Sino Grandness

This article is published in Biz Times today.



http://www.businesstimes.com.sg/companie...resh-in-hk



The 63.96% ownership in Garden Fresh after IPO is very high. I thought in the Feb EGM circular, it was something like 50+%. How is the % arrived at?

(13-04-2016, 12:50 PM)specuvestor Wrote: Hi portuser

The capacity for the Sichuan factory should be for canned food, which I think has a very different process from PET bottled drinks

The Sichuan factory was converted for juice production, I believe in 2012, because the cost of transporting canned vegetables to faraway ports for export to Europe was too high. 

Boon has came across an environmental impact report dated April 2014 on conversion of the factory and is wondering why the project cost as stated in the report was a mere RMB 21m for 150,000 tonnes of juice production capacity.

(13-04-2016, 01:12 PM)portuser Wrote:

(13-04-2016, 12:50 PM)specuvestor Wrote: Hi portuser

The capacity for the Sichuan factory should be for canned food, which I think has a very different process from PET bottled drinks

The Sichuan factory was converted for juice production, I believe in 2012, because the cost of transporting canned vegetables to faraway ports for export to Europe was too high. 

Boon has came across an environmental impact report dated April 2014 on conversion of the factory and is wondering why the project cost as stated in the report was a mere RMB 21m for 150,000 tonnes of juice production capacity.

The Sichuan production plant in Qionglai, Chengdu was originally built and owned by Grandness Sichuan to produce canned food for overseas market.
 
According to the environment report: Grandness Sichuan had ceased canned food production at its Sichuan plant, as it could no longer compete in the overseas market, and Garden Fresh Sichuan had leased the plant from Grandness Sichuan and intended to convert it into a juice production plant.  
 
The Sichuan lease (and also the Anhui lease) could be found on page 183 and 184 of the Application Proof.
 
The current Sichuan juice production capacity could be found on page 142 and 143 of the Application Proof.
 
Page 142 of Application Proof:
As of the Latest Practicable Date, we owned two self-production plants to produce products packaged in PET bottles. One of these production plants is located in Qionglai, Chengdu, Sichuan Province at the premises that we lease from Grandness Sichuan. Our Sichuan production plant houses two production lines, including a loquat puree processing line and a PET high-temperature filling line.
 
Page 143 of Application Proof:
Existing production capacity of Garden Fresh Sichuan
= one loquat puree processing line (5,000 tonnes annual production capacity)
= one PET high temperature filling line ( 90,000 tonnes annual production capacity
__________________________________________________________________________________
 
In both Sichuan and Anhui, Garden Fresh leases its production plants from Grandness, hence the capital cost of the factory building should be borne by Grandness only, Garden Fresh only have to pay for its production equipment.
 
Even if RMB 21 m (as stated in the environment report) can only buy one PET high temperature filling line (of 90,000 tonnes and not 150,000 tonnes ) for its Sichuan plant, the RMB 300m needed for the 240,000 tonnes capacity at Anhui still looks relatively way too high…………………………
______________________________________________________________________________________________ 

Boon

You may want to ask Sino Grandness to clarify either by writing to them or attending the AGM on 25 April.

The RMB 21m project cost may not be correct.

Page 2 of application proof shows RMB 4,573 as the average price of a tonne of juice. Revenue from the 90,000-tonne line is therefore RMB 411m. With a net margin of 17%, profit from this line will be RMB 69.8m, three times the project cost.......

New annoucement from Sino Grandness. Convertible loan from Soleado

Money forever not enough.....

http://infopub.sgx.com/FileOpen/Sino%20G...eID=398953

For US$20m they will go through EGM and personal guarantees. Now TTA will do the due diligence

If this loan go through they will be able to pay SB1

(13-04-2016, 11:15 PM)specuvestor Wrote: For US$20m they will go through EGM and personal guarantees. Now TTA will do the due diligence

If this loan go through they will be able to pay SB1

May I assume that there will be vendor sale for Garden Fresh IPO?
If so, would it be enough for SG to pay for SB1 with the IPO proceed? 
Unless SG is not confident in launching the IPO in time for the Vendor sale proceed to pay for the SB1?

Definitely vendor sale to meet the SB1 and maybe SB2 payments. If they have to get this loan my guess is IPO not happening before 31 May in time for SB1

These are very specific cashflow catalysts. Otherwise I'm wrong. IMHO opinion it will be most interesting if this synthetic CB fails

(13-04-2016, 11:15 PM)specuvestor Wrote: For US$20m they will go through EGM and personal guarantees. Now TTA will do the due diligence

If this loan go through they will be able to pay SB1

Hi Mr. specuvestor,

I didn't go into detail of the debate between you, crubs, and portuser on the matter previously, due to other commitments, obviously. I briefly read crubs and portuser part of story now.

Yes, Sino investment, is relatively small to TTA, thus a formal DD is not there. With the high profile of the investment, and the following TTA commitments, it is inconceivable for a "NO due diligence" of TTA on Sino. As portuser has highlighted, as outsider, no way we will know the detail now. We can doubt on depth of the DD, or the focus of the DD due to each individual's opinion, but very unlikely No DD.

May I suggest that let's avoid using "No DD" or similar statement in future posts? Let's give Sino, the benefit of doubt. What do you think?

Regards
Moderator/CF