Sino Grandness

[Adagio]

Let's look at Newman9’s other claims. How valid are they?

(1) One claim is that the 3 OEMs that Garden Fresh have max capacity of 13,000 tonnes only and cannot supply 210,000 tonnes to Garden Fresh.

The company, in its 23 Oct business update, has refuted this – it has 6 OEMs with combined capacity of 600,000 tonnes:

“……. the Group has gradually expanded its numbers of external suppliers and presently has business relationships with 6 external suppliers with combined maximum production capacity of more than 600,000 tons per annum.”

(2) Newman9 himself has inflated CB liabilities by RMB 62m – it claims that the liabilities are RMB 723m, but the actual is RMB 661m.

Newman9 was obviously not aware that holders of 2012 CBs are entitled to ask for accelerated redemption when holders of 2011 CBs get their money.

His 4 Sep report would have been more complete and scary if it had stated that Garden Fresh faces a severe risk of all bondholders asking for RMB 660m in Oct 2014.

Other considerations:

(1) Why did Newman9 not provide evidence to cast doubt on the large amounts of taxes Sino Grandness claimed it has paid (RMB 111 in 2013 and RMB 139m in 2013)? Other short-sellers obtained lists of top tax payers from the websites of local governments to prove the point that the targeted companies had lied about the amounts of taxes they paid. This is far more efficient and convincing than staking which are not verifiable.

(2) Newman9 has brought out a good point – Nielsen and Eurominitor have not come across Garden Fresh juice in their surveys. The reply by Sino Grandness is not quite convincing:

Mr Huang shared, “I was asked recently why is loquat juice not being mentioned or Garden Fresh brand not being highlighted in some other market research reports. The reason is because loquat juice is a relatively new juice segment within the fruit juice market in China as Garden Fresh was the first brand to actively promote loquat juice in 2010. And since it only accounts for less than 2% of the market, it is possible that some research companies may have missed out certain newer or smaller sub-segment juices when they conduct their researches based on previous methodologies.”

However, high margins and super-high sales growth of Garden Fresh are not new issues. At various meetings, these have been asked as they are obvious matter that any investors will want to know the answer. Did IPO managers and Thai investors not ask these?

[newborn1000]

Well according to this, Sun Hung Kai Investment Services Limited (as Manager)

http://infopub.sgx.com/FileOpen/Sino_Gra...eID=317470

And according to this, eratat took bonds from the same

Both the bonds and warrants were issued to Sun Hung Kai Investment Services Ltd, which is a principal subsidiary of HKSE-listed Sun Hung Kai & Co Ltd.

http://www.investorcentral.org/text_show...xtid=19238



I dont have much of an opinion, just sharing some information

[PGL]

Time for newman9 to emerge from the shadows and reveal:
1. his credentials
2.the size of his short sales and whether and ,if so, at what price he has started to close his short positions?
3.whether he still maintains his "Short" recommendation at .49 sgd.cents.
4.whether Sino Grandness Buy back scheme has yet started to kick in?
PGL(vested)

[chinafarmer]

Well according to this, Sun Hung Kai Investment Services Limited (as Manager)

http://infopub.sgx.com/FileOpen/Sino_Gra...eID=317470

And according to this, eratat took bonds from the same

Both the bonds and warrants were issued to Sun Hung Kai Investment Services Ltd, which is a principal subsidiary of HKSE-listed Sun Hung Kai & Co Ltd.

http://www.investorcentral.org/text_show...xtid=19238



I dont have much of an opinion, just sharing some information

I made a mistake in my first post. Sun Hung Kai was involved in a non-convertible bond and warrant issue for Eratat not convertible bonds.

The board of directors (“Board”) of Eratat Lifestyle Limited (“Company”, and together with its subsidiaries, the “Group”) refers to the announcement dated 3 May 2013 (“Announcement”) and wishes to announce that it has on 20 June 2013 entered into a bond and warrant subscription agreement (“Subscription Agreement”) with SHK Securities (Nominees) Limited (“Subscriber”), a subsidiary of Sun Hung Kai & Co. Limited. Pursuant to the Subscription Agreement, the Company proposes to issue to the Subscriber and/or its nominees, in consideration for an aggregate subscription price of RMB100,500,000 (“Subscription Price”), up to (i) RMB134,000,000 in aggregate principal amount of redeemable 12.5% per annum non-convertible bonds (“Bonds”), and (ii) 82,500,000 warrants (“Warrants”), each warrant entitling the warrantholder to subscribe for one (1) new share in the capital of the Company (“Shares”) pursuant to a deed poll to be executed by the Company (“Deed Poll”) upon completion of the issue of the Warrants, in accordance with the terms and subject to the terms and conditions of the Subscription Agreement (“Proposed Bond and Warrant Issue”). The Bonds and the Warrants will not be listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”).

[greengiraffe]

looking at the rush of activities / threads on Sino Madness, I can't help but to equate it to China Minzhong.

When the dust settles, all these threads and debates will be history.

Not being wet blanket but should real equity investments be so exciting... real equity investments should be about focusing on the business and running it not banking on a spin-off and paying off convertibles.

