Replies to post #8323 on Sino Agro Food Inc (fka SIAF)

[viking86]

nice story, thanks for the DD. I thought in the US real estate as NTA is valued at cost (reflected in the bankrupcy value) and not at market value. So why did the KMart's SP rocket years after the acquisition? If NTA were valued at market, SIAF's price would be much higher now and there would be no reason for Lee to IPO subs on foreign markets to realize value.

[treit2002]

Lambert did a lot of things to increase K-Mart's value from bankruptcy levels. Primarily, he sold the valuable real estate, closing the worst performing stores. So, he converted unaccounted NTA and operating losses into cash, something Solomon is not going to do for a while.

OTOH, K-Mart was and is a pretty clunky, erratic operating concern. Solomon is building a very high gross profit margin machine of dramatically increasing size.

I think the share price is low for several reasons:

1) Perception of US listed Chinese companies
2) Pink sheet listing
3) Equity financing
4) Cash flow

Time will take care of all of these, with 2013 developments topping 2012's.

Toward a prosperous 2012, we are beginning to see more frequent pr and events, which figure to include:

1) OTCBB listing
2) Resolved and solid dividend pay out and policy
3) Independent directors, improved corporate governance, including Sarbanes-Oxley guided accounting, and other NASDAQ uplisting requirements
4) New downstream fish supply contracts
5) New fishery contracts
6) The first fishery realizing 500 ton and 1,000 ton capacity sales
7) The Prawn and eel fisheries coming into production
8) Thousands of head of cattle
9) HU producing yields 4x-5x current when green housed
10) Distribution and Retail producing revenues and starting up, respectively
11) Restaurant sales
12) Second fertilizer and feed stock operations producing increased sales
13) New grants, and hopefully, hopefully loans at more established subsidiaries
14) Increasingly defined road map to Asian exchange spin outs

As I understand it, profits in 2012 may reach $40M - $60M, all of which will be used to grow the various operations into larger profit generating machines, some of which will then be retained as cash in 2013. Sooner would be much better imo, even if sacrificing growth marginally in favor of the safety to avoid any more equity raises at depressed prices.

SIAF has come through with very high growth throughout its history. The share price is much more a function of multiple to earnings than earnings. I think it's safe to say that a p/e of 1 is start up, if not bankruptcy levels. The trip from a p/e of 1 to 10 or so is going to require all the above; the main milestone being significantly cash flow positive without eps dilution and hopefully minimal share count rise.

The holy grail is the spin outs.