Sino Grandness

(09-03-2015, 05:12 PM)chinafarmer Wrote:

(09-03-2015, 08:06 AM)Young Investor Wrote: If Sino G is not a fake company, it should be able to borrow money from the banks to pay the convertible bonds even if IPO is not successful.

If Sino G is not a fake company, sales figures are then real which means receivables are real too. As such, a better test would be its ability to pay off the convertible bonds from its receivables.

In the FY14 results, Trade Receivables amounted to RMB 1,110,207 m. Isn't this amount more than enough to pay off the bondholders?

The first CB will be expired in Jun 15 and second CB in Jul 15. The trade receivables can be used as contingency to pay off the bondholders by then. Sino G mentioned that Garden Fresh has 230 distributors and credit terms and credits limits to customers will be based on the duration of the relationships with the company. Customers with longer and better payment record, will be given longer credit terms.

is now a good time to invest in sino grandness at a value pricing?

(10-03-2015, 03:43 PM)butcher Wrote: is now a good time to invest in sino grandness at a value pricing?

To make a bet for upside yes, to invest probably not

Why not? I see that P/E at 3.22 times based on 28 cents closing price today at google finance.

Net assets value at 31/12/14 at RMB 2.34 which approximates S$0.51 and assuming today NAV approximates that at 31/12/14 is it now trading at 45% discount?

Doesn't it fulfils the criteria of being a value investing opportunity in accordance to the value trading concept as practised by fellow value buddies here?

(10-03-2015, 06:38 PM)butcher Wrote: Why not? I see that P/E at 3.22 times based on 28 cents closing price today at google finance.

Net assets value at 31/12/14 at RMB 2.34 which approximates S$0.51 and assuming today NAV approximates that at 31/12/14 is it now trading at 45% discount?

Doesn't it fulfils the criteria of being a value investing opportunity in accordance to the value trading concept as practised by fellow value buddies here?

The problem here is how REAL is the $0.51 NAV? Eratat also looks super duper attractive before it go burst (trading below cash/share), but look at it now? (oppss...it's not in the heaven, but in the hell i guess)

(10-03-2015, 11:39 AM)Young Investor Wrote:

(09-03-2015, 05:12 PM)chinafarmer Wrote:

(09-03-2015, 08:06 AM)Young Investor Wrote: If Sino G is not a fake company, it should be able to borrow money from the banks to pay the convertible bonds even if IPO is not successful.

If Sino G is not a fake company, sales figures are then real which means receivables are real too. As such, a better test would be its ability to pay off the convertible bonds from its receivables.

In the FY14 results, Trade Receivables amounted to RMB 1,110,207 m. Isn't this amount more than enough to pay off the bondholders?

The first CB will be expired in Jun 15 and second CB in Jul 15. The trade receivables can be used as contingency to pay off the bondholders by then. Sino G mentioned that Garden Fresh has 230 distributors and credit terms and credits limits to customers will be based on the duration of the relationships with the company. Customers with longer and better payment record, will be given longer credit terms.

Are you saying to do Receivables Factoring? Or you are saying the business customers will suddenly agree to pay off their receivables early so Sino G can pay off debt?

(10-03-2015, 06:49 PM)desmondxyz Wrote:

(10-03-2015, 06:38 PM)butcher Wrote: Why not? I see that P/E at 3.22 times based on 28 cents closing price today at google finance.

Net assets value at 31/12/14 at RMB 2.34 which approximates S$0.51 and assuming today NAV approximates that at 31/12/14 is it now trading at 45% discount?

Doesn't it fulfils the criteria of being a value investing opportunity in accordance to the value trading concept as practised by fellow value buddies here?

The problem here is how REAL is the $0.51 NAV? Eratat also looks super duper attractive before it go burst (trading below cash/share), but look at it now? (oppss...it's not in the heaven, but in the hell i guess)

Just because Blumont, Asiason and Liongold are still listed nobody use them as an example. Are they better off than Eratat? At least Eratat didn't even reach $1/- but they are people who bought blumont at $2/- before the price plunged.

Just be careful when come to investment, s-chip or not. Focus on discussing the stock and not the stock is an s-chip stock.

(10-03-2015, 06:49 PM)specuvestor Wrote:

(10-03-2015, 11:39 AM)Young Investor Wrote:

(09-03-2015, 05:12 PM)chinafarmer Wrote:

(09-03-2015, 08:06 AM)Young Investor Wrote: If Sino G is not a fake company, it should be able to borrow money from the banks to pay the convertible bonds even if IPO is not successful.

If Sino G is not a fake company, sales figures are then real which means receivables are real too. As such, a better test would be its ability to pay off the convertible bonds from its receivabl

In the FY14 results, Trade Receivables amounted to RMB 1,110,207 m. Isn't this amount more than enough to pay off the bondholders?

The first CB will be expired in Jun 15 and second CB in Jul 15. The trade receivables can be used as contingency to pay off the bondholders by then. Sino G mentioned that Garden Fresh has 230 distributors and credit terms and credits limits to customers will be based on the duration of the relationships with the company. Customers with longer and better payment record, will be given longer credit terms.

Are you saying to do Receivables Factoring? Or you are saying the business customers will suddenly agree to pay off their receivables early so Sino G can pay off debt?

Receivables factoring is not advisable as it involved high discount rate, although factoring in China has grown over the year. Business customers will pay off their receivables depend on their credit term.

(10-03-2015, 06:38 PM)butcher Wrote: Why not? I see that P/E at 3.22 times based on 28 cents closing price today at google finance.

Net assets value at 31/12/14 at RMB 2.34 which approximates S$0.51 and assuming today NAV approximates that at 31/12/14 is it now trading at 45% discount?

Doesn't it fulfils the criteria of being a value investing opportunity in accordance to the value trading concept as practised by fellow value buddies here?

Value investing should not be an intense focus on finding companies with low valuations without understanding the business fundamentals and associated accounting controversies (in SinoG's case - substantial increase in ageing receivables, capex and intangibles)

Please try to move away from the "cigar butt investing approach" and focus on finding businesses with sustainable competitive advantages or economic moats with a margin of safety that you are comfortable with.

To quote Buffett: "If the choice is between a questionable business at a comfortable price or a comfortable business at a questionable price, we much prefer the latter. What really gets our attention, however, is a comfortable business at a comfortable price."

Sino Grandness reminds me of my experience with Hongwei which I would like to share. This is not implying anything against Sino Grandness. Just that the sheer "value" of the stock now brings to mind this painful episode.

Essentially, Hongwei (in my mind) had everything going for it - Increasing profitability, a more than decent dividend yield since IPO and for at least 2 consecutive years to (kind of) imply that the cash is real, low PE Ratio, high margins, prominent fund manager investing (Tembusu Partners) and even consistent insider purchases.

Essentially, GROSSLY UNDERVALUED was staring me right in the face back then. Fast forward to not too long ago when my investment in Hongwei was realized - I received a pink shareholder certificate

Moral of the story: Sometimes value may stare at us right in the face but there may be more to it than meets the eye