Sino Grandness

(04-01-2016, 10:20 AM)CY09 Wrote: Dug through their actions and realise both had similarities.

Eratat made announcement that it was "accepted as sponsor for the apparel of the male cast in a movie《瘦身魔方》co-produced with Hunan Satellite TV in 2012.", held TV advertising commercials and is "nationally promoted via a weekly TV programme on a martial art called Judose"

In addition, during a period of time, Wang Lee Hom (then well known Taiwanese Singer), was their brand ambassador in 08. Eratat held runway shows too to promote their products which resulted in roaring sales. I remember singapore investors were invited to these shows (Voyage research analysts etc). On the shop front, I rmb Boon from VB was even able to take a look at its stalls in China

While i am not saying SFIG will go down this road, there are similarities

Personally, I will recommend investors of SFIG to make a trip to Hong Kong* and scan the shelves of random Wellcome/ 7-11 shops. There are many wellcome supermarkets so feel free to pick a few to visit. You may/may not be surprised

<divested>
*if you do, please buy me a large tin of jenny cookies. Thanks

Garden Fresh juice is being distributed in Hong Kong by Hing Sang, which is listed on the Hong Kong Stock Exchange..

Page 98 of Hing Sang's IPO prospectus sates:

"We understand that both the variety of products and the network of brand proprietors (who are mainly manufacturers) are essential to our long-term success as a brand manager in Hong Kong. Hence, we have adopted a stringent approach in the selection and sourcing of brand proprietors and brands as follows:
(i) conducting a preliminary check on the brand proprietor’s credentials to ascertain their background and goodwill and estimate the projected sale of a particular product manufactured and/or supplied by it. The selection criteria for potential brand proprietors are based on factors such as: (a) whether the target brand proprietor is carrying on a business which is in the same industry as or complementary to the business of our Group; (b) the profitability and/or sustainability of the brand proprietor’s business; © the brand proprietor’s reputation in the industry; and (d) the prospect of expanding the market share of our Group in the target region; and
(ii) interviewing frontline salespeople and retail outlets in Hong Kong, such as individual retailers and chain retailers, so as to gather more updated information on, inter alia, consumers’ preferences on the kind of products, and the quality and safety of the products manufactured and distributed by them."

We do not know whether due diligence had been exercised by Hing Sang in distributing Garden Fresh to Wellcome in 2014.

But in 2015 Hing Sang added 7-Eleven and ParknShop.

It is common knowledge that supermarket chains do not take on new products easily; and products that are not selling well are dropped. 

(04-01-2016, 10:20 AM)CY09 Wrote: Dug through their actions and realise both had similarities.

Eratat made announcement that it was "accepted as sponsor for the apparel of the male cast in a movie《瘦身魔方》co-produced with Hunan Satellite TV in 2012.", held TV advertising commercials and is "nationally promoted via a weekly TV programme on a martial art called Judose"

In addition, during a period of time, Wang Lee Hom (then well known Taiwanese Singer), was their brand ambassador in 08. Eratat held runway shows too to promote their products which resulted in roaring sales. I remember singapore investors were invited to these shows (Voyage research analysts etc). On the shop front, I rmb Boon from VB was even able to take a look at its stalls in China

While i am not saying SFIG will go down this road, there are similarities

Personally, I will recommend investors of SFIG to make a trip to Hong Kong* and scan the shelves of random Wellcome/ 7-11 shops. There are many wellcome supermarkets so feel free to pick a few to visit. You may/may not be surprised

<divested>
*if you do, please buy me a large tin of jenny cookies. Thanks

All those China companies have this kind of sexy story to attract investors and boy do they love to leverage up with other people's money.

Usually a good business, especially one in F&B with products selling well, should be able to grow organically without taking on too much debt. Bond issue / warrants issue / rights issue, all these are very rare in honest and solid companies.

CY09 gotta agree with you on this one, there is enough evidence that the potential for this one to blow up is very high

(04-01-2016, 01:17 PM)BlueKelah Wrote: Usually a good business, especially one in F&B with products selling well, should be able to grow organically without taking on too much debt. Bond issue / warrants issue / rights issue, all these are very rare in honest and solid companies.

CY09 gotta agree with you on this one, there is enough evidence that the potential for this one to blow up is very high

Unless Tingyi (aka Master Kong) and Huiyuan are deemed to be inferior outfits, the point that honest and solid companies do not rely much on debt is not correct.

