Oceanus Group

[javelin666]

Just my 2 cents on this company:

Oceanus is like a sinking black hole for money. It is going into sea cucumber, which is probably even more sensitive to environmental parameters than abalone, and it's going into water treatment. It is flailing around so badly when it should be concentrating on abalone.

That Dr Ng Cher Yew? He's a vet. Who has a history of not really knowing intimately the industries he invests in. He claims to have previously lost money on Internet companies. Now Oceanus is his baby. But he probably doesn't know what the people in the China facilities are doing.

Oceanus said they will employ a scientific method of raising abalone. I wonder - how come for such a big company, they're not doing it already? A scientific method would include well-calculated feeding strategies for a good food conversion ratio, and constant monitoring of environmental parameters (pH, dissolved oxygen, salinity, temperature). Good for their younger abalone, which should be raised in tanks. But they raise their adult abalone in cages in the sea, so nothing much they can do about the environment. It's up to heaven.

I remember reading a Daiwa report on Oceanus by Chris Sanda. Oceanus once reported losses of their abalone. He thinks it might be temperature changes in the water. He's most probably right. Abalone are sensitive to water quality changes, and if the temperature or salinity spike up, they might just die.

As to why there was malnutrition and stunted abalone, I think that since young abalone eat algae (and adult abalone eat seaweed - just dump a kg into the box/cage, and they'll be good for a week or so), the cultures in the phytology lab must've crashed. And there was no backup. This could be due to general inexperience among the workers or just bad management of the farm, which is pretty common in China. In aquaculture, especially hatcheries, algae cultures crash all the time, but there must be backup cultures in the phyto lab.

Also, I think you can't smell the dead abalone since they are all in cages in the sea. Same for fish in net cage culture - some die at the bottom, some float to the top. You won't know unless you pull up the nets and check regularly.

Anyway, Oceanus, I think, is the only aquaculture company listed on SGX. It's a real pity that it's presenting such a bad story for Singaporean investors. Aquaculture is a huge and growing industry with lots of success stories, but they fly under the radar.

[d.o.g.]

Also, I think you can't smell the dead abalone since they are all in cages in the sea. Same for fish in net cage culture - some die at the bottom, some float to the top. You won't know unless you pull up the nets and check regularly.

1. Only the large abalones are in cages at sea. Some of the missing abalones were of intermediate size and would have been kept in tanks on land.

2. For abalones that died at sea, their shells would still be in the cages. For those that died recently their bodies would still be in the shells.

The fact that Oceanus is only now requiring the retention of shells to audit dead abalones suggests that the missing abalones never existed in the first place. See post #53 in this thread for a more detailed analysis.

The shells could theoretically be stolen, but how are you going to remove the dead abalones? It takes too much time to do it onsite, so you still have to move everything offsite first, which brings us back to the logistics problem described in post #53.

[shanrui_91]

another victory for retail shareholder

@ OCEANUS AGM: Rare case, ex-CEO voted out of board

"A woman shareholder pointed out that Mr Yu was paid big bonuses in the past based on the company's reported profits which arose largely from increases in the fair value of the abalone assets -- rather than on actual profits derived from the sale of the abalones.

"The remuneration was more than S$1 million a year. This way of remunerating is unfair and very wrong. The bonuses should be clawed back from the CEO who has made a mess of our company.""

http://nextinsight.net/index.php/story-a...38-oceanus-

[Contrarian]

In the first place, China abalones are nothing popular. If it is that good, it would have raised my eyes. Why are the shops still selling mexico and Japanese dried abalones at the highest premium?

The independent directors approved payment package based on 'reported' profits? I rest my case, they have lots to learn esp... reported profits vs real profits...

Also, I think you can't smell the dead abalone since they are all in cages in the sea. Same for fish in net cage culture - some die at the bottom, some float to the top. You won't know unless you pull up the nets and check regularly.

1. Only the large abalones are in cages at sea. Some of the missing abalones were of intermediate size and would have been kept in tanks on land.

2. For abalones that died at sea, their shells would still be in the cages. For those that died recently their bodies would still be in the shells.

The fact that Oceanus is only now requiring the retention of shells to audit dead abalones suggests that the missing abalones never existed in the first place. See post #53 in this thread for a more detailed analysis.

