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abh3: Same as you, I do not like NPV and almost never use it as well, because of the un-predictability of future cash flows. But Yida's asset like GGL is different. Once the destination is fully developed, one can consider it a monopoly business. The cash flow from a site like GGl is quite stable and predictable. To use GGL as an example, it generate $ 4.9 million revenue in the Q1,2010. It will generate revenue of about at least $20 million for the whole year and free cash flow of $12 million (60% margin). The tourism industry is expected to grow at 13% (revenue)in China. Assume the revenue from GGL is grow at the industry rate, and to simplify, we discount the cash flow at the same as the growth rate (13%). In the next 20 years, GGL will generate total of $240 million free cash, which is about the market cap of Yida.
abh3; Do you have the names of some other clients of BPO?
NED: it did last year and announced new buy back plan recently. It has $3/share in cash and stock price at $4. It will make $35 cents this year.
infractions "may at times be the result of relatively innocent mistakes.
This might be true. As we have seen in several companies that need to restate reports. It is because they are not following the US accounting rules. The accountants may not be very familiar with US accounting rules. The restatements are usually material. Of course, there are cases of frauds discovered too. This is true for any type of companies.
It is not a surprise to me that companies have two books. The books filed to the government are for the purposes to pay less tax. I think that some US companies are doing this too. For example, the book to show the government has more aggressive method to depreciate assets. Correct me if I am wrong.
abh3vt,
Thanks for pointing out the hidden land value Yida recently acquired very cheaply. I think that you simply have made a point that Yida is extremely cheap from any angle you analyze it. It definitely provides another layer of margin of safety for its investors. For the land value, I would not like to value it at exact numbers. The land value fluctuates along with real estate market. However, I like it a lot in following two ways.
1. It demonstrates Yida's tremendous competitive advantage in tourism development and management business. Yida's great success at managing GGL site has convinced local governments that Yida is the right choice when picking a company to develop and manage tourism destinations. They are willing to give Yida very favorable contracts terms in order to attract Yida's business. For the local governments, their utmost concern is the eventual success of attracting tourists to the site to boost local economy. Because for any 1 dollar spent at the site, there is 5 dollar GDP boost for local economy. There is not many capable players in this business. Any competitors may be just interested in real estate development. ( They bought the site and build some villas and make some quick bucks.) Thus, even if these competitors are willing to pay double Yida's bid, the local government won't give the contract to them, because it is not the government purpose.
2. The land provides Yida's funding flexibilities for future projects. In one way, Yida can use the land as collateral to borrow money from bank. In another way, Yida can resell part of the land to other developers to build villas and use the fund to develop projects. Yida's CEO is a very disciplined business man. He will focus on tourism development and management. He is not interested in making a quick buck. When I talked to the CFO a while ago, he confirmed to me that Yida is not likely to go the second route. Yida will keep the land for future use.
Are you familiar the concept of intrinsic value (IV)? Basically, a company's intrinsic value is the sum of all future cash flows discounted to current value. By my estimation, the IV of GGL alone is worth about Yida's current market value. The investor gets all other parts for free. IN this case, I do not care too much the land values to 200 million or 600 million. When I see a bill lying on the ground, I will pick it up no matter it is a $20 or $100 bill. I like it free.
Thanks for sending the slides. I'd like to post some notes from reading the slides.
1. For the new parks, Ming dynasty entertainment world and Yang-sheng paradise, Yida will own the properties on these sites. There will be no expiration for the management of the sites. Revenue sources are more diversified.
2. Economic model of a tourism site is very attractive. After initial investment, the capital investment for the operating years is very limited. The NET Income margin is about 50% and Free cash flow margin is around 60% because of the depreciation.
3. The pay back for the initial investment is expected to be 4 years after opening.
4. The projected visitor to Yunding is 300000. I think the projection is off to the high side because of the delay of opening.
4. Yida has no AR problem, it counts the money everyday after the parks close. This is the one aspect of the business I like. A lot of Chinese companies have the AR problem. They report earnings, but can not see the money.
Overall, the growth of Yida for next 5 years is easy to be envisioned. For the near term, the organic growth of visitors to GGL and Tulou, and opening of Yunding will provide growth for 2010 and 2011. The openning of Ming and Yang-sheng will drive the growth of 2012 and beyond. I am sure Yida will add more destinations to their collection.
China rising conference: I am waiting for Yida's presentation at the conference to be posted on conference website. They stated that it should be posted on May 19th. It is not there yet when I checked it. Can anybody who went to the conference share some notes?
Long-term prepayments consist of the following:
March 31,
2010
Deposit for potential acquisitions
12,308,130 6,806,880
Total
In its 10Q, there is 12 million acquisition deposit. This item sound strange to me. It seems that they do have an acquisition target yet. If there is not a target, why they need deposit for it. Never heard of it. Can somebody here explain this to me? Appreciated.
