Replies to post #30143 on Sino Agro Food Inc (fka SIAF)

[stolpen]

Seems to be a very reasonable margin of safety strategy to me aswell, had not given it much thought considering the A-power technology advantages making for high probabilities to keep building quite some time going forward if they are able to sell the concept to more provinces and multiplying in thoose already present, the sheer advantage of a closed watersystem not polluting sea and rivers in the operation alone seems to be a necessity for todays china, but your thought did appeal to me i will try it out thanks :-)
Regards.

[Traderfan]

So you think that is part of the reason why the market isn't taking SIAF's numbers one bit serious??

[viking86]

To be safe, I would remove all revenue items related to "construction and consulting services" from the financials and re-evaluate the company's intrinsic value from there.

the intrinsic value of SIAF as the holder of a revolutionary technology in modern aquaculture and animal husbandry is not in the sales of fish and cattle. It's a mistake to reduce them to the role of a fish and cattle farmer. It's like you are stripping Microsoft from their IT knowhow and see them as a chip builder. JMO

[slyestjester]

Prokopton--If you find consulting and construction revenue suspicious then you have never looked at the income statement of an engineering and construction company. This is no different from a real estate company constructing a building and then having subsequent buyback provisions. In itself, there is nothing suspicious about it at all. SIAF is an engineering company and a producer of agricultural products and a wholesaler and a restaurant owner and it will be an owner of retail establishments. It's this diversity that allows it to integrate and become a low-cost producer. Once fully implemented it will be hard for any company to reasonably compete against SIAF.

[The Swede]

I don't know how much you have studied SIAF and the creating of a Joint Venture.



But I will try to demonstrate how a typical JV is formed and payed for and how the money flow is in an extremely shortened version.


Total cost for crating the JV - $1000
Total amount payed by Joint Venture Partner - $750 for 75% of the JV
Total amount payed by SIAF subsidiary - $250 for 25% of the JV

Total amount that is charged to SIAF subsidiary for services - $1000. Profit from services made by SIAF subsidiary is ~$500.

SIAF subsidiary pays $500 Joint Venture Partner to increase its holding from 25% to 75%.


In the end SIAF has payed a total sum of 250+500= $750 but they have made a profit from service fees- $500. So the total actual cost is $250 for 75% of the Joint venture.

Joint Venture Partner payed initially $750, but SIAF subsidiary payed $500. So the total cost is $250 for 25% of the Joint venture.

---------

What you are basically asking for is to cut out the revenue made by SIAF subsidiary and have them working "pro bono". Let each partner pay $250 each initially instead and then let the SIAF subsidiary be rewarded with assets in the end for it's know how?

[mauiguy2]

My OPINION on SIAF is that it's a legitimate company with some accounting shenanigans to pad its revenue.

My biggest fear (and, perhaps a totally needless fear) is that there are indeed some "accounting shenanigans" going on at SIAF. And, that some determined company like GEO will suddenly expose these shenanigans.

Also, I think Chad has made some enemies with his various rants on various boards. And, if I recall correctly, GEO doesn't have a good relationship with Chad. So, if there are any shenanigans going on within SIAF, you can bet that a company like GEO is hot on the trail.

But, the good news is that nothing has been officially uncovered or publicized yet. Hopefully, there's nothing to be uncovered despite, most likely, efforts to do so.

To stay invested in SIAF is a high risk/high reward situation. Our eyes need to be wide open. I've remained invested here because I think there is potentially great opportunity here. But, nobody knows for sure.

I just wish SIAF would be more transparent to its shareholders and potential investors. There is SO much guessing going on here. I just hate watching the company remaining silent as the PPS continues to crumble and more talk about SIAF being another ChiScam.

The next 3 months will be VERY telling/interesting for SIAF and its future.