Sino Grandness

[chinafarmer]

If Sino Grandness' profit and sales are a complete sham, for the past 4 years, Sino Grandness has paid for:
1. Numerous advertisements and TV commercials.
2. The building of new plants and capacity expansion.
3. Slotting fees to big carriers like Walmart, Careffour, over 300 distributors, and 200 000 retail points all over China; and now Wellcome and soon to be 7-11.
4. The administration fees of IPO listing in HKSE.
5. The analysts at Frost and Sullivan.
6. Buying back shares during price weakness, and not selling a single share.
7. Buying back 20% of outstanding CB.

All this while while not making profit? Or rather huge losses?

If this is true, I wonder if the big boss of Sino Grandness have anything left for himself?

Honest question. I do not think that there is 0 possibility of fraud. It just seems too elaborate of a scam, if they managed to pull it off.

Vested. High risk section of my portfolio.

Perhaps a good exercise would be to first come up with a chronological listing of all fundraising exercises the loquat has done from IPO till Thai placement, both events inclusive.

[Wildreamz]

weibo of Garden Fresh: http://www.weibo.com/p/1006062801416864/...4431879622
163K fans

weibo of Minute Maid (China): http://www.weibo.com/minutemaidjuice
63K fans

Doesn't necessary mean anything, but a good point of reference and source of information.

In fact, Garden Fresh's entry into Hong Kong Wellcome and 7-11 has already been reported on their weibo on 29th Sep, before their official announcement on SGX (16th Oct).

[shanrui_91]

If Sino Grandness' profit and sales are a complete sham, for the past 4 years, Sino Grandness has paid for:
1. Numerous advertisement and TV commercials.
2. The building of new plants and capacity expansion.
3. Slotting fees to big carriers like Walmart, Careffour, over 300 distributors, and 200 000 retail points all over China; and now Wellcome and soon to be 7-11.
4. The administration fees of IPO listing in HKSE.
5. The analysts at Frost and Sullivan.
6. Buying back shares during price weakness, and not selling a single share.
7. Buying back 20% of outstanding CB.

All this while while not making profit? Or rather huge losses?

If this is true, I wonder if the big boss of Sino Grandness have anything left for himself?

Honest question. I do not think that there is 0 possibility of fraud. It just seems too elaborate of a scam, if they managed to pull it off.

Vested. High risk section of my portfolio.

Loquat juice seems to be a legit product that has received favourable review.

However, the A&P expense as % of revenue is really low in a competitive market like China. To generate RMB 1.3 billion of sales with only RMB 58 million of A&P expense is really exceptional. Sino grandness is supposed to have spent quite a huge sum on advertising (they have advert on CCTV) and your usual slotting and promotion fee for modern trade.

The other player with very low A&P expense as % of revenue is Want Want, but that is because Want Want relies a lot more on the traditional trade.

(not vested or shorted)

[CY09]

Hi shanrui

What is want want A&p expense in absolute figure? It is more ideal to compare A &P of want want China operations against Sino. This is because advertising is more of a fixed cost nature

Not vested or shorted

[shanrui_91]

The listed co is Want Want China (151):

Sales: USD 3.8 billion
A&P: USD 112.8million
http://www.wantwant.com.cn/upload/Invest...55en24.PDF

Uni-President China (220):

Sales: RMB 23.3 billion
A&P : RMB 2.87 billion
http://www.uni-president.com.cn/download...064238.pdf
2/3 of UPC sales are in beverages.

Newman has covered this point in his report

[CityFarmer]

China farmer,

Supermarkets carry thousands of items on their limited shelf space. They are therefore very selective and they would not carry any items just to recieve listing fees, promotional fees etc.

Items that are not selling well for sometime will be taken off the shelves.

The fact that Carrefour and Walmart has been carrying Gardens Fresh for 4 years means that the juice must be selling well.

Again, if Garden Fresh is not popular in China, would Wellcome and the 7-Eleven chain in Hong Kong agree to sell the juice? Note that Shenzhen, where Sino Grandness is haadquartered, is near Hong Kong.