Seems negative on Chinese small caps:
The OTCBB has suffered reputational
damage, especially amongst Chinese
companies. The lack of trading in shares
of newly reverse merged companies has
not gone unnoticed and many issuers
from overseas are now looking for ways
to skip the OTC world altogether.
At the same time, the OTCBB tested
investors. A number of companies during
the past few years, including some from
China, have been outright frauds. Innovations
implemented by Pink OTC might
raise the bar a bit for both sides and make
the OTC proposition fairly attractive rather
than a compromise or a gamble.
The tourism business is very seasonal. Just think about Yellowstone. It is closed during winter. I will focus on YOY numbers for business like Yida's.
Translation of the news:
From March 20 to March 22, CEO Chen and Yida’s management once again visited the caverns in Cavern Villiage, Shapu in Shuanglin and Fairy Lady Lake. They discussed with the leaders of Xinyu. Mr. Chen decided to develop the caverns in Cavern Villiage based on the good investment environment, advantage of location and unique natural resources. He expressed the intention to develop a unique tourism destination centered on the caverns and cavern’s culture. The destination will be developed based on the unique geological feature of the location and the wealth of cultural meanings of caverns in Chinese culture. The destination will be focused on caverns, with other tourism products.
Yida and local government both established special team for further planning and collaborations.
I am not quite sure about how Yida will fund this project. But, Yida stated clearly that it will not need raising new capital for the Anhui and Jiangxi projects. The first development phase of those two projects will be funded by cash flow and cash at hand. It does stated that Yida will borrow from bank using the land as collateral. Whether it will use the fund borrowed from bank to develop other projects or the fund is limited to be used in those two projects is a question to ask.
Bottom line, if it need to raise capital again to acquire precious long term assets. I am OK with that. You do not want to let the opportunity (to acquire such great resources) to slip away.
Yida is in a explosive growth phase.
CNYD: A new tourism destination in the making. I expect a press release soon. In this news , It reported that Chen Minhua visited Xinyu city and decided to develop the tourism resource in the city. The city has several caverns. The tourism destination will focus on these caverns. Yida is using its dominant position to snap up unique natural resources that are not reproducible. These tourism natural resources are more valuable than real estates, and more valuable than a brand name like Coke. Can anybody make a cavern with a $1 billion? This intangible value of Yida is not easy to see for everybody.
http://www.jxxyly.gov.cn/web/index.php?module=information01&act=show&database=information&co_id=385
A new tourism destination in the making. I expect a press release soon. In this news , It reported that Chen Minhua visited Xinyu city and decided to develop the tourism resource in the city. The city has several caverns. The tourism destination will focus on these caverns. Yida is using its dominant position to snap up unique natural resources that are not reproducible. These tourism natural resources are more valuable than real estates, and more valuable than a brand name like Coke. Can anybody make a cavern with a $1 billion? This intangible value of Yida is not easy to see for everybody.
http://www.jxxyly.gov.cn/web/index.php?module=information01&act=show&database=information&co_id=385
Yida promotional video:
RINO, SKBI: The valuation of both companies looks cheap. However, both companies have changed their CFO recently. Usually, it (change CFO) is viewed negatively by investors. Especially for Chinese companies, investors do not have too much confidence in their accounting. Thus, this type of news are more negative to Chinese companies. This may be the reason why these stocks are cheap.
The frequency of changing CFOs for Chinese companies traded on US market have been much more frequent than the US companies. Anybody on this board have an explanation for this phenomenon? Is it a valid concern and a real risk concerning the accounting of these companies? If the numbers are not trustable, discussing how low the PE is meaningless. FUQI international is a recent example. If this type of restatement happens more often, the valuation of Chinese companies will be depressed and will not bode well for investors on this board. So far, this is my biggest concern about investing in Chinese stocks. I will appreciate the view of how to evaluate and manage this risk?
American made, Chinese owned....
http://money.cnn.com/2010/05/06/news/international/china_america.fortune/index.htm
Maybe, because of his Chinese accent. I could understand him very well. I think that he conveys the message pretty well. The company lays out plan to become the Disney of China. The company has two parks operating. One will be open in August. Two are under development. There are not too many capable players in this field. Yida has capital and experience in managing tourism destinations, demonstrated by their successfully promoting Great Golden Lake from an unknown park to the world stage. Now provincial governments all invite Yida to help them to develop tourism destinations. Now there are 10 projects coming to them for them to review and decide which ones to develop. As demonstrated by two recent awarded projects. They are coming very favorable terms to Yida.
