I am sure missing as much as anybody here when it comes to a prediction. Esp. for so many moving parts at SIAF. But -for fun- here is my answer to the quiz:
wrong: a. b, c
correct: d (baby-prawn farm)!
Who would have thought that our baby prawn farm that's still under construction (Phase 2 to be completed by EOY) will IMO be the strongest rev. generator for SIAF this year, by far surpassing the other already operating farms. Even when Phase 1 was not officially completed until May 2012 (the contract was signed late last year on Nov 18, 2011), they already sold 2M prawn flies in Q1'12. Wow, that's fast. For a reason, Mgmt declared that rare accomplishment a "first milestone" in China. In contrast to most other projects that take at least a full year for construction and another 1/2 year to raise the fish or cattle to "marketable size". Like FF1 was started in early 2010 but didnot book the first sales of fish until late 2011.
Now to the projected 2012 rev numbers of each (most based on Mgmt target, some are my estimates):
a (FF #1): sales=13.5m per Mgmt, service=2m (not much more to be done, construction completed in Dec'10), total= 15.5m
b (CF#1): sales= max 13.5m (based on max 3000 heads sold at 4.5k per head, more likely 2000 heads sold), service= 8m (much construction sevice for mash station, fertilzer plant, at least 10 more cattle houses...), fertilizer/feedstock sales about=1m, TOTAL= 22.5m
c (1st prawn farm): construction to be completed by July'12, about 250MT prawn sales expected, so sales=6.25M, service= 8M, TOTAL= 14.25M
d:(baby prawn farm): sales= 10M, service= 21M (wow), TOTAL= 31M expected by Mgmt for 2012. That's over 20% of total 2012 company revenue guidance of 145M.
From 10K:
-sales: Management is targeting to generate upwards of US $10M in prawn flies sales revenue supplied by this farm in 2012. That makes sense as production target is 2.8Billion prawn flies in first year of op at an avg price of $40 per 10,000 count.
- service: The contract is expected to generate revenue up to $21M for 2012, which represents almost 85% of our revenue generated from Capital Award’s consulting and servicing contracts in 2011. We expect this trend to continue as more interest develops for this technology in China.
The projected 21M makes sense b/c the construction of both Phase 1 and Phase 2 all happens in 2012. so the whole contract value of 221M can be booked to 2012. In most other projects, construction stretches over 2 calendar years. What's also exciting is the sales of the grown-out prawn in the 16 APM tanks built in Phase 2, starting next year. I donot know the total production capacity of the grow-out tanks but if it's just 500MT in 2013 and ASP=$15/kg min (compared to $25/kg for sleeepy cod), that's about 7.5M sales of prawn plus maybe 20M from sales of 5B prawn flies. So this makes this baby-prawn farm a very profitable project.
Let's keep an eye on this baby.
PS: I will be on vacation for the next 8 days and will not have my laptop with me. Will try to stay in touch via my iphone if it works.
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