Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Thanks v80alue. You are right. Below is from 10K:
"Coal Products
Coal Group’s main products are “powdered” coal and “lump” coal, representing approximately 60% and 40%, respectively, of Coal Group’s production volume.
· Lump Coal . We sell lump coal to local customers that resell to distributors or end-users for heating purposes.
· Powdered Coal . We sell powdered coal principally to distributors that resell the products to power stations for electricity and heat generation purposes."
Re: CHGY.OB, 2009 Average Coal Price ($37 USD), current coal price and gross margin - this should answer your questions
2009 average coal price (gate price) was $37 USD per ton. The production cost was $11.71 USD per ton. This gives 68.5% gross margin. Please remember that I am talking about gate price here. The gate price plus transportation cost, tax and others would give the final port price (around $60-65 USD average port price for 2009).
The current coal gate price is much higher than the average 2009 gate price as listed below:
Lump coal at $67 USD per ton, 60% of total coal production
Powder coal at $43 USD per ton, 40% of total coal production
So the average coal gate price of $57.4 USD per ton. Prodcution cost is about $12 USD per ton. This gives gross profit of 79% in Q1. Their final sea port price may be around $80-100 USD per ton after adding transportation cost, tax and other costs.
That is why I think that Q1 should be another great Q even if they will lose at least 2 weeks' prodcution time for Chinese New Year.
Q2 should be also a great Q because of higher production volume than Q1 and still high gate price.
No, I followed it long before. I droped it from my watch list. I may take a look at it again.
Hi tika1
The insoection of PFGY facility is supposed to occur this week. After that they will get US certificate.
PFGY had huge backlog of 50 MW a few months' ago. Their backlog has increased to 60-70 MW from what I checked with them recently. They may do $80 - $100 million USD revenue this year. This is huge for a $6 million market cap. stock. The problem is their gross margin and net margin, which are very low. I am now expecting gross margin of 10-12%, which is below the industry average of 15-20%. It is hard to make money at such a low gross margin. If they can increase gross margin to 15%, PFGY will be a huge winner, a 10 bagger. 3-5% gross margin will make such a big difference.
They are cash flow positive in the last 2 Qs and they build up cash reserve. No danger to go out of business.
Huge grow in revenue going forward based on backlog number. But gross margin is the key here.
Summary report of visiting CHGY coal mine and power/heat group. Please see the link below:
http://www.investorvillage.com/smbd.asp?mb=14575&mn=1725&pt=msg&mid=8661783
Re: CHGY. One CHGY shareholder visiting CHGY coal mine and power/heat group last week. Please find the link below for his field trip report:
http://www.investorvillage.com/smbd.asp?mb=14575&mn=1725&pt=msg&mid=8661783
Hi rlwinvestor, Yes, I had a huge long term position in CHGY. There are several major shareholders on IV board. Not sure whether they had sold their position or not. It was tough when CHGY was trading side way for 6 -7 months when they had good profit on CHGY. I hold mine and thought that it would need some time for CHGY deliver good numbers after mine opening.
Hi bunky. I am not sure. CHGY used to sell a portion of their coal as coking coal. But now, they sell most of their coal as thermal coal. Their coal is a low sulfur, low ash and chemical emissions with high thermal property of 6,800 - 7,000 Kcal.
Hi Bob, those are very good prices. Great bought.
Thanks Bob. It has been 1 year and half. Enjoy the posts and competition on your board.
Hi valuemind, Congratualtion! I read and follow your posts as well as those on this great board from other very knowledegable posters.
As far as I know, they are in the process to hire a IR firm. They may announce the news of IR firm in 2 weeks.
Hi abh3vt, Re: CHGY. Of all the short term debt, approximately $10 million USD was from shareholder loan, which is interest free. CEO had put several million USD of his own money into it interest free. In the next few quarters, they will likely bring in $5-6 million USD per Q free cash flow. I don't think that they need to raise capital to serve the debt with such powerful free cash flow since the major capital spending on coal mine had been completed. One of IV posters visited CHGY coal mine last week and had a chat with CEO when they had luch together. CEO plans to move CHGY to AMEX and Nasdaq in August/September this year. He plans to acquire other coal mines by the year end or the next year. If so, they do need to do equity financing for acquisition purpose.
