1. Is the whole starch industry facing an excess capacity problem?? The potato starch price is still greatly depressed, and has been so since last year August??
2. Is Essence facing threat from many other hit-and-run types of smaller scale starch producers who are more nimble? Do these small producers only target potato starch? How about corn, tapioca, etc...
Som refreshing notes from economics:-
a. When a firm is operating below full capacity it can price below average cost and operate with economic losses for some time period so long as the price covers variable costs.
b. If industry has excess capacity, prices may fall below average cost and some firms may choose to exit
c. If exit is not an option (capacity is industry specific) excess capacity and losses can persist
(18-05-2012, 04:55 PM)Stockerman Wrote: [ -> ]I agree that it might go down even more from here...
Or it can just stagnate at less than 10 cents for the foreseeable future like a lot of S chips...once drop never ever see the sunlight again..
Share price can't be investor's number one concern under normal circumstances. It should be the undelying business. IF the company can handle the cash flows in orderly fashion AND if their underlying profitability can recover next winter, everything will be fine regardless of the share price. If they screw up with cash flow, they will find themselves belly up before autumn.
With these prerequisites, they will easily return to EPS at SGD 0,1 or more. If that should ever be reached, dividend yield alone would be up from a cent per share. Way up.
Need to see whether company gives us another heart attack again in June when they need to repay the CB instalment...
(21-05-2012, 06:15 PM)jzk Wrote: [ -> ] (18-05-2012, 04:55 PM)Stockerman Wrote: [ -> ]I agree that it might go down even more from here...
Or it can just stagnate at less than 10 cents for the foreseeable future like a lot of S chips...once drop never ever see the sunlight again..
Share price can't be investor's number one concern under normal circumstances. It should be the undelying business. IF the company can handle the cash flows in orderly fashion AND if their underlying profitability can recover next winter, everything will be fine regardless of the share price. If they screw up with cash flow, they will find themselves belly up before autumn.
With these prerequisites, they will easily return to EPS at SGD 0,1 or more. If that should ever be reached, dividend yield alone would be up from a cent per share. Way up.
8.5 cents .....will see 7 cents soon?
Zhao Li Bin quitted as CEO !!!
(23-05-2012, 08:51 PM)Underdogger Wrote: [ -> ]Zhao Li Bin quitted as CEO !!!
what happened? a case of pursuing personal interest again?
(23-05-2012, 09:22 PM)pianist Wrote: [ -> ] (23-05-2012, 08:51 PM)Underdogger Wrote: [ -> ]Zhao Li Bin quitted as CEO !!!
what happened? a case of pursuing personal interest again?
He is still remaining as executive chairman
He still has shares in the company....He probably had made his share then when the counter shot up to $1....
(23-05-2012, 09:46 PM)dzwm87 Wrote: [ -> ] (23-05-2012, 09:22 PM)pianist Wrote: [ -> ] (23-05-2012, 08:51 PM)Underdogger Wrote: [ -> ]Zhao Li Bin quitted as CEO !!!
what happened? a case of pursuing personal interest again?
He is still remaining as executive chairman
5 cents coming up soon ...
Geoinvesting...
I quote the following para in Edge Mag:-
"....we came back (from China) with just rocked us to the core. Fraud was pervasive and out in the open. We would ask our investigators to go visit a facility and they found it wasnt operating. i was shocked...."