndex=2&FilingID=6140629&companyid=80123&ppu=%252fdefault.aspx%253fformtypeid%253d%2526amp%253bindustryid%253d%2526amp%253bticker%253dLPH%2526amp%253bauth%253d1
Year…LPH Sharecount…Annual EPS
2003………69,000,000………0.03
2004………69,000,000………0.10
2005………69,000,000………0.12
2006………69,000,000………0.21
2007………69,000,000………0.17
And page F-2 of this SEC filing from September 13, 2009:
http://www.secfilings.com/searchresultswide.aspx?TabIndex=2&FilingID=6838154&companyid=80123&ppu=%252fdefault.aspx%253fticker%253dLPH%2526amp%253bauth%253d1
Year…….…LPH Sharecount….Annual EPS
2008……….75,739,000…………………..…….0.27
2009……….78,524,000…………………..…….0.28
And page F-5 of this SEC filing from September 13, 2011:
http://www.secfilings.com/searchresultswide.aspx?TabIndex=2&FilingID=7478332&companyid=80123&ppu=%252fdefault.aspx%253fformtypeid%253d%2526amp%253bindustryid%253d%2526amp%253bticker%253dLPH%2526amp%253bauth%253d1
EPS increased from $0.28 to $0.62 and sharecount change from Gujiao (startup Jan/2010 to full speed June 30, 2011):
Year………LPH Sharecount…Annual EPS
2010………95,262,000………………………0.43
2011………101,684,000……………………0.62
And page F-3 of this SEC filing from September 13, 2012:
http://www.secfilings.com/searchresultswide.aspx?TabIndex=2&FilingID=8821523&companyid=80123&ppu=%252fdefault.aspx%253fformtypeid%253d%2526amp%253bindustryid%253d%2526amp%253bticker%253dLPH%2526amp%253bauth%253d1
Year………LPH Sharecount…Annual EPS
2012………101,773,000………………………0.61
If warrant redemption used for Huajie startup, shares: 100.7M to 112.2M & EPS increases $0.61 to $0.96:
Projected $0.96 EPS = (current sharecount EPS estimate of $1.07 EPS) x (100.8)/(100.8 + 11.5)
Projection for FY 2014 (assuming worst case all of 11.5M warrants redeemed causing 11% dilution, which are used to build inventory at Huajie):
Year………Projected Sharecount…Annual EPS
2014………112,273,000………………………0.96
SUMMARY:
Shareholders saw a HUGE increase in EARNINGS PER SHARE between 2009 and 2012 (0.28 to 0.61), largely attributable to Gujiao second facility acquisition.
Exceptional future EPS growth will also be realized with LPH for those who buy now and hold through Huajie ramp-up (0.61 to 0.96)
PAY ATTENTION TO DATES OF PERFORMANCE or DATE OF POSTS from certain posters.
The link below is about 100 Percent out-of-date. The most recent period of performance in that post is 2011, still not current:
"For October 2010 through October 2011, RedChip agreed to pay RedChip Companies, Inc. a fee of $30,000 per month in cash for twelve (12) months of RedChip Visibility Program and investor relations services."
Accretive Expansion and Legitimacy
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=81002651
China Oct Official PMI to Confirm Recovery Trend
China's factory activity likely accelerated in October to its fastest pace in five months, according to a new Reuters poll that reveals a growing certainty of recovery taking hold in the world's second-biggest economy.
The poll of 14 economic analysts forecasts that China's official purchasing managers index (PMI) rebounded to 50.3 in October from 49.8 in September, a reading that suggests factory output is accelerating again after two months of slowing growth.
"I think the October PMI will help support our expectation for a better economic performance in the fourth quarter than in the third," said Wang Jin, a macro economic analyst at Guotai Junan Securities in Shanghai.
"Signs of a stabilizing external demand, faster infrastructure investment and a thawing property market all bolster a recovery in factory activity," he added.
The 50-point line demarcates expanding from contracting activity in PMI survey methodology.
In China's economy, where industrial output grew at a 9.2 percent annual pace in September, the rise above 50 suggests an acceleration of output that will help lift fourth-quarter GDP growth above the 7.4 percent annual rate achieved in the third quarter.
http://www.cnbc.com/id/49605003