Further to Vikings post:
Indeed SIAF's diversified products offer a safer route to growth than one product line. But the growth of 17 profit centers vs one or two is not the primary reason SIAF targets geometric growth: 34x revenue growth in 3 years, as Viking says. More so, it is their business models which are very scalable.
The fish business had one farm in 2010, and will have 4 in 2011, possibly already there. So fish sales in 2012 will be MUCH larger in 2012 over 2011 AUTOMATICALLY. If 6 more farms are added in 2012, then 2013 revenues from fish sales will be on the order of 11 x 2011 (they were 0 in 2010), because there will be 11 maturely operating farms vs. 1. Same idea for cattle houses, where there will be 30 in early 2012 vs 8 in 2010, and 25 in 2012 vs 0 for sheep.
Of course, they must execute, and of course, there are challenges there. But if they fall way short of $350M 2013 revenues, say 50% short, long term holders will still make a lot of money from here.
Let's compare to NEP. NEP must develop a new oil field, and is still dependent on the price of oil. For each new successful well drilled, it will add incrementally to revenue. But it cannot add 2x wells per year, no matter what.
SIAF's businesses and plans have further distinct and major advantages over most every other company:
1) Intuitively, organic food in China is a great business to be in. Recessions may hurt demand for most all products, but probably not organic food, especially in China.
2) The Chinese government promotes agriculture businesses, for obvious reasons; therefore:
a) capital expenditures are subsidized by grants
b) LUR are collateral for low interest loans, and most importantly,
c) SIAF is exempt from income tax!
3) SIAF is expanding both horizontally -- varied new products such as eel, prawns, asparagus, and sheep -- and vertically -- from fertilizer through wholesale of food stuff, and next year through distribution and retail franchises.
4) Clearly, there are cost advantages controlling the literal food chain from inception through consumption
5) There are also symbiotic relations for the retail franchisees who have guaranteed supply, and the wholesale JV partners, who have guaranteed customers.
Concurrent with business growth, SIAF plans a maturing and credible investor marketplace, with the following stated objectives, on top of paying 12% of income in a dividend:
1) Form-10 approval
2) More robust IR and web site
3) NASDAQ listing
4) Possible dual listing in Sweden
5) 2013 spin out of subsidiary(ies) to an Asian exchange
I just don't know of any company with as clearly defined multi-year road map of huge, yet believable growth.
We'll get regular progress reports in the form of quarterly earnings, and milestone press releases, more timely after the Form-10 approval.
And all this potential is offered at 1/2 of current net asset value, and less than 1 x 2012 targeted earnings.
GLTA
