ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

u mentioned this a few times

there are many formers here but there are some who knows their stuff better though not infallible. i would have higher confidence reading their stuff even though i don't see them do their homework. it's the same logic

(02-04-2016, 02:25 PM)butcher Wrote: [ -> ]No offence meant, Big four isn't that much better also.  Recently, I have interactions with auditors from D (1 of Big 4).  They asked for confirmation for millions of loan for one of the company with is wrong but should in fact be another company.  I asked them and they insisted they were right, they seriously never read the loan agreement.  What kind of audit quality??

Big 4 doesn't mean good quality nor mid tiers mean bad quality.  Alot of high profile fraud happened at Big 4 also..

haha
well, everyone have their own opinion.. it is like people think it is worth paying more for a LV wallet rather than paying less for a value for money less branded wallet..

does that means companies not audited by big 4 are riskier? haha

(01-04-2016, 08:41 PM)eyesonme Wrote: [ -> ]

(01-04-2016, 03:37 PM)specuvestor Wrote: [ -> ]I can see Yihai here: http://www.hkexnews.hk/APP/SEHKAPPMainIndex.htm

But I can't see Garden Fresh... can you provide the link? I'm keen to know who is the sponsor and auditor

http://www.hkexnews.hk/APP/SEHK/2016/201...010011.pdf

Sole Sponsor - DBS Asia Capital Limited
Auditors and Reporting Accountants - BDO Limited
Latest Practicable Date - [June 20], 2016
Listing Date - [July 6], 2016

Hi,


Trying to locate the "listing date" for the report, can u enlighten me on which page show the dates. Many thanks.

Any view on DBS being the sponsor?

Well, DBS should be a well established and recognised name

Some interesting points from the voluminous draft IPO prospectus.

Pure loquat juice vs mixed loquat juice

....................................................................2015

................................Sales vol (tonnes)...Ratio......Revenue (RMB m)...Ratio
 
Pure loquat juice
(100% and 50%)...............140..................1.00....................904...........1.00
Mixed loquat juice.............316..................2.26.................1,174...........1.30

(page 2 and 3 of draft prospectus)

Mixed loquat juice outsold pure loquat juice, in volume, by a wide margin. It also raked in more revenue though its average selling price (RMB 3,719 per tonne) was much lower than those of 100% loquat juice (RMB 8,837 per tonne) and 50% loquat juice (RMB 5,651 per tonne).

Advertising & promotion

For the first time, investors have glimpse of how much Garden Fresh spent on A&P (page 211). Subtracting this from Sino Grandness' overall A &P shows that with rising sales of canned products within China, a bigger portion of revenue had been set aside to promote the "Grandness" brand:

..............................................RMB m
.................................2013........2014..........2015

Sino Grandness...........59.7......201.3..........351.1
% of group revenue........2.6..........7.1............10.6

Garden Fresh..............58.5.......172.9..........267.9
% of revenue.................4.2...........9.2...........11.6

Grandness....................1.2.........28.4...........83.2
% of revenue.................0.2...........3.0.............8.8

Distribution

Page 138 states that Garden Fresh adopts a flat distribution system in which distributors sell directly to retailers. 

Page 141 states that the distributors are required to employ persons designated by Garden Fresh to monitor performance.

In contrast, Huiyuan's distributors "contract sub-distributors in their respective regions to assist them in the distribution of [its] products to rural and more remote areas" (page 98 of Huiyuan's IPO prospectus).

New capacity

Garden Fresh existing factories at Sichuan and Hubei have a combined capacity of 290,000 tonnes per year, and they contributed half of beverage revenue. 

Another 510,000 tonnes of juice capacity and 15,000 tonnes of puree capacity will be added and RMB 1,140m of the IPO proceeds is needed for completion of the projects (page 149).

Expected size of IPO

Unlike Dali Foods that raised around RMB 7 billion in November 2015 from global offering, Garden Fresh's funding need is much smaller. 

Garden Fresh's bank borrowings were only RMB 70m. It is required to redeem 40% of the convertible bonds in two stages -- RMB 107m on 31 May 16, and RMB 197m on 1 March 2017. Its 2015 profit was RMB 385m. Even if it stagnates at 2015 level, profit in 2016 will be enough to pay off RMB 374m (= 70 + 107 + 197).  

Once the IPO materialises, the remaining, 60%, CB liabilities will be wiped off and Garden Fresh is debt-free. An IPO that raises around RMB 1,200m to yield a net proceeds of around RMB 1,140m to fund capex may be what we can expect. 

Trade receivables

Trade receivables of Garden Fresh decreased by RMB 171m in 2015 despite sales being higher by RMB 432m (page I-31):

...........................................RMB m 

.........Trade receivables as at end......Sales for the year 
  
2013...................421.85........................1,382
2014...................766.74........................1,877
2015...................595.29........................2,319

Moreover, trade receivables past due at end-2015 were a minuscule RMB 15,000, down from RMB 104.4m the year before.

Was this the result of tight oversight of distributors? 

Huiyuan IPO in 2007

In February 2007, Huiyuan raised RMB 2.36 billion, based on 45.6 times 2006 estimated attributable profit of not less than RMB 200m. 

http://www.bloomberg.com/newhttp://www.b...po-correct

Huiyuan 2005 attributable profit was RMB 107m on sales of RMB 1,3 billion.

Garden Fresh's 2015 profit was RMB 385m on sales of RMB 2,319m.

[Image: km1.png][Image: km2.png]

Hi All

Seems strange that this Simeone Ang from Kim Eng reported the following. Kim Eng shows that Sino grandness  PE is 11, this is based on reported profit of 206m rmb.

The actual reported profit is 518m rmb and PE less than 5.

Any comments?

Cheers
Oldman9

(06-04-2016, 08:41 AM)Oldman9 Wrote: [ -> ][Image: km1.png][Image: km2.png]

Hi All

Seems strange that this Simeone Ang from Kim Eng reported the following. Kim Eng shows that Sino grandness  PE is 11, this is based on reported profit of 206m rmb.

The actual reported profit is 518m rmb and PE less than 5.

Any comments?

Cheers
Oldman9

Hi Oldman9,


This Simeone Ang like most of the people don't bother to read and research in details before putting up the report. The adjusted profit for Garden Fresh alone was already RMB 385 mil in 2015.

After going through the draft prospectus again, the Latest Practicable Date of 20 June 2016 and Listing Date of 6 July 2016 can be found in page 20 and 21 respectively.

Who is this someone ang? analyst?

(03-04-2016, 05:20 PM)portuser Wrote: [ -> ]Huiyuan IPO in 2007

In February 2007, Huiyuan raised RMB 2.36 billion, based on 45.6 times 2006 estimated attributable profit of not less than RMB 200m. 

http://www.bloomberg.com/newhttp://www.b...po-correct

Huiyuan 2005 attributable profit was RMB 107m on sales of RMB 1,3 billion.

Garden Fresh's 2015 profit was RMB 385m on sales of RMB 2,319m.

Majority of Fund Managers have heard of Huiyuan when it IPOed and if I recall correctly Coca Cola was also interested to acquire it before it even IPO.

Huiyuan's 2015 profit is RMB211.8m (excluding CB cost and options) and on sales of RMB5.682b