China Essence

Institutions rather sell stocks at 99% loss rather than explain why they hold bankrupt or unlisted stocks. It is one of the institutional imperative and one reason for mispricing, though for CESS case I'm not sure it is being mispriced much.

(12-10-2012, 12:07 AM)Underdogger Wrote: Sanlam has 36.7 million shares. It has sold off only 0.642 million or 1.75%. Still a long way to go in its selling…
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Where are these figures from? I am somewhat interested in this, since I have been wondering on the motives of sellers as much as buyers lately. Beginning Augusth 16th, almost twelve million shares have been traded (which doesn't sound that impressive in dollars, though).

Institutions, especially commercial institutions such as mutual funds, have huge irrational bankrupcy averting bias. And on top of that, mutual fund managers don't get to decide their exit timing - it's their clients who decide when to pull the plug.

If the seller was indeed Sanlam, I wouldn't be too worried. But there is a gap of over eleven million shares in my numbers and Underdogger's, as the total volume for the last two months is after all 11,9 million (and possibly some private trades, I am not too familiar with Singaporean statistics).

Everyone wants to know who are the buyers .....

Sanlem sold off for the 3rd time.....I think there is a lot more to come... price may drop further....

(14-03-2012, 05:49 PM)hkl Wrote: From AR2011 "Each spring, the farmers sow a new crop, which will be harvested in August. There is only one harvest each year in Northeast China."

Reminds me of Anchun International. Took just 1 bad drought to sink the earnings of the company. How reliable is the potato harvest each year in Northeast China?

Can the company finally break even this year ?

Seem like a make/break investment on potato:

One harvest season, one agricultural product (potato), one harvest region (NE China)

(01-11-2012, 12:29 PM)dzwm87 Wrote: Seem like a make/break investment on potato:

One harvest season, one agricultural product (potato), one harvest region (NE China)

The company might have already lost its preeminent position in potato starch manufacturing .... Some of its competitors would probably have stepped up production to meet demand when essence is too cash strapped to take advantage of market demand .....

With its huge overhanging debt issue , can it make it this year is a big question ?

(01-11-2012, 11:59 AM)Curiousparty Wrote: Can the company finally break even this year ?

impossible

(01-11-2012, 12:46 PM)Underdogger Wrote: The company might have already lost its preeminent position in potato starch manufacturing .... Some of its competitors would probably have stepped up production to meet demand when essence is too cash strapped to take advantage of market demand .....

With its huge overhanging debt issue , can it make it this year is a big question ?

If the company is still dominant in China starch market, the state and banks will not let it go under. Nevertheless this is of little comfort to shareholders who will continue to see their value erodes.

Don't think it is the dragon head anymore ... Just look at that utilisation capacity ....so low

(01-11-2012, 01:53 PM)specuvestor Wrote:

(01-11-2012, 11:59 AM)Curiousparty Wrote: Can the company finally break even this year ?

impossible

(01-11-2012, 12:46 PM)Underdogger Wrote: The company might have already lost its preeminent position in potato starch manufacturing .... Some of its competitors would probably have stepped up production to meet demand when essence is too cash strapped to take advantage of market demand .....

With its huge overhanging debt issue , can it make it this year is a big question ?

If the company is still dominant in China starch market, the state and banks will not let it go under. Nevertheless this is of little comfort to shareholders who will continue to see their value erodes.

Utilisation is not indicative of market share. His competitors may be running low utilisation as well. IIRC CESS capacity jumped 4 folds over past 5 years. it is not a matter of supply, but a matter of whether demand can jump as much.

Based on their working capital, they will hardly be able to run at 50% NEW utilisation rate if no external funding. The incentive for the chairman to embark on such reckless, mathematically improbable project is intriguing. I can only guess that there is political points from the potato farmers and municipals.