Replies to post #7054 on YaSheng Group (HERB)

[RealDutch]

This is interesting. It's not like a 30-year management right is standard in China. Which also explains why depreciation is so low (on the newly acquired land).

I copied this from SIAF, which had some land in different locations throughout China. It's the tenure that you should be looking at.

Definitely more support for my theory.

[Petrejus]

So this is a setup that would give us
- ~$1.50/share in dividend
- x number of shares in the new merged company Yasheng Group/Gansu Yasheng Industrial
- a listing on SSE (where the current p/e for the Shanghai SE 180 index is 13.97)
?

an acquisition by the Shanghai sister company

[snow]

RD "Now back to the plantations. WTF is going on? Hasn't anyone noticed that net assets are very high relative to revenues/earnings? IOW, Return On Equity is very low.

Quote:Intangible assets consist of 30 years use rights of Fruit vegetable franchise



Ginkgo or herbs is not fruit, is it? And I already checked this weeks ago - the Fruit plantations do have 30 years use rights, from 2010 until 2039.

The 5 plantations should be worth close to $70M today after depreciation. They booked $130M worth of land use rights as per June 2021. So this could consist of the $70M plantations (generating $200M in profits annually) plus the newly acquired ginkgo and herb plantations."

I did notice that there seems to be no relation between the high assets and the low revenues. What you account for is an interesting theory that I regard as more credible than the plantations being part of the coming Equity Art Corp. stock dividend. What I don't understand is why the profits the plantations generated during the two last years are not included in the profits of HERB made in this period.

[Petrejus]

A merger and thus a listing of HERB will display all the assets and give us a proper valuation. I hope they make it happen this time.

an acquisition by the Shanghai sister company