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Latest Earnings Out
I'm a big fan of HQSM and a true long, but the problem is dilution. In my opinion, the stock price will languish below the expectations of many investors until the company makes a real, concrete demonstration that they will no longer print more shares to meet every obligation.
The company has made statements indicating that they understand the problem. The private placement loan is convertable, meaning that the company could elect to repay part in cash rather than through the issuance of more shares. Likewise, the ALPS loan places much of the obligation for repayment on the founders themselves. Still, these are just words. Until HQSM pulls the trigger on an "ALPS-like loan" or in some other way shows investors that they are serious about
ending dilutive practices, the share price is likely to remain low relative to its earnings.
Just my opinion.
Dan
HQSM Audio Interview:
http://www.vcall.com/CustomEvent/NA015893/index.asp?id=99742
Audio Interview With Norbert Sporns:
http://www.vcall.com/CustomEvent/NA015893/index.asp?id=99742
Here's an interesting article dated today (9/1).
http://www.intrafish.no/global/article92597.ece
It's title is "Disease strikes Costa Rican Tilapia".
Says fish from Costa Rica have become contaminated and have a disease called SRS.
It goes on to say that Costa Rica is the 3rd largest tilapia fillet exporter to the US.
Today’s announcement of receiving loan guarantees with collateral put up by the founders seems to address your concerns. I’d be interested in your response to this development.
Thanks,
Dan
Found on the China Stock Blog:
http://www.chinastockblog.com/2005/05/what_impact_wil.html
Thursday, May 05, 2005
What impact will a Chinese currency re-valuation have on your business?
CEO Norbert Sporns of China-based, tilapia fish exporter, HQ Sustainable Maritime Industries (ticker: HQSM.ob) has this to say:
....A revaluation of Chinese currency is not likely to be sudden but a float against a basket of currencies instead of only USD and only on a gradual basis. We are well positioned for such corrections since profits are a reflection of product differentiation unlike our thin margined commodity competitors. Should the currency appreciate they will be wiped out and we will continue for a time at lower margins. Prices should increase since China accounts for 70% of the world's aquaculture. We would have a great position to buy out these former competitors, upgrade their facilities and produce to our differentiated model.
Yes, also can't get it to play.
Hey Jim,
You are certainly right about Fresh vs Frozen. Nonetheless if you are interested in trying the HQSM product, I have found that Pick and Save sells the frozen tilapia branded as "Sea Best", a brand owned by Beaver Street Fisheries.
Dan
HERE's a copy of the article if you can't get it from the link:
Oil platforms considered for tapping into fish farms in the Gulf
Advocates say mariculture would aid seafood industry
Associated Press
Originally published April 3, 2005
NEW ORLEANS - Thousands of oil and natural gas platforms in the Gulf of Mexico could be converted into deep-sea fish farms raising red snapper, mahi mahi, yellow fin tuna and flounder, under a plan backed by the Bush administration.
For years, marine biologists and oil companies have experimented using the giant platforms as bases for mariculture, but commercial use of the platforms as fish farms never got off the ground because of the federal government's reluctance to open up the oceans to farming.
Yet in December, President Bush proposed making it easier to launch fish farms off the nation's coasts. That could be done by resolving a "confounding array of regulatory and legal obstacles," the White House said.
Fish farming in the rough-and-tumble ocean, done by enclosing thousands of fish in submerged pens serviced by scuba divers, is limited commercially to waters within state jurisdiction, where permits have tended to be easier to get. Moi is grown in Hawaii, and cobia is farmed near Puerto Rico. Salmon farming is common, but it is done mostly in the calm waters of fjords and bays.
But, fish farmers say, the future is rosy and fast-approaching.
"In Asia, they're starting to creep off into the open waters; there's a lot of talk of doing it in Ireland. In the Mediterranean, they are now looking at moving out into open waters and experimenting with new cages," said Richard Langan, who heads the University of New Hampshire's Open Ocean Aquaculture program. He is experimenting with a variety of species - cod, Atlantic halibut, haddock, summer flounder and mussels.
With seafood now accounting for about $7 billion in the nation's foreign trade deficit, advocates of deep-sea farming say mariculture would bolster American seafood production and provide much-needed employment to coastal communities harmed by the eclipse of traditional fishing.
"Aquaculture is an issue that is here, and now we're already in the middle of it and how is the U.S. going to play in the game?" said Michael Rubino, the National Oceanic and Atmospheric Administration's aquaculture coordinator. "It's already being done in a big way in Korea, Taiwan and China. In the U.S., we'd like to start small, prove the concept and learn by doing."
The U.S. Commission on Ocean Policy recommended in its report last year to move forward with offshore aquaculture, but to hold it to high environmental standards. In his "Ocean Action Plan," Bush listed offshore farming legislation as a priority this year.
The new frontier is federal waters, Rubino said. "There's no good framework in terms of where this should be done, how it should be done, how the rules of the game should be applied."
The Gulf could be just the place where such a framework is developed.
Oil and gas platforms function as barn-like bases: They're big enough to store feed, their deck winches and cranes can lift and drop pens in and out of the water and, if needed, fish farmers can spend the night onboard.