If real business is highly cash generative, then it should not be prone to "attacks". Even with spin-offs, Sino will become an investment holding company that typically trades at discount ratings.

confused Still
Not Vested
GG

[chinafarmer]

Can one provide a chronological order of all the fund raising exercises and the respective amounts from IPO till the Thai placement, inclusive of both milestones?

What is the total amount raised to date? Does the loquat appear to be more of a cash sucking monster than a cash generating machine?

[2V.]

Let's look at Newman9’s other claims. How valid are they?

(1) One claim is that the 3 OEMs that Garden Fresh have max capacity of 13,000 tonnes only and cannot supply 210,000 tonnes to Garden Fresh.

The company, in its 23 Oct business update, has refuted this – it has 6 OEMs with combined capacity of 600,000 tonnes:

“……. the Group has gradually expanded its numbers of external suppliers and presently has business relationships with 6 external suppliers with combined maximum production capacity of more than 600,000 tons per annum.”

(2) Newman9 himself has inflated CB liabilities by RMB 62m – it claims that the liabilities are RMB 723m, but the actual is RMB 661m.

Newman9 was obviously not aware that holders of 2012 CBs are entitled to ask for accelerated redemption when holders of 2011 CBs get their money.

His 4 Sep report would have been more complete and scary if it had stated that Garden Fresh faces a severe risk of all bondholders asking for RMB 660m in Oct 2014.

Other considerations:

(1) Why did Newman9 not provide evidence to cast doubt on the large amounts of taxes Sino Grandness claimed it has paid (RMB 111 in 2013 and RMB 139m in 2013)? Other short-sellers obtained lists of top tax payers from the websites of local governments to prove the point that the targeted companies had lied about the amounts of taxes they paid. This is far more efficient and convincing than staking which are not verifiable.

(2) Newman9 has brought out a good point – Nielsen and Eurominitor have not come across Garden Fresh juice in their surveys. The reply by Sino Grandness is not quite convincing:

Mr Huang shared, “I was asked recently why is loquat juice not being mentioned or Garden Fresh brand not being highlighted in some other market research reports. The reason is because loquat juice is a relatively new juice segment within the fruit juice market in China as Garden Fresh was the first brand to actively promote loquat juice in 2010. And since it only accounts for less than 2% of the market, it is possible that some research companies may have missed out certain newer or smaller sub-segment juices when they conduct their researches based on previous methodologies.”

However, high margins and super-high sales growth of Garden Fresh are not new issues. At various meetings, these have been asked as they are obvious matter that any investors will want to know the answer. Did IPO managers and Thai investors not ask these?

If I am reviewing the HK IPO, will be keen to do more due diligence on the 6 OEMs that provide 600,000 ton capacity per annum..

These OEMs should have grow aggressively as well and should be reflected in their financials

[Dividend Hermit]

looking at the rush of activities / threads on Sino Madness, I can't help but to equate it to China Minzhong.

When the dust settles, all these threads and debates will be history.

Not being wet blanket but should real equity investments be so exciting... real equity investments should be about focusing on the business and running it not banking on a spin-off and paying off convertibles.

If real business is highly cash generative, then it should not be prone to "attacks". Even with spin-offs, Sino will become an investment holding company that typically trades at discount ratings.

confused Still
Not Vested
GG

I think some treat Sino as "special situation" investment pending values to be unlocked via Garden IPO.

[simpleman]

I am a simple man, and I chose “Simpleman” as my username.

I look for simple facts and make conclusions. Therefore I wrote the following on 26 Oct:

“Just wonder what are the factors Wellcome, the largest supermarket chains in Hong Kong, and 7-Eleven, the largest convenience store chain, took into account in putting loquat juice on their shelves? Did Sino Grandness succeed in conning them?

For the recent 4 years, Sino Grandness has been stating that its loquat juice has been on sale at Careffour, Walmart and 7-Eleven. The shortseller has not denied this. But if loquat juice is not selling well, can it remain on their shelves”

Now pl refer to:

http://www.nextinsight.net/index.php/sto...h-briefing

Do you think that Wellcome, 7-eleven and Carrefour would allow misrepresentation?

[chinafarmer]

I am a simple man, and I chose “Simpleman” as my username.

I look for simple facts and make conclusions. Therefore I wrote the following on 26 Oct:

“Just wonder what are the factors Wellcome, the largest supermarket chains in Hong Kong, and 7-Eleven, the largest convenience store chain, took into account in putting loquat juice on their shelves? Did Sino Grandness succeed in conning them?

For the recent 4 years, Sino Grandness has been stating that its loquat juice has been on sale at Careffour, Walmart and 7-Eleven. The shortseller has not denied this. But if loquat juice is not selling well, can it remain on their shelves”

Now pl refer to:

http://www.nextinsight.net/index.php/sto...h-briefing

Do you think that Wellcome, 7-eleven and Carrefour would allow misrepresentation?

I think shortseller did not deny fact that loquat products are found in the above listed stores. In fact short seller has taken photos of the products found in some stores with shelf placings etc. Thus shortseller has not claimed that the above stores have allowed misrepresentation.