You addressed the wrong person. The person who replied to your question was edwin.

Admin or moderator please do something about this.

You have already clarified, so nothing more to be done by moderator/admin

Thanks

Regards
Moderator CF

[Behappyalways]

not vested

The issue of new shares(cost them around $2m out of $52m) meant the company could have use part of the proceeds to buy back some of the CB

Take a look at Huiyuan 1h2014 result and make comparison...see if Sino's 1h2014 makes sense.....

http://www.huiyuan.com.cn/upload/accesso...646155.pdf


huiyuan's juice segment is about 75% of total sales....which is around RMB1.5b. Sino's beverage sales is around RMB900m. So for every $2 of fruit juice(apple, orange...etc etc) by Huiyuan, Sino is able to sell $1 of loquat juice(assuming bulk of the sales are due to loquat)....does it make sense???? Didn't know loquat juice is so popular.....

Look at Huiyuan's leadership in 100% juice concentrate and 26% to 99% juice concentrate segment....where does Sino's product fits in? If they are in these 2 segments then something is wrong somewhere....because Sino's RMB900m sales does not fit in....maybe Sino's product could be in the below 25% segment....?????

I took a glance at Sino's annual report. There is no footnote on how they accounted sales. Do they account for sales when end buyers bought their product or when they deliver to shops (hence resulting in increasing receivables). ?????

These are a few questions in my mind.....

[chinafarmer]

Investors must bear in mind that the loquat did a 2 for 1 share split.

At 42cents it is actually 84 cents if we adjust to pre share split status.

[chinafarmer]

I took a glance at Sino's annual report. There was no footnote on how they accounted sales. Do they account for sales when end buyers bought their product or when they deliver to shops (hence resulting in increasing receivables). ?????

There are a few questions in my mind.....

Investors should ask the loquat what is the percentage of revenue or sales that was concluded at trade fairs. Press releases of loquat has highlighted astonishing sales figures at the conclusion of trade fairs.

[specuvestor]

Behappyalways the Huiyuan report is for 6 months not annual. But I agree with the premise that the sales prima facie seemed stretched as per the VIC report, even though the product is definitely there. The issue is volume.

If Sino Grandness' profit and sales are a complete sham, for the past 4 years, Sino Grandness has paid for:
1. Numerous advertisement and TV commercials.
2. The building of new plants and capacity expansion.
3. Slotting fees to big carriers like Walmart, Careffour, over 300 distributors, and 200 000 retail points all over China; and now Wellcome and soon to be 7-11.
4. The administration fees of IPO listing in HKSE.
5. The analysts at Frost and Sullivan.
6. Buying back shares during price weakness, and not selling a single share.
7. Buying back 20% of outstanding CB.

All this while while not making profit? Or rather huge losses?

If this is true, I wonder if the big boss of Sino Grandness have anything left for himself?

Honest question. I do not think that there is 0 possibility of fraud. It just seems too elaborate of a scam, if they managed to pull it off.

Vested. High risk section of my portfolio.

Loquat juice seems to be a legit product that has received favourable review.

However, the A&P expense as % of revenue is really low in a competitive market like China. To generate RMB 1.3 billion of sales with only RMB 58 million of A&P expense is really exceptional. Sino grandness is supposed to have spent quite a huge sum on advertising (they have advert on CCTV) and your usual slotting and promotion fee for modern trade.

The other player with very low A&P expense as % of revenue is Want Want, but that is because Want Want relies a lot more on the traditional trade.

(not vested or shorted)

Wildreamz it's hard to have a "complete" fraud if that's your point. It's a matter of degree... it's like saying a fund cannot be underperforming because one of the stock it holds doubled. The equity proceeds of SGD25m in 2009 and SGD23m last year, not to mention the CB proceeds, will be able to fund for these activities. Key is to look at how the cashflow changes, either funded or used

IMHO the catalyst will be whether the thais show us the money as the deal is still not closed