And unlike many in Florida and California, the people along the coasts of Louisiana and Texas welcome the offshore industry. "The Gulf has tremendous potential," said Granvil Treece, an aquaculture specialist at the Texas Sea Grant. "There's been a logjam so far, and that's been because of permitting mostly."
There are an estimated 3,500 idle platforms in the Gulf - and each one of them could be a candidate for a new lease on life as a fish farm.
"The oil companies are looking for a way of leaving platforms in place and delaying the disassembly and expensive process of dismantling and removing a platform," said George Chamberlain, president of the St. Louis-based Global Aquaculture Alliance. It costs about $2 million to bring a platform ashore, Treece said, but another option, the "Rigs-to-Reefs" program converting a platform into an artificial reef, costs about $800,000. Chamberlain said the cost of production in fish farming continues to decline.
So far farming from the Gulf's platforms has only been experimental. In the late 1980s and early 1990s, for example, Occidental Petroleum Corp. teamed up with Texas Sea Grant scientists to grow redfish. Feeding the penned fish brought out some ingenious ideas and presented some problems.
Project officials learned computers could be used to open feed gates. With so many platforms far out in the Gulf a boat can't go out every day to unload fish feed as farmers do with salmon in the fjords of Scandinavia and North America.
"We dumped feed amounts in depending on how many fish were in the pens and what weight we wanted to grow them to," said Russell Miget, a Texas Sea Grant fisheries specialist who worked on the project.
Severe storms damaged some pens and fish got out. And Treece said studies show that the ocean-raised redfish worked out to cost a whopping $22 a pound, whereas redfish sold for $3.50 a pound at market. Also, just to run the platform's navigational lights and fight off corrosion cost about $50,000 a year, he said.
Miget remembered standing on a platform with an Occidental representative contemplating the future of fish farming. Responding to a question, Miget estimated that in ideal conditions, the platform could gross $6 million a year.
"The Occidental employee turned to me and said: 'We produce $6 million in gas every month off this platform,'" Miget said. "That put it in perspective."
While advocates believe it could work and be profitable, it's less sure whether any legislation Bush proposes will get the support of environmentalists.
Critics worry about turning the nation's oceans into the equivalent of ugly, dirty feedlots - but for fish instead of cattle.
"It's much like chickens or hogs or other confined feeding operations on land and putting them in the ocean," said Roger Rufe, president of The Ocean Conservancy. "There are considerable issues with that, pollution issues."
Not to worry, Treece said, who believes the Gulf's strong currents "should take care of that," he said. "The solution to pollution is dilution, and that's what you got out here - lots of dilution."
"We've found environmental impacts to be relatively minor," Rubino said. "You don't want to crowd these together and stick them on top of coral reefs."
He added: "This is a big coastline. We're not needing a lot of space."
Critics also question whether the government should designate sections of the ocean for farming and, in effect, privatize a public resource.
Another concern: Hatchery-raised fish could be put out in open-water farms, escape into the wild and corrupt wild populations' genetic pools.
Alaskan fishermen, for example, warn that their wild stocks are being infiltrated by Atlantic salmon bred in fish farms.
"The potential for Atlantic salmon to compete with our natural wild salmon or to spread diseases is an ongoing concern and part of the reason the United Fishermen of Alaska opposes finfish farming," said that group's executive director, Mark Vinsel
Interesting Article from the Baltimore Sun talks about Fish Farming in the US
http://www.baltimoresun.com/news/nationworld/bal-te.gulf03apr03,1,2857370.story?coll=bal-nationworld...
Give a man a fish, feed him for a day. Invest in a HQSM, ...
Dan
Thanks Jim,
Nice to see a neighbor on-line. I know Sendick's and Grash -- I'll give Penzi's a try next time I'm in Tosa.
Dan
Hi Rainman,
I tried your recipe last night with friends. It was pretty good. The tilapia I found in the local (Near Milwaukee, WI) store was individually quick frozen filletes from China and packaged by Mazzetta Company in Highland Park, IL. No way to tell if they were from HQSM. Does anyone know some brand names used in the US?
Dan
Yes, It's getting intersting!! I read somewhere on the web (and I wish I could remember the site, but can't), that the quarterly report is expected Thursday (3/24) after the trading session.
Dan
I agree with aquafuture. At the price of HQSM a single market participant can affect the price significantly for very little cash. So over the past few days, while the price has changed, in reality not much money has left the company.
In my opinion the basic story hasn't changed. HQSM is under-valued and relatively unknown in a growing market of great potential. I think long-term it's going to be a real winner.
Keep the faith,
Dan
Like most of you, I'm on board for this one. I see it as dirt-cheap now and a stock that could be a long-term asset.
I think it's important to understand the risks - some are addressed in the Q/A doc of 2/16 on their website:
http://kbk.hainan.net/english/pre_roo/pre_roo1.asp
And I wish there was more independent research than the Suisse Finance paper -- HQ paid for it -- but even that is seems to be a good move. The company would benefit from a higher profile and the revamping of their website and the Suisse Finance paper are ways to get it.
I live in Wisconsin and plan to start scouting the local fish wholesale markets to see if I can find their products -- I think it would be a lot of fun to host a dinner party and eat some of what I'm investing in. Have any of you actually tried the product?
Dan