China Essence

[specuvestor]

^^ Interesting you digged up my old comment... I will reply you with your own comment in bold

That to me is the most important part of this business model as I've posted previously, ie high working capital for harvest season tapering
off as collections kick in. What happens if one doesn't have the working capital for the harvest, let alone if starch price doubled or tripled?

China Essence has missed its Dec 2012 CB payment. Now it missed its June 2013 payment.

Will it has cash to start the upcoming production cycle?
I hardly doubt so. this is one counter to be included in "Short S-chip Fund"..

[happyharvest]

share price drop further wor .. maybe bad news coming?

[Stockerman]

probably some of the 10,000 farmers revolting because Essence had no money to pay them although the potatoes have been supplied.

Or the cash collection for the A/R was further delayed and company had to renage on their words that they had the financial means to start the harvesting season..

share price drop further wor .. maybe bad news coming?

[Stockerman]

Previously it was thought that chairman had managed to find someone capable of steering Essence back to live . But now even the CEO had thrown in the towel. CFO had quitted to become ID. FC is promoted to CFO and chairman became the CEO again.

[specuvestor]

The changes speaks volume on the viability of the company... now a question of whether PRC banks will fund it... for non-financial reasons

[Stockerman]

As there are some 10,000 farmers whose livelihood depends on Essence, it can be surmised that the local PRC banks will continue to lend. So at a certain stage, it will stop. As to when, I have no idea.

If essence continues to incur losses for the 3rd straight year, it will enter SGX's watching list. If the situation continues for 2 more years, it will be "asked" to be delisted.

[Stockerman]

Very Surprised that company still have spare cash for capex investment, especially when there are currently so much spare capacity from the severe underutilization..
What is the real truth on the ground?

How come no SGX announcement?

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http://www.hlbe.gov.cn/dzzw/nr.asp?id=117561

项目总投资8000万元，新上马铃薯粉皮生产线3条，总产能为年加工粉皮1万吨，项目分两期进行。项目占地面积64050平方米，建筑面积12652平方米，新建马铃薯粉皮车间、车间办公室、原料库房、调料间成品库等，建设期2013年5月-2014年11月，项目达产后年可实现销售收入15000万元，利润1045万元，税金500，安置就业200人。
一期工程投资3000万元，已正在进行当中，主要利用现有厂房、库房、人员，改建现有两条粉皮生产线中的其中一条，改造后产能扩大到年产马铃薯粉皮3000吨，设备已订购， 6月份可安装调试，7月份对现有员进行员工的培训并进行试生产。
二期工程投资5000万元，再新建一条年产粉皮3000吨的生产线，使马铃薯粉皮生产线达到3条，合计产能达到年产粉皮10000吨。
项目预计2013年完成投资3000万元。现已经完成投资1500万元。


Projects with a total investment of 80 million Yuan, new potato vermicelli production line 3, vermicelli processing 10,000 tons total capacity for years, divided into two phases. Project covers an area of 64,050 square meters, 12,652 square, new potato vermicelli workshop, workshop, raw material warehouse, dressing in the Office product warehouse, construction period May 2013 to November 2014, the project reaches the postpartum year to realize a sales income of 150 million Yuan, profit of 10.45 million Yuan, tax is 500, placed 200 jobs.First phase investment of 30 million Yuan, is underway, primarily using existing factories, warehouses, staff and replaced one of the existing two vermicelli production line, after the transformation of capacity to produce potato vermicelli 3,000 tons, equipment has been ordered in June, installation and commissioning, in July to test the training of existing staff and production.Second phase investment of 50 million Yuan, and then create a vermicelli production line of 3,000 tons/year, potato vermicelli production line reached 3, total production capacity reached vermicelli 10,000 tons/year.Project expected to be completed in 2013, the investment of 30 million Yuan. Has now completed investment of 15 million Yuan.

[Stockerman]

The changes speaks volume on the viability of the company... now a question of whether PRC banks will fund it... for non-financial reasons

eventually, commerical reality will hit and PRC banks will pull the plug. The central govt has authorised a big audit on local govt debt and finances....think there will be a catharsis of the excesses (e.g. spare capacity, etc) in the system soon...just wait and see.

Remember this post I made today ...

[jzk]

So, what's new? Over sixty million shares of volume today? Stock lending expiry or what? BTW, how is the business? Still running only three out of five production plants? What do they look like - is it possible to drag out unnecessary production facilities and convert the buildings to hardware stores?

[Stockerman]

This is a piece of walking zombie company .... Very surprised that the company has enough cash to pay farmers for their potatoes .....