The shells could theoretically be stolen, but how are you going to remove the dead abalones? It takes too much time to do it onsite, so you still have to move everything offsite first, which brings us back to the logistics problem described in post #53.

[money]

Oceanus closed at 2.7 cents as of 1 nov 2012.

Do companies that rely on living organisms too hard to understand and analyse? examples would include yamada, chinaMZ, olam and all the palm oil companies

[brattzz]

rights issue 38 for 100 @ 2.9cts... gosh! :O

[yeokiwi]

http://infopub.sgx.com/FileOpen/OGL_Rule...eID=248029

(a) Physical count of biological assets at 31 December 2012
The Group’s biological assets are carried in the statement of financial position at
RMB60,448,000. Management carried out a physical count of these assets on a periodic basis
and did not carry out a full physical count of these assets at 31 December 2012. Documents
provided by management that purported to support cycle counts of all inventories in 2012 did
not provide sufficient appropriate audit evidence that the cycle counts had been carried out.
Further, we were appointed auditors of the Company during 2013 and were not able to observe
the cycle counts counting of the physical inventories during the year ended 31 December 2012
or satisfy ourselves concerning those cycle counts by alternative means. Accordingly, we were
unable to obtain sufficient appropriate evidence on the existence of these assets at 31
December 2012, and changes in physical quantity during the year ended 31 December 2012.

(b) Physical count of biological assets at 31 December 2011
Management carried out a physical count of biological assets on a periodic basis instead of a
full physical count of inventories at 31 December 2011. Documents provided by management
that purported to support cycle counts of all inventories in 2011 did not provide sufficient
appropriate audit evidence that the cycle counts had been carried out. Further, we were
appointed auditors of the Company during 2013 and were not able to observe the cycle counts
of the physical inventories during the year ended 31 December 2011 or satisfy ourselves
concerning those cycle counts by alternative means. Since opening biological assets affect the
determination of the results of operations, we were unable to determine whether adjustments to
the results of operations and opening retained earnings, statement of cash flows and the
related disclosures in the notes to the accompanying financial statements might be necessary
for 2011. Our opinion on the current year’s financial statements is affected because of the
possible effect of this matter on the comparability of the current year’s figures and the
corresponding figures.

Title certificates of buildings
As at 31 December 2012, the Group has not received the title certificates of certain office
buildings with carrying amount of RMB16,438,956 (2011: RMB28,015,927). Of this amount,
RMB16,438,956 (2011: RMB19,122,472) related to buildings erected on land leased from third
parties, a related party, and a previous director of the Company.

As at 31 December 2012, the Group has not received the title certificates of certain farm
structure with carrying amount of RMB595,664,838 (2011: RMB671,797,221). Of the total
carrying amount, RMB557,657,155 (2011: RMB618,922,659) of farm structure were erected on
land leased from third parties, a related party, and a previous director of the Company. The
Group has not obtained title certificates amounting to RMB38,007,683 (2011: RMB52,874,562)
in respect of certain farm structure located on acquired land use right.

Isn't it as good as a scam??

http://www.nextinsight.net/index.php/sto...t-of-board-

Dr Ng Cher Yew, the executive chairman is currently also the interim CEO while Oceanus looks for a new CEO.

He was asked about the possibility of legal action against Mr Yu.

"The case is ongoing. Should there be evidence of fraud, we will take action," replied Dr Ng.

If the auditors' comments do not construe as accusations and evidences of possible frauds, then I do not know what is the definition of fraud.

[chialc]

Coincidentally, I flip thru Oceanus yesterday and my mental notes here:

1. AR last year was really bad. Auditor comments was taken up by Taiwan Stock Exchange. From putting a special trade category to delist.

2. AR the year before, the same auditor was happy.

Stock price today went up...

[Dividend Warrior]

Not looking good.....

http://infopub.sgx.com/FileOpen/OGL_Requ...eID=251629

[CY09]

Interesting turn of events, so once he loses his seat, he becomes uncooperative with the abalone mortality check.

Does it mean there was something fishy in the report of the abalone deaths. Like what many on this thread have said; could the abalone mortality incident be more than " abalones dying"" and instead lapses in internal audit.