Sino Grandness

Analyst view on the company latest report. The focus still on the IPO, and fund raising if not materialized. The company has subjected to too many uncertainties, which Mr. Market hates...

(not vested)

Sino Grandness shares sink on 4Q2014 loss, fundraising concerns

SINGAPORE (March 2): Shares of Sino Grandness Food Industry Group ( Financial Dashboard) sank to their lowest in more than two years after the Shenzhen-headquartered canned food maker turned in a 4Q2014 net loss of RMB64 million ($14 million), reversing a profit of RMB32.5 million a year earlier.

At 10:12am (0212 GMT), the stock was down 20.9% at 34 cents, off an early low of 33 cents, a level previously reached in January 2013.

Sharply higher distribution, selling and finance costs, as well as losses in the fair-value of the convertible bonds issued by its Hong Kong unit Garden Fresh, weighed on its 4Q2014 bottom line.

Overseas sales of its canned products also fell substantially during the quarter, down 48% at RMB70.4 million.

The results brought its full-year earnings to RMB233.4 million, down from RMB287.7 million in 2013.

The decrease was due to higher operating and finance costs and changes in the fair value of Garden Fresh's convertible bonds.

"As Garden Fresh's IPO deadline of July 2015 draws near, Sino Grandness booked RMB34.9 million provisions for its convertible bonds," Maybank Kim Eng analyst Wei Bin wrote in a note today.

"These may face redemption pressure in the next few months," he said, adding that the company may need to issue at least 30% more equity to repay its convertible bond holders if it has no other sources of funds.

Wei, who has a "hold" call on the stock, cut his price target to 45 cents from 76 cents, valuing it at 3.5 times projected 2015 earnings.

http://www.theedgemarkets.com/sg/article...g-concerns

oopps..Just now i saw Curious Party posted something from SJ.. Who deleted it?

(02-03-2015, 04:05 PM)leeeta Wrote: oopps..Just now i saw Curious Party posted something from SJ.. Who deleted it?

I think he himself....

Even though I am vested, I too am getting skeptical on sfig end game. My feel is that the garden fresh ipo will not materialise in june 15. In addition, I will neither be adding or selling whatever stake I have for now. Will just watch how the game unfolds

(02-03-2015, 05:38 PM)desmondxyz Wrote:

(02-03-2015, 04:05 PM)leeeta Wrote: oopps..Just now i saw Curious Party posted something from SJ.. Who deleted it?

I think he himself....

FYI, It was deleted by me.

(02-03-2015, 05:56 PM)cyclone Wrote:

(02-03-2015, 05:38 PM)desmondxyz Wrote:

(02-03-2015, 04:05 PM)leeeta Wrote: oopps..Just now i saw Curious Party posted something from SJ.. Who deleted it?

I think he himself....

FYI, It was deleted by me.

Maybe Cyclone can explain the rational behind? Violation of rule?

The loquat has conveniently split its trade and other receivables into two lines instead of one under the balance sheet.

In 3Q14, Trade and Other Receivables amounted to RMB 1,449,265 m.

In the FY14 results, Trade Receivables amounted to RMB 1,110,207 m.
Other Receivables amounted to RMB 299,976 m.
As such for FY14, Trade and Other Receivables totaled RMB 1,410,183 m.

Seriously, the figure is astonishingly high and yet investors always shy away from confronting this issue. Rather, they hide behind three Loquat Trees:

1) The Thai Loquat Tree - The Thai is not stupid and due diligence has been done by the Thai.

2) The Supermarket Loquat Tree - The Loquat drinks are sold in reputable stores like Walmart, welcome, 7 11 etc. (Investors drag in names like Jardine Matheson too). As such, loquat investors claim since the following have allowed loquat drinks to be on their shelves the loquat sales must be good.

3) The Goldman Loquat Tree - How many times have we heard loquat supporters saying that Goldman could have redeemed the bonds but they chose not to? They also claimed Goldman has done due diligence hence the loquat is real. Seriously, can the loquat even pay off the bondholders should the bondholders redeem today?

Responsible investors do not shy away from real issues, hide behind others and push the due diligence to others.

I have highlighted some issues in my posts.

1) sky rocketing trade receivables and growth of receivables vs. revenues.

2) if slotting fees were being paid to supermarkets.

If slotting fees were indeed being paid ( I do not know), 7 11, welcome etc do not really give two hoots if the end consumer really buys them. They still earn slotting fees regardless if the product is being sold. As such the argument that sales of loquat drinks must be good just because these supermarket allowed them on the shelves for a long time, bears little weight.

3) Is there any relationship between the thai and any substantial holder(s) of loquat? How on earth did this Thai appear? I do not know. No one bothered to ask too.

4) Is Goldman the ultimate bondholder (with beneficial interests)? Have they sold the bonds and passed on the risk to their clients or other investors and by doing so earned their fees? I do not know too. Investors must ask the company.

Perhaps investors should spend some time getting real answers to the above points instead of pushing the responsibility of due diligence to the Thai, Goldman, 7 11 welcome etc. Afterall, it is your own money.