CNYD:CNBC interview of CFO. He says that there are 10 projects in their pipeline. http://www.thestreet.com/_yahoo/video/10742405/china-yida-holding-china-watch.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1#82602795001
CNYD.
Yida recently released news about two brand new projects which will contribute to revenue and profits down the road. The market seems paid no attention at all. It is amazing that institutions has no interests in this fast growing enterprise.
No capital raising, no share dilution to develop two more parks! That makes me happy.
In their press release, they stated that they will use cash on hand and cash flow to biuld the Ming Dynasty Entertainment World and Yang-sheng (Nourishing Life) tourism projects, There will be no capital raising in the foreseeable future.
When these projects are completed and running, the earnings from these projects will accrue to current shareholders. The per share earning will jump.
I am comfortably holding my shares.
This is the google translation of the site. I copied the Aoxing entry on the top.
??????????? Olympic star oleanolic acid capsule of a number plate ? No ????H61022832??????????
Gantt a plate of liver hydrolyzate of compound tablets, capsules heart and brain, to deceive the sheep Lophanthus rugosus 37 patients were discontinued!
????? ??, ????????????????????????????????????, ???????????????????????? ??????? ! Food Business Network reported that the Food and Drug Administration of Shaanxi Province released on illegal advertising medicines notice of compulsory administrative measures taken, Gantt a plate of liver hydrolyzate of compound tablets, capsules heart and brain, sheep Lophanthus rugosus 37 patients were deceived sale!
( ????? ) ( Food Business Network )
?????????????????????????????????? Food and Drug Administration of Shaanxi Province on illegal advertising medicines notice of compulsory administrative measures taken
??????[2010]56? Food Drug Administration issued Shan City [2010] 56
??(?)?????????: Municipalities (regions) Food and Drug Administration:
??????????????,??????????,??«????????»?«???????????????????????????????»(??)?????,????????????????????“???”?7???????????,??????????? To further strengthen supervision pharmaceutical advertising, pharmaceutical advertising order, under the "Drug Advertising Review", "Shaanxi Province, on Printing and Distributing Food and Drug Administration suspended sales of pharmaceutical advertising on illegal Regulations" (draft), the relevant provisions of the provincial Board decided to publish the recent illegal drug advertisements serious "liver tablets" and seven species compulsory administrative measures taken to suspend the province-wide sales. ??(?)?????????????????????????,?????????,????????????,?????????????????????,??????????? Municipalities (regions) Food and Drug Administration should inform the area of pharmaceutical enterprises, to immediately stop selling the variety, and inspect the implementation of business, refused to implement the archive can be seized and its related drugs for testing, inspection promptly reported to the provincial bureau.
???????????????????? Ordered to suspend sales of the drugs are illegal drugs ads list
???? Drug Name ???????? Marked advertising approval number ???????????? Labeled drug approval number of production enterprises ?????? The fact that serious violations ?????????? Enterprises marked advertisement
????? Yang Lophanthus rugosus 37 ? No ???? Z20026983??????????? State Yaozhun Zi Z20026983 Jilin Pharmaceutical Co., Ltd. long source ??????????;??????????????;????,???????; Prescription drug release in the mass media; use of patient images as proof of product efficacy; exaggerate the efficacy of the use of absolute language; ?????????????????????????????????????????????????????????????? Yee pharmaceutical chain, chain Hanguang North delight, light Naruhito large pharmacies, drug exposed tower algae, algae exposed lijiacun Hall, Simon Hong Tai Tai pharmacies, supermarkets, Simon Thai Health Medicine, pharmacy, etc. Friendship Road, a long letter
??? Liver Tablets ? No ????Z20024027?????????? State Yaozhun Zi Z20024027 Zhangchunjingkai Pharmaceutical Co., Ltd. ??????????;??????????????;????,???????; Prescription drug release in the mass media; use of patient images as proof of product efficacy; exaggerate the efficacy of the use of absolute language; ???????????????(????)?????(???)?????????????????????????????????????????????????(???)? Yee Chinese Jiefang chain stores, pharmacies healthy (Northwest Third Street), and delight pharmacies (big bad city), China Resources Vanguard Supermarket drugs, Thai Health Chaoyangmenwai pharmacy, light industry Naruhito large pharmacy, supermarket lijiacun algae Lu Tong Medicine Kang Chung large pharmacies, long letter Dispensary (Friendship Road), etc.
