Sino Grandness

[specuvestor]

^^ yes as per noted in the bottom NB section of my post after I read the financial statements

Unlike the extension of the 2 CBs previously, this time round there is not even a maturity date and it has to be assumed. The time value of the option, which is a statistical estimate, will decline every quarter impacting the PnL based on an estimated terminal date. IMHO it's just an accounting number with little relevance anymore.

The status of the CB is important because in a credit event it defines the rights of the bond holder and debtor, from CDS calculation to Argentina sovereign bond. Legally it's in no man's land now 7-8 months post restructured maturity.

[Boon]

http://infopub.sgx.com/FileOpen/SGFIG%20...eID=391351
 
Page 5 of FY2015 results:
 
Deposit for non-current asset = RMB 570.777 million in 4Q2015
 
WOW !
 
Welcome back Specuvestor !
___________________________________________________________________________________________________________________________________

[Image: b4yrzs.jpg]


Deposit for non-current asset = RMB 570.777 million in 4Q2015
 
Is the deposit represents
 
1) a 10% prepayment of a 5,707 m purchase ? ; or
 
2) a 20% prepayment of a 2,853 m purchase ? ; or
 
3) a 25% prepayment of a 2,283 m purchase ? ; or
 
4) a 50% prepayment of a 1,141 m purchase ? ; or
 
5) a 75% prepayment of a  761 m purchase ? ; or 
 
6) a 100% prepayment of a 570 m purchase ?; or
 
7) others ?.
__________________________________________________________________________________________________________________________________
 
If it is 6), the payment terms look very generous.
 
If it is 6), the 570 m deposit represents 56% of total investment in PPE over the last 7 years amounting to 1,020 m => High ? 
_____________________________________________________________________________________________________

[eyesonme]

http://infopub.sgx.com/FileOpen/SGFIG%20...eID=391351
 
Page 5 of FY2015 results:
 
Deposit for non-current asset = RMB 570.777 million in 4Q2015
 
WOW !
 
Welcome back Specuvestor !
___________________________________________________________________________________________________________________________________

[Image: b4yrzs.jpg]


Deposit for non-current asset = RMB 570.777 million in 4Q2015
 
Is the deposit represents
 
1) a 10% prepayment of a 5,707 m purchase ? ; or
 
2) a 20% prepayment of a 2,853 m purchase ? ; or
 
3) a 25% prepayment of a 2,283 m purchase ? ; or
 
4) a 50% prepayment of a 1,141 m purchase ? ; or
 
5) a 75% prepayment of a  761 m purchase ? ; or 
 
6) a 100% prepayment of a 570 m purchase ?; or
 
7) others ?.
__________________________________________________________________________________________________________________________________
 
If it is 6), the payment terms look very generous.
 
If it is 6), the 570 m deposit represents 56% of total investment in PPE over the last 7 years amounting to 1,020 m => High ? 
_____________________________________________________________________________________________________

Below is the response I previously got when i checked with the IR:
1) PPE for production lines are tailored/customised, prepayment range between 60% to 80%
2) The deposit is for 
- Anhui - 2 low temperature beverage production lines, 
- Hubei - 2 canned beverage production lines, 
- Shanxi - 2 canned fruits production lines and 
- Shanxian - 2 canned fruits production lines.

[CY09]

Eyesonme, investor relations of sfig replied so fast? Results were out on Friday night right?

[eyesonme]

Eyesonme, investor relations of sfig replied so fast? Results were out on Friday night right?

CY09, yes results were out on Friday night. Emailed on Sat morning and got a response from Stephen on the same day evening.

[Lich]

Based on the result briefing on Friday, we would be having update from Sino Grandness on their convertible bond issue soon.

[Boon]

[Image: 2evqkna.jpg]


What is the difference between a “ballooning operating receivable” and a “capex spike” ?

__________________________________________________________________________________________________________________

[Oldman9]

Hi CY09 and Boon,

Okay, page 9 of the 3Q results announcement says "Non-cash interest costs relating to convertible bonds decreased from RMB67.4m in 9M2014 to and assumed an income position of RMB24.8m in 9M2015"

Wah how does non-interest cost assume an income position ? That means Garden Fresh borrow money still can earn money on interest ?

So according to your method, this is part of their on-going operation la, making money out of borrowing money.

Since you say your method is right, can your method of calculation explain this phenomenon ? and what is the logic behind it ?

Hi crubs,
 
Please refer to page 118 and 119 of AR2014
 
Can you explain why there was a need for an adjustment in FY2013.
 
Interest expense was adjusted from 19.102 m to 88.818m.
 
Changes in fair value of option derivatives in relation to convertible bonds had been adjusted from zero to 43.638 m.
 
This is relevant to your question, I believe.
___________________________________________________________________________________________________________________________________

Hi Mr Boon
Please do not ask unnecessary questions. The note in pg 118 already explains why adjustment was made.
The question now is why there was a 'positive' interest income of RMB 187m in 3Q 15.   
You have not answered Crubs question on making money out of borrowing money.

