Thread Rating:
  • 1 Vote(s) - 1 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Foreland Fabrictech
14-05-2011, 06:59 PM. (This post was last modified: 14-05-2011, 07:58 PM by dydx.)
Post: #31
RE: Foreland Fabrictech
Foreland shareholders should spend some time to review Foreland's latest announcement (dated 13Mar11) - in response to SGX's queries on the Q1-FY11 results announcement (first released on 9May11) - closely....
http://info.sgx.com/webcoranncatth.nsf/V...penelement

Quite obviously, the review officer and his boss in SGX - after so many bad surprise cases among PRC companies recently - didn't wish to just accept Foreland's solid Q1-FY11 results and decided to ask for a lot more details. I am indeed happy that this has happened, as through the response I can now know more about the characteristics of Foreland's growing and profitable business and better assess the quality of Foreland's management. Of course, the SGX query has also served to put Foreland's management and the entire BOD (including the IDs) on guard on keeping up - including the quality aspect - with the company's public disclosures to shareholders and the market.

From the response (which should be read together with the Q1-FY11 results announcement), we can now know and should take note of the following -
(1) Foreland now has and enjoys a strong niche market in supplying "high-grade umbrella fabrics" to 42 PRC-based umbrella manufacturers - including 10 new customers secured just before and during Q1-FY11. Based on the sales volume (measured by quantity) of 6.0m yards achieved in Q1-FY11, this fast-growing product and market/customer segment alone contributed to a large 48.9% of total sales volume of 12.3m yards. As the 10 new customers contributed only 12% of the total revenue from this product segment in Q1-FY11, it appears that there is still quite a lot of growth potential from this 'rising star' product/customer segment.

(2) The other 2 product segments of "functional fabric" and "normal fabric" - now supported by 129 customers, including 10 new customers secured in Q1-FY11 - also registered strong growth in sales volume and contributed to the remaining 51.1% of total sales volume (measured by quantity) in Q1-FY11. In total, Foreland's well-established business of producing different types of high-end functional fabrics is now supported by 151 customers, including 20 newer ones.

(3) In Q1-FY11, by achieving a sales volume of 12.3m yards, Foreland managed to run its total production capacity of 14.5m yards/quarter at a high utilization rate of 88.3%. This has enabled the business to achieve high efficiency (including lower unit production cost/COGS), which is fully reflected in the sharp rise in profitability and the high profit numbers at GP, PBT and NP levels. Such a state of operation would usually lead to a management response, to (a) maximize profits further by focussing on higher price/margin orders and other product/customer trade-off decisions; and (b) plan and invest in capacity increase, which in Foreland's case is already at an imminent stage.

Find Reply
15-05-2011, 05:29 PM.
Post: #32
RE: Foreland Fabrictech
You are quite right that the response to the review officer has a high quality and the figures of the operational business are excellent.

But I am suprised that the review officer did not ask concering the assets of the company. In the balance sheet you still find 231 Mio. RMB construction in progress for the new facilities in the Andong Industrial Area. Up to now we do not get any informations about the current situation. I still fear that there could be a huge depreciation on this topic. The shareholders can be happy that the company do not depend on bank loans.

(14-05-2011, 06:59 PM)dydx Wrote: Foreland shareholders should spend some time to review Foreland's latest announcement (dated 13Mar11) - in response to SGX's queries on the Q1-FY11 results announcement (first released on 9May11) - closely....
http://info.sgx.com/webcoranncatth.nsf/V...penelement

Quite obviously, the review officer and his boss in SGX - after so many bad surprise cases among PRC companies recently - didn't wish to just accept Foreland's solid Q1-FY11 results and decided to ask for a lot more details. I am indeed happy that this has happened, as through the response I can now know more about the characteristics of Foreland's growing and profitable business and better assess the quality of Foreland's management. Of course, the SGX query has also served to put Foreland's management and the entire BOD (including the IDs) on guard on keeping up - including the quality aspect - with the company's public disclosures to shareholders and the market.

From the response (which should be read together with the Q1-FY11 results announcement), we can now know and should take note of the following -
(1) Foreland now has and enjoys a strong niche market in supplying "high-grade umbrella fabrics" to 42 PRC-based umbrella manufacturers - including 10 new customers secured just before and during Q1-FY11. Based on the sales volume (measured by quantity) of 6.0m yards achieved in Q1-FY11, this fast-growing product and market/customer segment alone contributed to a large 48.9% of total sales volume of 12.3m yards. As the 10 new customers contributed only 12% of the total revenue from this product segment in Q1-FY11, it appears that there is still quite a lot of growth potential from this 'rising star' product/customer segment.