I am not vested. Neither short nor long.

I am a small time investor in public companies and do not have the resources to do my own due diligence on my investments. It is either I bet intelligently and take calculated risks in relying whatever information available in the market or be comfortable with the measly interest rates on bank deposits to grow my wealth.

The franchisees running 7-11 stores in Singapore do not get slotting fees, if any. it is Dairy Farm, the Singapore master franchisee of 7-11 that gets them, if any, from the distributors of FMCGs. The smaller franchisees still need to make profit from the sales of fast moving products and the master franchisee has vested interests that their many franchisees have a viable business. The 7-11 outlets in Guangzhou and HK that carry Garden Fresh products are likely to be run on similar business model.

(02-03-2015, 06:49 PM)chinafarmer Wrote: The loquat has conveniently split its trade and other receivables into two lines instead of one under the balance sheet.

In 3Q14, Trade and Other Receivables amounted to RMB 1,449,265 m.

In the FY14 results, Trade Receivables amounted to RMB 1,110,207 m.
Other Receivables amounted to RMB 299,976 m.
As such for FY14, Trade and Other Receivables totaled RMB 1,410,183 m.

Seriously, the figure is astonishingly high and yet investors always shy away from confronting this issue. Rather, they hide behind three Loquat Trees:

1) The Thai Loquat Tree - The Thai is not stupid and due diligence has been done by the Thai.

2) The Supermarket Loquat Tree - The Loquat drinks are sold in reputable stores like Walmart, welcome, 7 11 etc. (Investors drag in names like Jardine Matheson too). As such, loquat investors claim since the following have allowed loquat drinks to be on their shelves the loquat sales must be good.

3) The Goldman Loquat Tree - How many times have we heard loquat supporters saying that Goldman could have redeemed the bonds but they chose not to? They also claimed Goldman has done due diligence hence the loquat is real. Seriously, can the loquat even pay off the bondholders should the bondholders redeem today?

Responsible investors do not shy away from real issues, hide behind others and push the due diligence to others.

I have highlighted some issues in my posts.

1) sky rocketing trade receivables and growth of receivables vs. revenues.

2) if slotting fees were being paid to supermarkets.

If slotting fees were indeed being paid ( I do not know), 7 11, welcome etc do not really give two hoots if the end consumer really buys them. They still earn slotting fees regardless if the product is being sold. As such the argument that sales of loquat drinks must be good just because these supermarket allowed them on the shelves for a long time, bears little weight.

3) Is there any relationship between the thai and any substantial holder(s) of loquat? How on earth did this Thai appear? I do not know. No one bothered to ask too.

4) Is Goldman the ultimate bondholder (with beneficial interests)? Have they sold the bonds and passed on the risk to their clients or other investors and by doing so earned their fees? I do not know too. Investors must ask the company.

Perhaps investors should spend some time getting real answers to the above points instead of pushing the responsibility of due diligence to the Thai, Goldman, 7 11 welcome etc. Afterall, it is your own money.

I am not vested. Neither short nor long.

Strangely no iceberg or titanic research yet on Sino G. Only VBs are concerned it seems.

Frankly I won't even bother to continue this debate. To identify a undervalued company and to buy a lot and wait for value to be uncovered is a tedious process. Perhaps we should be channeling our limited resources to identify the next genuine undervalued gem.

No Vested Interests
GG

(02-03-2015, 05:46 PM)CY09 Wrote: Even though I am vested, I too am getting skeptical on sfig end game. My feel is that the garden fresh ipo will not materialise in june 15. In addition, I will neither be adding or selling whatever stake I have for now. Will just watch how the game unfolds

I thought WB's 2014 Words of Wisdom manual had a paragraph ideally suited for this:

Attentive readers will notice that Tesco, which last year appeared in the list of our largest common stock investments, is now absent. An attentive investor, I’m embarrassed to report, would have sold Tesco shares earlier. I made a big mistake with this investment by dawdling

I had to check out what 'dawdling' means on the dictionary:

dawdle
/ˈdɔːd(ə)l/
verb
gerund or present participle: dawdling
waste time; be slow.
"she mustn't dawdle—she had to make the call now"
synonyms: linger, dally, take one's time, drag one's feet, be slow, waste time, kill time, fritter time away, idle; More
delay, procrastinate, stall, hang fire, mark time, potter about/around/round;
informaldilly-dally, let the grass grow under one's feet;
archaictarry
"holidaymakers were dawdling over breakfast"
antonyms: hurry
•move slowly and idly in a particular direction.
"Ruth dawdled back through the wood"


I wished WB had published his mistake 4-5years earlier. Learning from the Sage, there was no way i would continue to hang onto my thin-threaded ego. It would have been easier to admit i was wrong after listening to the Sage, compared to heeling others' advice. Alas, History wouldnt let me have the easy way and i had to swallow a double digit wipe-out on my portfolio. Based on my own experience, recovering from a double digit wipeout in my portfolio would take 2-3years, while having to bear having others trumpet their yearly impressive CAGR when year end comes. Of course, end of the day, money lost can be eventually earned back, but that swagger is gone permanently.