China Growth Stocks

[Brennus]

YUII: basic math on 2010 numbers

150MM broilers @ RMB2.85 per, that works out to revenue from broilers in 2010 of about 62.8MM USD. Conservatively, they'll generated 1MM from the sale of retired breeders. And maybe another 500k from the sale of eggs.

At 25% net margin (YUII have recently done much better than that) that works out to 16MM net income. Which is almost exactly a buck per fully diluted share.

So YUII is selling at less than 6x forward earnings.

What do you get for that? First of all, almost zero a/r. You know what YUII DSO is? NINE AND ONE HALF MINUTES!! Their entire cash conversion cycle is a little more than three days. So, like Walmart, they are making it up on volume.

Meanwhile, net margin is 28%. So not only do they make it up on volume, but they're turning their stock at fat margins. Without extending credit to customers. Enviable.

What about cash flow? Fuhgeddaboudit! 80 cents per share operating cash flow in the first 9 months of 2009. Pretty good.

I've been watching YUII for a while & thought it would get away from me after reading the earnings release. Seems like Mr. Market has worked himself into a lather to sell YUII, though. So I'll wait him out and pick up some shares at bargain basement prices. Thankyou Mr. Market, you psychotic basatard!