Re: CHGY Q4/09 Breakdown:
Q4/09 Earning Report:
Total Sale: $21.88 million USD
Cost of Good Sold: $11.93 million USD
Gross Margin: $9.95 million USD
SG & A Cost: $2.28 million USD
Operating Income: $7.67 million USD
Tax and others: $1.08 million USD
Net Income $6.59 million USD
Earning per share: 14.64 cents per share using 45 million total share count.
Coal Price has increased significantly from Q4/09 to Q1/10
Based on other Chinese public companies at the same location, net margin has increase from about 100 RMB per ton of coal($15 US per ton) to net profit of 200 RMB per ton of coal ($30 USD per ton) in Q1. Currently, it is at 200 RMB net profit per ton of coal. Earning should be sustainable going forward. Q4 does enjoy some value added tax rebate. But higher coal price should make Q1 and Q2 earning similiar to Q4/09. I think that 45-50 cents of earning per share is very likely for this year.
Re: CHGY. Coal Price has increased significantly from Q4/09 to Q1/10
Based on other Chinese public companies at the same location, net margin has increase from about 100 RMB per ton of coal($15 US per ton) to net profit of 200 RMB per ton of coal ($30 USD per ton) in Q1. Currently, it is at 200 RMB net profit per ton of coal. Earning should be sustainable going forward. Q4 does enjoy some value added tax rebate. But higher coal price should make Q1 and Q2 earning similiar to Q4/09. I think that 45-50 cents of earning per share is very likely for this year.
Re:CHGY, 68.5% gross margin for their coal production. They will do 0.8 million tons of coal production annualy. It is cash machine.
"Coal Group
Sales for Coal Group were $31,966,702 in 2009 compared to $ 12,875,569 in 2008. The $19,091,133 or 164% increase was as a result of a sales volume increase resulting from an increase in both coal production and coal trading.. The LaiYeGou mine became fully operational following the completion of an expansion and improvement program which included the installation of more efficient "longwall" mining equipment. Coal Group does not expect to encounter further interruptions in its business operations.
The following is an analysis of the financial results of Coal Group for the years ended November 30, 2009 and November 30, 2008.
Coal Trading 2009 % Total Sales 2008 % Total Sales
Sales $ 15,096,726 36 $ 4,280,673 22
Cost of sales $ 13,931,995 33 $ 4,173,304 21
Gross Profit $ 1,164,731 3 $ 107,369 1
Coal Production 2009 % Total Sales 2008 % Total Sales
Sales $ 16,869,976 41 $ 8,594,896 43
Cost of sales $ 5,309,773 13 $ 1,702,674 9
Gross Profit $ 11,560,204 28 $ 6,892,222 34
CHGY just posted 14.6 cents of earning per share for Q4 and 11.4 cents per share for 2009. Q4 is the 1st ever Q for full mine operation. CHGY should do at least 40-50 cents this year. This is forward PE=2 stock with powerful cash flow. Balance sheet should fixed by the year end. This is a easy 5 bagger stock.
http://www.thesubway.com/companydata.asp
CHGY just posted strong Q, earning of 14.6 cents per share for Q4 and 11.4 cents per share for 2009. Q4 is their 1st Q for full mine operation. I estimate that they will do 40-50 cents per share of earning this year. This is forward PE=2 stock. CHGY should bring in at least $20 million free cash flow this year. The balance sheet should be fixed by the year end. This is a 4-5 bagger in 9 months. My table pounding on CHGY.
CEO and CFO e-mail address:
Jack Li : jack.li@Perfectenergy.com.cnEdward Zhuang : edward@perfectenergy.com.cn
You may contact PFGY CFO at his office number:
0118621-5488-0958 Ext. 230. He speaks English.