Ha-ha! 

If SG has the so called skill in "making money out of borrowing money", why don't they apply it in FY2013 ? Do you know what difference would it make?

Wondering why this skill emerged only after the expiry of both CB1 and CB2. 
__________________________________________________________________________________________________________________________________

Based on the result briefing on Friday, we would be having update from Sino Grandness on their convertible bond issue soon.

Hi  Lich

I dont know why the concern on convertible bond redemption. Worst comes to worst, Cb takes maximum stake of 23.4%.

cheers
Oldman9

[chan99]

Hi CY09 and Boon,

Okay, page 9 of the 3Q results announcement says "Non-cash interest costs relating to convertible bonds decreased from RMB67.4m in 9M2014 to and assumed an income position of RMB24.8m in 9M2015"

Wah how does non-interest cost assume an income position ? That means Garden Fresh borrow money still can earn money on interest ?

So according to your method, this is part of their on-going operation la, making money out of borrowing money.

Since you say your method is right, can your method of calculation explain this phenomenon ? and what is the logic behind it ?

Hi crubs,
 
Please refer to page 118 and 119 of AR2014
 
Can you explain why there was a need for an adjustment in FY2013.
 
Interest expense was adjusted from 19.102 m to 88.818m.
 
Changes in fair value of option derivatives in relation to convertible bonds had been adjusted from zero to 43.638 m.
 
This is relevant to your question, I believe.
___________________________________________________________________________________________________________________________________

Hi Mr Boon
Please do not ask unnecessary questions. The note in pg 118 already explains why adjustment was made.
The question now is why there was a 'positive' interest income of RMB 187m in 3Q 15.   
You have not answered Crubs question on making money out of borrowing money.

Ha-ha! 

If SG has the so called skill in "making money out of borrowing money", why don't they apply it in FY2013 ? Do you know what difference would it make?

Wondering why this skill emerged only after the expiry of both CB1 and CB2. 
__________________________________________________________________________________________________________________________________

Based on the result briefing on Friday, we would be having update from Sino Grandness on their convertible bond issue soon.

Hi  Lich

I dont know why the concern on convertible bond redemption. Worst comes to worst, Cb takes maximum stake of 23.4%.

cheers
Oldman9

[portuser]

Sino Grandness indicated in its 2014 annual report that to fully redeem CBs, it was seeking US$50m (RMB 305.9m then) loans and might "reduce investment sums or postpone its capital investment plans in the new plant in Anhui Province...". 

But RMB 147m was spent on fixed assets in 2015, and another RMB 596m pre-paid as at end-2015 for works yet to start. 
 
Garden Fresh also spent heavily on A&P, going by Sino's overall A&P expenses of RMB 350m in 2015, up from RMB 200m in 2014 and RMB 60m in 2013.

May one surmise that Garden Fresh has been confident of being listed, and the priority is enhancing its investment merits rather than conserving cash for CB redemption? When Huiyuan launched its IPO in Feb 2007, and Dali Food in Nov 2015, they highlighted that all their products were manufactured in-house. 

Is Garden Fresh rushing to complete the Anhui factory to be self-sufficient? The combined capacity will then be 630,000 tonnes of juice in pet-bottles from three factories, with RMB 3,150m as revenue on full production. (2015 juice revenue was RMB 2,319m, with significant contributions from external factories). Garden Fresh is also installing two lines in the existing Hubei factory to produce juice in aluminium cans.   

Full CB redemption today will cost RMB 740m. Cash was a mere RMB 143m as at end-2015. 

Garden Fresh's valuation is RMB 5,955 m, based on 15 times* historical 2015 profit of RMB 397m**. 

Bondholders are entitled to 23.4% of Garden Fresh once listing approval is granted. Redeeming one percentage point costs RMB 32m (= RMB 740m divided by 23.4); but the implied value is RMB 59m, based on 15 times historical 2015 earnings.

Garden Fresh should redeem as much as possible. But bondholders will want to cling on to their collective 23.4% stake for the allure of Garden Fresh share price (if IPO materialises).



* In comparison, Dali Food was listed on the HK Stock Exchange last November on 17 times forward 2016 profit: 

http://www.financeasia.com/News/403567,dali-foods-ipo-takes-financial-sector-off-the-menu.aspx

Dali's 16.2 times forward 2016 profit corresponded to HK$ 5.00, which was the lowest of the offer price range. In the event, the offer price was fixed at HK$ 5.25, giving rise to a valuation of 17 times forward 2016 profit.


** Sino Grandness has proposed a dividend payout of RMB 12.1m (at RMB 0.018 per share), which is 10% of the profit canned products business.

Deducting RMB 121m from Sino's adjusted profit of RMB 518m gives rise RMB 397m as the adjusted profit of Garden Fresh.