Sino Grandness

Specuvestor

Just to share.

You had determined RMB 5.75m as the interest for 60 days, for 25% annual interest rate, on RMB 140,200,000 ( = 52,575,000 + 87,625,000) as follows:

RMB 140,200,000 * 25% * (60 days /365 days)

The bond agreement stipulates the following for calculating the interest (see page 88 of 2014 annual report):

RMB 140,200,000 * (1 + 25%) ^ 0.16438 – RMB 140,200,000 = RMB 5.24m;

where 0.16438 = 60 days /365 days.

RMB convention is actual / actual so should be 366 day count this year

And no i didnt use compound method but simple interest for <12 months money market method; but i think its right to stipulate it as compound interest as the interest rate is high.

Thanks for clarifying

Compound interest is applicable to 2011, as well as 2012, Bonds.

Page 88 of 2014 annual report stipulates that the redemption amount for 2011 Bonds as:

Outstanding principal Amount multipled by 1.25 ^ x 

Where  x = number of calendar days from and including issue date to, but excluding Redemption Date, divided by 365
 
Every year, whether it is leap or common, is taken to have 365 days.

For the 25% annual interest rate, the daily interest rate is 0.06114%. Compounding this will give rise to an interest rate of 25% over 365 days.

The 60-day interest rate of 4.1096% (= 25% * [60 days / 365 days]) translates into 27.33% over a 360-day period with compounding, exceeding the 25% annual rate. 

(28-03-2016, 11:03 PM)portuser Wrote: Compound interest is applicable to 2011, as well as 2012, Bonds.

Page 88 of 2014 annual report stipulates that the redemption amount for 2011 Bonds as:

Outstanding principal Amount multipled by 1.25 ^ x 

Where  x = number of calendar days from and including issue date to, but excluding Redemption Date, divided by 365
 
Every year, whether it is leap or common, is taken to have 365 days.

For the 25% annual interest rate, the daily interest rate is 0.06114%. Compounding this will give rise to an interest rate of 25% over 365 days.

The 60-day interest rate of 4.1096% (= 25% * [60 days / 365 days]) translates into 27.33% over a 360-day period with compounding, exceeding the 25% annual rate. 

Hi Portuser,

I have two questions..

1 ) What is this 1.25^x? What does it mean?
2)  If you do not mind, can you go through the steps to  show how the 13.2m rmb (around 2.8m Sgd) interest was waived? A bit blur.

Am pleased to note that Huang managed to get this concession from Bondholders.

cheers
Oldman9

Oldman9

1.25^x is familiar to us when x is an integer.

For example, 1.25 ^2 is simply 1.25 times 1.25, or 1.5625. So 2-year compound interest rate is 56.25% for annual interest rate of 25%.  

What is the compound interest rate for 2 years and 100 days?

It will be incorrect to apportion the 25% annual interest rate, and say that 6.85 % (=25% * [100/365]) is the interest rate for 100 days. 

The 100-day interest rate should be determined as follows:

Step one, divide 100 by 365 to get 0.27397.

Step two, use a scientific calculator to find the value of 1.25 ^ 0.27397, which is 1.06304.

Step three, subtract 1 from 1.06304 to get the 100-day interest rate of 6.30%.

The interest rate for 2 years and 100 days is therefore 66.1% (= 1.25 * 1.25 * 1.063 -1).

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On 1 March 2016, the aggregate redemption amount of 2011 and 2012 Bonds was RMB 734.066m. (Two months earlier, the amount was RMB 703.125m).

40% of 2011 Bonds and 2012 Bonds, amounting to RMB 293.626m, were restructured into SB1 and SB2 on that day. As RMB 280.365m was set as the aggregate value of SB1 and SB2, RMB 13.2m ( = 293.626m - 280.365m) was waived in the restructuring exercise.

Money market yield is not incorrect. We are just using different conventions to estimate
http://www.investopedia.com/exam-guide/c...-yield.asp

What is your base in calculating 293.626m? Is it principal or principal plus outstanding interest? I'm asking cause it seems that you disagree with the RMB5.75m / RMB3.59m estimation

RMB 293.626m is the principal amounts plus accrued interests. The principal amounts, as you know, are only RMB 140.2m. 

In the table in post 1457 (reproduced below), the principal amount of RMB 32.2m for 40% of 2011 Bonds grew into RMB 85.3m:
  

.............................................RMB m as at 1 March 2016

...................Principal amount......SB1.....SB2.....SB1 + SB2....interest waived 
.................+ accrued interest 

40% of  
2011 Bonds....................85.3......28.5.....50.3...............78.8.....................6.5

40% of 
2012 Bonds...................208.3.....73.3...128.3..............201.6.....................6.7


The following steps were taken, in accordance with 2011 Bond agreement, to arrive at RMB 85.3m.

(1) 2011 Bonds (issued on 19 Oct 2011) had been outstanding for 1,594 days as at 1 March 2016.

(2) 1594 / 365 is 4.367

(3) 1.25 ^ 4.367 = 2.6497

(4) RMB 32.2m * 2.6497 = RMB 85.32m

Sino Grandness performing well, closed at 70 cents.

(02-03-2016, 04:05 PM)alex Wrote: Hi all, Can we at least try to summarize the doubts for SG, followed by some opinions? Else, i think the topics are off and bias kicks in at all levels of discussions.

1) Fake business outright - Big PONZI scheme
2) Poor management and transparency
3) Fake sales
4) Poor cash management

Please kindly help to contribute if possible so that this thread can get back to good sharing/discussions.

Alex,


The nextinsight article dated 17th March 2015 (a year ago)  "Whatever happened to its share price" is a good starting point.
the article mentioned that "Many investors are spooked as they are of the view that Sino Grandness will not be able pay off the bondholders" >> but now the bonds have been restructured with favorable terms - Sino Grandness has 85% of Garden Fresh instead of 77% and not only that, the 40% of the bond are to be repaid in two stages with the larger 2nd portion to be repaid one year from now at 10% interest rate.


Gamble :-  "Money from the bonds have enabled Garden Fresh to grow its sales strongly, from RMB 180m in 2010 to RMB 1,877m in 2014, an amazing 9-fold increase in 5 years." .
-> In 2015, sales jumped to 2319m Rmb


Beyond China - "In late 2014, Wellcome in Hong Kong (with 200 supermarkets) started selling the loquat juice, By the end of March 15, Garden Fresh beverages will be progressively rolled out to 7-Eleven’s 900 convenience stores in the territory..." - >> now Park N Shop as well as Taste are also selling GF juices.


Progress of Ipo :- "Mr Huang has expressed confidence in submitting the required forms to the exchange before the bonds expire. " ->> There were delays as IPO professionals had to be thorough in their due diligence. The approval by shareholders at the EGM on 23rd Feb and the restructuring of the Convertible Bonds on 1st March 2016 paves the way for IPO.

what they actually needs now is an IPO. Without any bias, from the current indications, it seems that an IPO is highly probable. I guess is uncertainty only lies in which exchange will it be listed. In HK or China or elsewhere? If things goes well, the answer will be made known soon. But the share price already have a wonderful run upwards. Those who got in when there are numerous doubters and doomsayers will be laughing to the bank now especially for those who bought at 20+ to 30+ cents, decision for them is whether to take profit or continue the ride. Any position from the current bullish price will require some homework lah. Cheerio