Northern
Breakdown Numbers in 10K and Q4
Revenue for Q4 was $11.8 m USD
Gross profit was $1.555 m USD
Gross margin was 13.2%.
The lower gross profit number and gross margin were partially caused by a much higher no-cash item of $0.68 m USD depreciation. The depreciation in Q4 was higher than the combined depreciation in Q1 (0.11 m), Q2 (0.10 m) and Q3 (0.42 m). This took at least 2% off their gross margin.
Higher S G & A cost was partially caused by no-cash item of employee stock option of $0.41 m, which affects earning, but not the cash flow.
The cash flow from operation improved and the balance sheet improved including higher book value of $11.29 m USD as compared with $11.18 m USD in Q3. Cash balance was increased to $3.58 m USD in Q4
Clearly, the company is turning around from cash flow point of view. But earning numbers were affected by no-cash items.
No write-off in Q4 as expected.
The market was over-reacted to the 10K report.
I actually bought over 200K shares at 0.34 - 0.39 in the last 3 days. The big mistake in my last 4 years trading and investing.
Calm down. I actually bought in the last 3 days including 50K shares today at 0.34 and 0.35.
What went wrong:
SG & A cost was about $1.85 million USD, which was much higher than their standard cost of $1.1 - 1.3 million USD. Gross margin is also lower than my estimation of $2 million US.
10K just out. Revenue 11.9 million for Q4 and another loss Q. Cash position improved to about $3.5 million USD. Revenue at low end of my estimation of 12-14 millions. Earning falls short of my expectation. I am disappointed although the company contiues turning around.
No, I don't have a US phone number. I usually call their Chinese office phone numbers in Shanghai.
10K wil be out tomorrow (January 29). Called the company last night.
Thanks everyone. We all post and share infomration on these boards, so everyone can benefit from the team work.
Sunday evening in North America was Monday morning in China. If you can frame your questions carefully, you could get the information. For example, you asked them that from their latest presentation the end of last year that they had 50MW backlog, could they do 50 MW production or less/more due to the latest development in the industry? From their presentation, they were targetting to get US certification in January. You can ask the progress in that area, and etc. They will never give you the extract number. Another one is write-off. They had write-off in Q3. You can ask them whether they are going to have write-off in Q4 or going forward or how is collection, etc.
Another possibility is that PFGY may be acquired by another big solar company. I asked them whether this possibilty exists. I was told that it is actually under discussion together with other possibilities such as:
(1) Form joint venture (JV) to expand prodcution capacity further
(2) PFGY to be acquired by another big solar company.
If PFGY to be acquired by another solar company, my specualtion is that JASO could be a possible one since both PFGY and JASO are in the same location. This is just a specualtion at this stage.
60 - 80 cents after 10K including Q4 report the end of January looks possible. It looks like Q4 should be good Q since no write-off. I think that the odds is high for $2 share price by the year end. Time will tell. But I like my bet and odds here.
No write-off in Q4 for PFGY
Just Called PFGY Management.
10K will be out before the end of January, 2010.
They think that they can do 60 MW in 2010, that is about $100 - $120 million USD revenue at the current price of $1.8 - 2.0 million USD per MW.
I asked about the potential German subsidy cut. I was told that effect on PFGY is very small and they are getting orders from other parts of Europe. 60 MW prodcution should not be a problem this year.
They will get US certification in one to 2 months. They expect to get orders soon after that.
Nothern
This onw shows projeted growth of 4-5 GW in 2009 to 12 GW in 2013
http://www.thestreet.com/story/10651826/3/solar-tariffs-outlook-for-2010.html
Hi tika,
They are no longer with RedChip. But they may use RedChip or another IR company again the 2nd half of this year. CEO and CFO talked about to move PFGY to Nasdaq the 2nd half of this year.
The solar indutry is expected to return to fast growth trend from 6 GW installation in 2009 to 20-21 GW installation worldwide in 2013 althouth industry is expecting a upcoming German susidy cut.