As at 30 June 2015, gross gearing of Tingyi was 61%. That of Huiyuan was 49%.

Sino Grandness is not highly geared, at 50% as at 30 Sep 2015. 

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Tingyi  

.............................US$ m
PPE.........................5,838
Lease prepayments.......742
Intangible assets............27

Cash........................1,295

Borrowings................2,528

Total equity..............4,131

Gross gearing...........61%

Huiyuan

.............................RMB m
PPE..........................6,214
Land use rights.............961
Intangible..................4,173

Cash...........................896

Borrowings.................3,900
Convertible bonds........1,025

Total equity..............10,503

Gross gearing............49%

(04-01-2016, 03:56 PM)portuser Wrote:

(04-01-2016, 01:17 PM)BlueKelah Wrote: Usually a good business, especially one in F&B with products selling well, should be able to grow organically without taking on too much debt. Bond issue / warrants issue / rights issue, all these are very rare in honest and solid companies.

CY09 gotta agree with you on this one, there is enough evidence that the potential for this one to blow up is very high

Unless Tingyi (aka Master Kong) and Huiyuan are deemed to be inferior outfits, the point that honest and solid companies do not rely much on debt is not correct.

As at 30 June 2015, gross gearing of Tingyi was 61%. That of Huiyuan was 49%.

Sino Grandness is not highly geared, at 50% as at 30 Sep 2015. 

-----------------------------------------------------------------------------------------------------------------------
Tingyi  

.............................US$ m
PPE.........................5,838
Lease prepayments.......742
Intangible assets............27

Cash........................1,295

Borrowings................2,528

Total equity..............4,131

Gross gearing...........61%

Huiyuan

.............................RMB m
PPE..........................6,214
Land use rights.............961
Intangible..................4,173

Cash...........................896

Borrowings.................3,900
Convertible bonds........1,025

Total equity..............10,503

Gross gearing............49%

More accurate if you strip out Hui Yuan's intangibles since there are high goodwill paid for companies previously owned by the chairman.

Strip out Hui yuan's goodwill for better comparison. Assets overstated by the payment for companies previously owned by chairman.

(04-01-2016, 04:34 PM)alex Wrote: Strip out Hui yuan's goodwill for better comparison. Assets overstated by the payment for companies previously owned by chairman.

Huiyuan's intangibles of RMB 4,173m includes the premium it paid in 2013 to acquire the orange concentrate business from its Chairman, Mr Zhu Sinli. 

Gross gearing is the ratio of debt to total equity.

If intangibles were excluded, as you have suggested, Huiyuan's equity would drop to RMB 6,330m, and gross gearing would be a whopping 78%, instead of 49%.

The orange concentrate business was valued at HK$ 4.9 billion for the purpose of the deal. In 2012, Huiyuan bought orange concentrate amounting to HK$1.5 billion from Mr Zhu for bottling.

As production of loquat concentrate is being undertaken by Garden Fresh itself, there is no interested party transaction as what Huiyuan experienced before 2013.  

Yes, in my opinion Hui Yuan's gross gearing should be much higher compared to SG. But, thanks for the clarifications.

With regards to bluekelah comment: F&B companies can grow organically without taking on too much debt. Seems that you live in your dream? Which company actually managed to do that. Can you grow your own wealth, buy a few houses without taking on much debt? Not sure about you, but i can't grow organically to have few houses without loans.

All F&B companies will need to have their own plants. Maybe in China, government give them for free in your dream?

(05-01-2016, 10:59 AM)alex Wrote: Yes, in my opinion Hui Yuan's gross gearing should be much higher compared to SG. But, thanks for the clarifications.

With regards to bluekelah comment: F&B companies can grow organically without taking on too much debt. Seems that you live in your dream? Which company actually managed to do that. Can you grow your own wealth, buy a few houses without taking on much debt? Not sure about you, but i can't grow organically to have few houses without loans.

All F&B companies will need to have their own plants. Maybe in China, government give them for free in your dream?

cost of capital in china is very low.

(06-01-2016, 12:06 AM)BlueDogMeow Wrote: cost of capital in china is very low.

Cost of capital in China is very low? This is not as observed with many China-based companies.

The effective interest rate for RMB loan, is the highest among EUR, SGD, USD, and HKD, at about 4-6%, for YZJ

CMP has re-financed their RMB loan, to reduce its cost of capital.

The statement is misleading, at best

(not vested)