???????????? Gantt a plate of liver hydrolyzate of compound films ? No ????Z42022800????????????? Green gold country Yaozhun Zi Z42022800 Hubei Pharmaceutical Co., Ltd. ??????????;??????????????;????,???????; Prescription drug release in the mass media; use of patient images as proof of product efficacy; exaggerate the efficacy of the use of absolute language; ????:???????? Promotion of pharmacy: South Street delight pharmacy Guangji
??????????? Olympic star oleanolic acid capsule of a number plate ? No ????H61022832?????????? State Yaozhun Zi H61022832 Aoxing Pharmaceutical Co., Ltd. Shaanxi ????????;??????????????;????,???????; Unauthorized tampering with content approval; use of patient images as proof of product efficacy; exaggerate the efficacy of the use of absolute language;
????? Traditional cream Qianshan ? No ???? Z20025596?????????? State Yaozhun Zi Z20025596 Beijing marble Pharmaceutical Co., Ltd. ????????;????,???????; Without the approval of false advertising; exaggerated effect of the use of absolute language; ????(????????) Double-Crane Pharmacy (Lianhu crossing West Avenue Branch)
????? Epilepsy pill Madness ? No ???? Z12020568???????????? State Yaozhun Zi Z12020568 New medicine pharmaceutical Tianjin lerentang ??????????;????,???????; Prescription drug release in the mass media; exaggerated effect of the use of absolute language; ????(?????)???????????? Delight Pharmacy (South wide economic Street store), hamlet of a sun, light Kanger pharmacy
????? Cardiovascular Capsule ? No ???? Z22025455??????????????? State Yaozhun Zi Z22025455 Tiantai Pharmaceutical Co., Ltd. Huinan ??????????;??????????????;????,???????; Prescription drug release in the mass media; use of patient images as proof of product efficacy; exaggerate the efficacy of the use of absolute language; ????(????)?????????????????????????????????????????????????????????????????? Delight pharmacies (big bad city store), to hamlet as one, large public health pharmacy, Xiaozhai a yang, lijiacun algae Lu Tong, Tumen delight, Simon Hong Tai, Simon Tai Sang, light Naruhito, light one, light Workers Grenada, liberating Luyi Kang, peace Luyi Kang, etc.
No. nothing come out.
All right. This is the Chinese link http://www.21food.cn/html/news/26/561194.htm. You can try to read or translate it.
Yea. I see it there. it seems that they have a problem with regulators on Aoxing.
The webpage is now removed and unreadable. The website is not an official government site. I can not rule out that someone is manipulating the stock price.
Basically, the site listed several drugs that are suspended by the regulators. For AOxing, the reason for suspension is that the benefit of the drug was over stated.
I read the original Chinese site. ( I can read Chinese) It is true.
CGPI.OB
The business seems promising and it is ready for a NASDAQ lifting. It is trading at a forward PE of 5X. However, in their recently S1 filling, all the 24 PIPE investor are selling ALL of their shares owned. This makes me wondering. Why don't they want to keep at least part of their shares if the business is growing and the valuation is cheap.
CGPI.OB
The business seems promising and it is ready for a NASDAQ lifting. It is trading at a forward PE of 5X. However, in their recently S1 filling, all the 24 PIPE investor are selling ALL of their shares owned. This makes me wondering. Why don't they want to keep at least part of their shares if the business is growing and the valuation is cheap.
SOHU is buy:
Sohu owns 66% of Canyou which worth 1.2B and it has cash of $560m
Total market cap is $1.95B.
The web advertising business is valued at less than $300m currently. Remember, advertising generated $250m revenue in 2009. How many times of revenue is Google traded? go figure!
PFGY. It is very cheap. Revenue jumped in the first quarter. It is traded at a fraction of book value and revenue. I picked up 20K shares this morning.
CCME:
If you read the 10K carefully, this statement is not true. The equity of Fenzhong is 100% owned by the two previous owners. CCME owns the economic interests through a serious of contracts.
I owns CCME. I am not bashing it, just want to discuss an issue of this stock.
I have read the board for a couple of weeks. It is a great board. I just joined the membership yesterday in order to be able to post message. So this is my first post. I want to discuss CCME, the consensus pick of this board.
The fundamental of this stock is very strong, great growing story. But the price is hold back by some mysterious force. Then what is this mysterious force? If somebody is shorting this stock, what the shot is seeing that make him so confident that he will make money?
After reading the 10K, my major concern is the business structure of CCME. I am thinking that this might be reason why short is shorting the stock. From its business description, CCME does not own Fenzhong and does not conduct any business of its own. After its contract with Fenzhong is over, nothing left for CCME shareholders.
Can anybody rebuff this argument? Forgive me if this question is already raised in this board.
Gene_finder
“The Company does not conduct any substantive operations of its own, but conducts it primary business operations through Fujian Fenzhong, a VIE of a wholly owned subsidiary, Fujian Across Express Information Technology Co, Ltd. (Across Express).” And “China MediaExpress Holdings, Inc. (CME), through contractual arrangements with Fujian Fenzhong Media Co., Ltd. (Fujian Fenzhong), operates the television advertising network on inter-city express buses in China.”