Northern
Last year 10K was filed on January 26
I will call the company tomorrow evening to confirm the 10K filing date. The deadline is the end of January. I was told by CFO that they would file 10K on January 15 previously.
PFGY DD Report
Ticker Symbol: PFGY.OB
Current Stock Price: $0.37
12 month Price Target: $2.0
Share Outstanding: 29.6 million
Float: 13.14 million
Insider Ownership: 50.5%
Market Cap: $11.00 million
Book Value:$11.18 million
Fiscal Year End: October 31
1. Company Overview
PFGY was founded in July 2005 in Shanghai, China and listed on OTCBB in August 2007. It was targeted to move to a big board listing (Nasdaq) in the 2nd half of this year.
PFGY was a Chinese leading designer, developer and manufacturer of crystalline silicon solar cells, crystalline silicon solar modules, and customerizable photovoltaic (PV) systems. It has 45 MW solar cell production line and 60 MW solar module lamination line in state of the art 67,000 sq. ft. facility. It raised $18.4 million USD (about $2.7 USD per share using the current share outstanding) in equity capital from international investors in August 2007.
2. Investment Highlight
PFGY has supplier agreements covering most of the expected 2010 production. It has well-established sales channel and distribution network in Europe and has achieved 18 MW delivery in European market. It has estimated order backlog of 50 MW in 2010. The current price is about $1.8 - $2.0 million USD per MW. So that is potential revenue of $90 - 100 million USD revenue in 2010.
PFGY has proven quality of products by existing customers in European countries. The products are international standards certified (IEC61215, TUV Safe Class II). Preparation for US market entering is under-going and UL1703 certification is to be finalized and targeted to complete in January 2010.
PFGY has proprietary capital equipment to drive conversion efficiency rates over 17.5%. It has new technology (MCZ cells) to deliver approximately 18% conversion efficiency. It is currently developing next generation Flow-Zone silicon cells with REC to achieve about 21% conversion efficiency.
3. Catalyst and Capacity/Prodcution Output and Estimation
Worldwide solar installations are expected to increase about 30 -60% annually in the next 3 years, benefiting from the drive for low carbon emission and alternative energy from various countries. Solar module price is expected to be stable or only decline slowly starting from the 1st quarter 2010. The crystalline silicon price is expected to decline further, which will benefit the companies such PFGY in the business of solar cells and modules since the product price remains stable or decline less than the decrease in the raw material price. Thus, gross margin may improve.
PFGY production capacity and output as well as the production estimation in 2010 based on the current backlog are listed below:
2007: 6 MW production and 50 MW capacity
2008: 25 MW production and 60 MW capacity
2009: 30 MW production and 60 MW capacity
2010: 50 MW production and 100 MW capacity (estimated based on the current backlog).
4. Revenue and Earning Estimation in 2010
50 MW production at $1.8 million USD per MW equals to $90 million USD revenue. I will use $80 million USD revenue for calculation assuming the price of solar modules will continue declining.
15% gross margin at $80 million USD revenue will give $12 million USD gross margin.
If I assume SG & A cost around $5 million USD based on the previous results, I have $7 million USD operating income.
At 12% tax rate (PFGY enjoys lower tax rate than the standard 25% tax rate because of high tech. company), the net income may be around $6.16 million USD or 21 cents per share using the current share outstanding of 29.6 million. So PFGY is currently traded at book value and potential forward P/E less than 2.
Therefore, my share price target is $2 at the end of this year with P/E =10.
5. Risk
Solar business is very volatile with big swing in the price of raw material and finished products. PFGY is a small company handing a big backlog, which leads to execution and production risk.
len/SSKILLZ1,
I had submitted my 6 picks. Is it possible that I can still make some minor adjustment before the Friday's closing price this week? I am thinking to replace one of the picks with new one.
Thanks.
Northern
researcher59, Many thanks. You don't need to do that. You have set the example we would need to follow.