Think you guys are all a bit too pessimistic. Economic cooling will affect exporters mainly. PRC is still a net importer of starch so govt will not allow destruction of local starch supply after putting up so many levies for euro starch.
Another thing is farmers need to get rid of their potatos. If CESS can't buy them, who will? It could turn out a bit like what euro govt have been doing for decades is subsidizing milk/meat/grain/etc.. So Cess can buy potato at lower price to make some margin to stay afloat and therefore helping farmers to offload.
At current price it is worth a gamble.
just my 2cts
Qingmei is a better gamble? No debt at all & each share is backed by more than 12 cents of cash....
As mentioned by underdogger, essence has sealed its fate by locking in potato price higher than the prevailing market prices for 50% of the potatoes needed...
The problem was that Essence did not have the money to buy the cheap potato last year. But this year, there might not be enough potatoes going around to be bought...
(05-09-2012, 10:21 PM)rstopel Wrote: [ -> ]Think you guys are all a bit too pessimistic. Economic cooling will affect exporters mainly. PRC is still a net importer of starch so govt will not allow destruction of local starch supply after putting up so many levies for euro starch.
Another thing is farmers need to get rid of their potatos. If CESS can't buy them, who will? It could turn out a bit like what euro govt have been doing for decades is subsidizing milk/meat/grain/etc.. So Cess can buy potato at lower price to make some margin to stay afloat and therefore helping farmers to offload.
At current price it is worth a gamble.
just my 2cts
(06-09-2012, 03:01 AM)Underdogger Wrote: [ -> ]...it plans to produce 80k ton this year...
Is this based on company announcements or external analysis?
(06-09-2012, 08:15 PM)jzk Wrote: [ -> ] (06-09-2012, 03:01 AM)Underdogger Wrote: [ -> ]...it plans to produce 80k ton this year...
Is this based on company announcements or external analysis?
Pls see attached AGM FAQs...
almost every other S chip counter is like a few cents...
Fuxing, Chinapaper, Essence, China Bearing, Qingmei, China Sports, China New Town, China Energy, Anchun, China XXX, China YYY...
All have quite "high" NAV , but NAV will never be used if the stocks are not on-going concerns and are delisted due to cashflow issue, etc...
CEOs have to be "good salesman" too..
Any views pls?
(11-09-2012, 01:13 PM)Curiousparty Wrote: [ -> ]almost every other S chip counter is like a few cents...
Fuxing, Chinapaper, Essence, China Bearing, Qingmei, China Sports, China New Town, China Energy, China XXX, China YYY...
potato prices seem to be dropping?
strange....does not bode well for starch prices which are still depressed...
Hi d.o.g
Could you elaborate on what you think is fishy about China Essence?
Tks.
(17-08-2012, 11:12 PM)d.o.g. Wrote: [ -> ]Musicwhiz Wrote:I think this fund probably didn't realize what was happening and thought it was purchasing a bargain.
I looked up Sanlam. They are a financial services group with operations in banking, insurance and asset management.
In the annual report of their funds they list all the holdings in the funds they manage.
China Essence appears in the Sanlam Global Best Ideas Fund (0.96% of the fund)
I noticed that they also own:
Chaoda Modern, at 1.19% of the fund;
China Green, 1.88%; and
Xingda International, 0.45%
I have studied all 4 companies before. All were priced cheaply at some point (which is why I was looking). But China Essence, Chaoda Modern and China Green all have fishy accounting problems of some sort. I didn't find accounting issues at Xingda, but after I met them last year, I concluded that it was a pretty poor business - capital intensive and no pricing power.
So it appears that at least for these 4 stocks Sanlam was buying on quantitative metrics (PE, P/B etc) instead of really trying to understand the business.
heard that starch price still very depressed...even if Essence can just cover its marignal cost of production to keep its head above the water, how long can it survive before defaulting on its debt repayment?
We are talking about quite a massive debt (local govt short terming borrowing plus CB plus DBS loans)...