Sino Agro Food Inc (fka SIAF)

[finvestor]

VJ: Reading between the PR Lines

Here is an update of the progress:

Qinghai Sanjiang A Power Agriculture Co., Ltd.

The Company has met with global Tier-1 investment banks in Hong Kong in order to find a suitable advisor regarding the planned listing or merger and acquisition activity of the Company's integrated cattle operations in Xining, "SJAP." Interest has been strong. To me this says the spinoff will be listed on the China friendly and more completely valued Hong Kong Exchange The Company concludes that peer group multiples for similar companies listed on the Hong Kong stock exchange is very encouraging. This strengthens the company's view that structural changes can unlock great shareholder value. As part of this process, the company is also in discussion with a top-4 CPA firm to become auditor of SJAP. To me this says we are stating another bigger business ... mega-abattoir

Due diligence reports made as preparation for potential new listing
To me this says we are getting a new listing ... what everybody has been asking for...you all know that they can't say more than that now so just take it for confirmation that they are working on it and it will get done and probably fairly soon

For some time the Company has been evaluating a new, more appropriate listing of the SIAF shares. As a preparation, an extensive legal due diligence ("DD") report has been made by Delphi on the group. Including law firms in China, a total of four law firms have assisted Delphi. With regards to SJAP and as part of the plans for this business unit mentioned above, a separate legal DD has been made by King & Wood Mallison. Also, Deloitte has conducted a financial DD for SJAP. The Company is contractually from making any these three DD reports available to the public. To me this says we are now courting the institutional investors that will be our target under the new share price and listing However, the Company can report that the three DD reports are all satisfactory with some minor remarks on SJAP that are currently being amended. However, the Company is able to release the underlying filings made to the Chinese "State Administration for Industry & Commerce of the People's Republic of China " ("SAIC"). These have been important parts of the material used for the three DD reports. As of today, the SAIC filings are accessible on the Company's web site. I can't find them on the web site ... the links are not helpful to me ... I will email Peter to get clarification

Stockholm Office

The staffing of the Stockholm office is on-going, and the Company is currently interviewing candidates that it believes would add significant experience and know-how to the group.
To me it sure looks like FN but could it be a longer play for NAZ/OMX?? It certainly is a play for the institutional investors they are already courting


Dividend

Being a producer of organic food in China for the Chinese population, demand for the company's products is soaring. The company has consequently invested heavily in production capacity across all its business lines over the past years resulting in negative cash flow, despite significant reported profits. However, as shown in the financial reports, the underlying cash flow generation is also improving at a steady pace. Together, the Company and ECAB have analyzed the forward cash flows, and decided to start paying an annual cash dividend based on the net profit to SIAF Inc. and subsidiaries, beginning with the dividend based on 2015's full year report, to be paid in 2016. The exact dividend policy will be announced during 2015.
This corroborates the transition to positive cash flow in 2015 ... even with all the investments in 2015 and with paying out the 2012 F-Share commitment they will still be able to generate cash flow for a 2016 dividend ... that is really good news to me ... it is also another move to get the institutions into the action ... NITE won't be able to play games with the stock then...more good news.

The preferred F series shares (dividend) of $3.40 (totalling $3,146,063) will be paid in full on May 30, 2015. Payments will also include 10% retroactive interest. This looks like a straight 10% total interest and not annualized

Commented Fredrik Danielsson, Managing Partner of Euro China Capital AB: "Since the strategy meeting in September, ECAB has continued to work on a broad range of improvements on the areas referred to in earlier announcements. Amongst other things, I have made two week-long trips to mainland China and Hong Kong with the purpose of further updating myself on SIAF's operational progress, and to meet investment banks and other financial advisors. To conclude, I feel more confident than ever about the Company. I expect that the work initiated after the convertible note was announced in September will gradually start to generate significant benefits during the first half of 2015."

To me this says our share price can be expected to appreciate quite appreciably in the first half of 2015 ... I appreciate that ... seems this board is very impatient but they are doing what they said they would do in a step by step manner. Announcing dividends now for 2016 doesn't take any cash now. We need that to maintain our growth rate. Announcing the dividend policy will be good news when it comes and that won't take cash either. So save it for later. It will be another good news event which will, no doubt, be fodder for complaints around here.The cash flow will come but is not here at the moment so any question of buybacks now is just not reasonable .. that takes cash now and we don't have cash now...we need to keep up the pace of growth. Get a grip. They are doing the right things considering the situation If buybacks become the right thing we'll see them but not likely until late 2016 or not then IMO. So who was it grousing about there being no news here??
Fin