Sarine Technologies

[robert]

Nick,

Are you still vested in this counter?

[Nick]

Nick,

Are you still vested in this counter?

Nope. Divested a few months ago.

[robert]

What is the right price to re-enter?

[Stephen]

How will simulated diamonds affect sarine?

They are basixally the same compound but flawless

[Boon]

What is the right price to re-enter?

Revenue (USD million):
FY2010 = 45.663
FY2011 = 57.803 ( + 26.5% y-o-y)
FY2012 = 63.750 ( + 10.3% y-o-y)
FY2013 = 76.369 ( + 19.8% y-o-y)
FY2014 = 87.770 ( + 14.9% y-o-y)
1Q2014 =24.372
2Q2014 =24.716
3Q2014 =20.362
4Q2014 =18.320
1Q2015 =12.156

NPAT (USD million):
FY2010 = 11.111
FY2011 = 17.366 ( + 56.3% y-o-y)
FY2012 = 20.755 ( + 19.5% y-o-y) ; growth-rate down y-o-y
FY2013 = 23.888 ( + 15.1% y-o-y) ; growth-rate down y-o-y
FY2014 = 27.230 ( + 14.0% y-o-y) ; growth-rate down y-o-y
1Q2014 = 9.079
2Q2014 = 8.568
3Q2014 = 5.691
4Q2014 = 3.892
1Q2015 = 0.871

GPM = Gross Profit Margin:
FY2010 = 64%
FY2011 = 66%
FY2012 = 68%
FY2013 = 71%
FY2014 = 70%
1Q2014 =73%
2Q2014 =72%
3Q2014 =70%
4Q2014 =67%
1Q2015 =66%

NPM = Net Profit Margin:
FY2010 = 24%
FY2011 = 30%
FY2012 = 32%
FY2013 = 31%
FY2014 = 31%
1Q2014 =37%
2Q2014 =34%
3Q2014 =28%
4Q2014 =21%
1Q2015 = 7%

EPS (USD cent):
FY2010 = 3.30
FY2011 = 5.12 ( + 55.1% y-o-y)
FY2012 = 6.03 ( + 17.8% y-o-y) ; growth-rate down y-o-y
FY2013 = 6.87 ( + 13.9% y-o-y) ; growth-rate down y-o-y
FY2014 = 7.70 ( + 12.1% y-o-y) ; growth-rate down y-o-y
1Q2014 =2.62
2Q2014 =2.46
3Q2014 =1.63
4Q2014 =1.12
1Q2015 =0.25

DPS (USD cent):
FY2010 = 1.60
FY2011 = 2.60 ( + 62.5% y-o-y)
FY2012 = 4.50 ( + 73.1% y-o-y)
FY2013 = 6.00 ( + 33.3% y-o-y)
FY2014 = 5.00 ( - 16.7% y-o-y)
FY2015 = ????

Comments:
1) 1Q2015 result was a surprise (worse than expectation) to many, I would guess – probably including the management themselves.
2) NPAT, GPM, NPM and EPS have been declining consecutively for the last 5 quarters - a worrying trend indeed……………….
3) It appears to me that Sarine has and still maintain that technological competitive advantage over its competitors – but until the macro environment in which it operates improved quickly, share price would likely to be under further downward pressure…………
4) Sarine needs to make USD 17.5 million a year to support a DPS of USD 5 cents. As at 31st March 2015, it has USD 47.3 million in cash and bank deposit. If things do not improve quickly for the remaining quarters of the year - it would seem highly unlikely that it could earn enough in FY2015 to cover a DPS of USD 5 cents – of course, it could draw on its cash reserve to maintain such level of DPS payout, had the management decided to do so.
5) It has been the intention of the management to pay out a dividend of USD 2.5 cents semi-annually – it would be interesting to see if this could be delivered come the 2Q2015/1H2015 results announcement in August – again, failure to do so would likely subject the share price to further downward pressure, IMO…………


(vested – with profits only)

[Boon]

Credit squeeze, De Beers’ new sales rules may reshape diamond market

By New York Times | 16 May, 2015

By Jack Ewing

Diamonds and bank regulation would not, at first glance, seem to have much to do with each other. But under pressure from government overseers, banks worldwide have become more careful about lending to the murky diamond industry. The resulting squeeze on credit is creating upheaval in the market, with far-reaching consequences for gem wholesalers, as well as the companies that dig diamo ..

Read more at:
http://economictimes.indiatimes.com/arti...aign=cppst

[Boon]

How will simulated diamonds affect sarine?

They are basixally the same compound but flawless

Here is an opinion

Opinion - The good news about lab-grown diamonds
http://www.ehudlaniado.com/home/index.ph...n-diamonds

[Jacmar]

5) It has been the intention of the management to pay out a dividend of USD 2.5 cents semi-annually – it would be interesting to see if this could be delivered come the 2Q2015/1H2015 results announcement in August – again, failure to do so would likely subject the share price to further downward pressure, IMO…………

During the AGM, the CEO still confirmed that they are sticking to the div policy. So you can expect the 2.5 cents in Aug even if it may mean digging into the reserves. What to look out for in Aug is will there be a change in the policy for future. He seem confident to indicate no change as he thinks the De Beers saga will be back to normal and cannot go on.

[Boon]

Diamond Producers Form Group to Fight Synthetics

Miners push to increase consumer confidence in product

By SCOTT PATTERSON
Updated May 27, 2015 3:12 p.m. ET

A group of diamond miners is banding together to market its product and counter threats such as the expansion of synthetic stones.

The group, called the Diamond Producers Association, is led by miners such as De Beers Group, Alrosa Group, Petra Diamonds Ltd. and Rio Tinto PLC.......................

http://www.wsj.com/articles/diamond-prod...1432743731

(not vested - divested)

[Stephen]

How will simulated diamonds affect sarine?

They are basixally the same compound but flawless

Here is an opinion

Opinion - The good news about lab-grown diamonds
http://www.ehudlaniado.com/home/index.ph...n-diamonds

Thanks Boon but i cant find the answer to my question in that article.

This question of simulated diamonds is a bugbear to me and for this single reason i avoid it...