Conference call highlights:
The conference call and earnings were spectacular.
The company answered very good questions and the prospects for the company seem very prosperous. Its actually ridiculously undervalued at the current share price and its nice to see that management thinks the same.
Some of the highlights:
-Prices increased from 1300 to 1500, in 2009 to 2010 for specialty chemical products. The company stated prices were even higher in Q4, near 1620, and that Q1 was looking even better.
-There was a mention by the CFO that Q1 2011 earnings were much better than Q4 2010.
-Current capacities are roughly 95% for specialty chemicals and 20% for bio diesels. Although utilization rates are higher for specialty chemicals they have been shifting production to concentrate on higher margin products which should help boost earnings even more.
-the company is applying to have tax rate reduced from 25% to 15%.
-They are capitalizing on their own provinces demand to lower transaction costs such as shipping costs as well as benefit from buyers picking up products directly from the factory which has reduced costs drastically.
-the company anticipates to acquire a feedstock supplier with cash on hand and current cash flow which should boost margins by an additional 3-5% as well as add to earnings.
-the company seems to be leaving towards the AMEX and as per my question it appears they do not want to do a reverse split and they believe that the share price will appreciate above 2$ within the next year. In my opinion this portrays the confidence management has in their company and their belief that the share price is undervalued.
-In the future the company anticipates to expand through building another production plant with warrant money (when price reaches over $2 and after acquiring a feedstock supplier)
-The company anticipates growing shareholder value through issuing more PR's and updates; attending more conferences to increase visibility of the company in the public's eyes, increasing its earnings and reducing risk by securing a feedstock supplier as well as listing onto a major exchange.
-The Guidance of 0.36 does not take into account any acquisition, therefore in the event of an acquisition we can expect EPS to be higher.
