Sino Agro Food Inc (fka SIAF)

[viking86]

By the time SIAF acquires a 75% stake, the JV partners already have 75% of their money back. But during that first year of operation (or two), 75% of the profits go to the JV partner because they own 75% at that stage

true. But in the first 2 years there is not much production anyway and by the time the project reaches 75-100% production capacity, the partner owns only 25% of it. A typical FF or PF project costs about 8-10m and has a capacity of 1,000-1,500 MT with a max annual rev of 20-30m and profit of max 8-10m. At 25% production however, the annual profit is only about 2-2.5m. Even if the partner gets 75% of it, he only gets about 1.5m back vs. a capital layout of 8-10m. So, the partner is desperate about getting some of his huge initial investment back. Let's face it: unless he is a billionaire, putting up 8-10m upfront is a huge investment for any investor. In many cases he has to take loans to come up with that money and needs to make payments. That's why he needs to sell all the shares he gets to make payments and recoup some of those millions back. As I said, after 4-5 years he gets all his money back and gets the annual profit for free. But until then he has to suffer. That explains the dumping of shares IMO.