Replies to post #27812 on Sino Agro Food Inc (fka SIAF)

[viking86]

They would issue 10m shares to raise cap ex funds by $25M and get a 40% return, or $10M

that's the same as what I said. Raising $25m by issuing 10m shares means shares must be issued at pps= $2.5 or a p/e=2.5 in order to be accretive. But doesnt that refute Ecuador's math that shows dilution is accretive at p/e=1 ? That would require a 100% return which is way too high, wouldn't it? Even their most profitable segment has "only" a return of 40% as indicated in my post.

[Andrew26]

Thats fully right. Which makes the huge dilution at this level even harder to undestand and feels fishy to me. One time from bad estimation - ok. But we are into 3rd year of this junk.

Anyway, thats the way it is and now lets see if they can deliver double listing as promised and some bond deal. If either of these two fails, something is very wrong with this company.

Btw whats the general expectation for this year as dividend? What part in money some time in January 2014 and what part in promise for the future? Anyones guess?

[slyestjester]

Where do you get your 40% return figure for marginal capital development expenses? What is the source?

The way I look at it is: Equity at the end of the last quarter was 174 mil. Subtract from that land values (55 mil) and the value of the dairy loan (13 mil) and you get a remainder of 106 mil. There is no indication that they plan to make more loans similar to the dairy loan or that they plan to further invest in land at this point. So the funds received from dilution will not be spent in either of these areas. What it will be spent on is projects that generate a much higher immediate return. If they generate 100 mil in earnings in the year subsequent to the last quarter they will generate almost 100% return on non-loan, non-land assets. That's why the dilution is minor.