(2) The other 2 product segments of "functional fabric" and "normal fabric" - now supported by 129 customers, including 10 new customers secured in Q1-FY11 - also registered strong growth in sales volume and contributed to the remaining 51.1% of total sales volume (measured by quantity) in Q1-FY11. In total, Foreland's well-established business of producing different types of high-end functional fabrics is now supported by 151 customers, including 20 newer ones.

(3) In Q1-FY11, by achieving a sales volume of 12.3m yards, Foreland managed to run its total production capacity of 14.5m yards/quarter at a high utilization rate of 88.3%. This has enabled the business to achieve high efficiency (including lower unit production cost/COGS), which is fully reflected in the sharp rise in profitability and the high profit numbers at GP, PBT and NP levels. Such a state of operation would usually lead to a management response, to (a) maximize profits further by focussing on higher price/margin orders and other product/customer trade-off decisions; and (b) plan and invest in capacity increase, which in Foreland's case is already at an imminent stage.


Find Reply
15-05-2011, 05:53 PM.
Post: #33
RE: Foreland Fabrictech
(15-05-2011, 05:29 PM)cosvalue Wrote: But I am suprised that the review officer did not ask concering the assets of the company. In the balance sheet you still find 231 Mio. RMB construction in progress for the new facilities in the Andong Industrial Area. Up to now we do not get any informations about the current situation. I still fear that there could be a huge depreciation on this topic. The shareholders can be happy that the company do not depend on bank loans.

Perhap the following extract from the Chairman's Message by Executive Chairman Tsoi Kin Chit in the latest FY10 AR will help you.....

"We also expect our new production facility to be operational once
we obtain approval from the local environmental authority. Located in the Andong Industrial Area, Jinjiang City, Fujian Province, this new facility covers more than twice the land area of our existing plant and will further increase our Groupâ€s production capacity."


It appears to me that the start-up of Foreland's new production facility at Andong Industrial Area is quite imminent.

Find Reply
16-05-2011, 10:17 AM.
Post: #34
RE: Foreland Fabrictech
Foreland has just announced that the new shares to be issued to shareholders who opt to receive the Rmb 0.02/share Final dividend for FY10 will be priced at $0.122/share.....
http://info.sgx.com/webcoranncatth.nsf/V...penelement

As Foreland share at the last done $0.13 remains grossly under-priced - vs. its lastest NAV/share at Rmb1.14 (approx. S$0.216) as at 31Mar11 - I guess we can reasonably expect most of the shareholders having a longer-term view on this promising business would opt to take the coming dividend in scrip.

Find Reply
18-05-2011, 09:48 AM.
Post: #35
RE: Foreland Fabrictech
This morning (18May11), Foreland released the presentation slides used for a results briefing to analysts and fund managers apparently to be held later today.....
http://info.sgx.com/webcoranncatth.nsf/V...penelement

Let's hope there will be more broker/analyst reports and coverage coming out soon..

Find Reply
25-05-2011, 08:19 AM.
Post: #36
RE: Foreland Fabrictech
Interesting company, and interesting business they are into as well.

Thanks dydx for the heads up. Smile

Incidentally, Foreland issued a trading halt this morning (May 25, 2011). Possible M&A activity?
=========== Signature ===========
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/

http://sgmusicwhiz.blogspot.com
Website Find Reply
25-05-2011, 09:47 AM.
Post: #37
RE: Foreland Fabrictech
Privatisation or dual listing in the works?

Find Reply
25-05-2011, 07:19 PM.
Post: #38
RE: Foreland Fabrictech
(25-05-2011, 09:47 AM)iisterry Wrote: Privatisation or dual listing in the works?

U 1/2 right..

PRIVATE PLACEMENT at 0.1235...
Big GrinBig GrinBig GrinBig GrinBig Grin

Find Reply
25-05-2011, 07:54 PM.
Post: #39
RE: Foreland Fabrictech
I guess this explains the corporate presentation uploaded a week ago !

(Not Vested)
=========== Signature ===========
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.

Find Reply
13-06-2011, 09:35 PM.
Post: #40
RE: Foreland Fabrictech
Foreland has (on 9Jun11) completed the placement of 45.0m new shares at $0.1235/share first announced on 25May11.....
http://info.sgx.com/webcoranncatth.nsf/V...penelement [25May11 announcement]
http://info.sgx.com/webcoranncatth.nsf/V...penelement [13Jun11 announcement]
Following this placement, Foreland's issued share capital has increased to 500,439,150 Shares, and accordingly, Chairman Tsoi Kin Chit's interest in Foreland has been reduced to 58.07% (from 63.81%).....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

As Foreland's share price has fallen to $0.12 at today's close, the 4 placees under this placement should be feeling a little uneasy now!

Find Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)
Valuebuddies.com | Return to Top | Lite (Archive) Mode | RSS Syndication | CONTACT US: nas......@valuebuddies.com | | Share Buy-Back | Disclosure of Interest