The Global Economic Outlook: A Direct Path To Chinese Equities [View article]
Add SIAF in your list of companies to focus on that may bring extraordinary returns in the next 2-5 years. Although currently trading on OTCBB, it is seeking a dual listing on the swedish FirstNorth exchange as a stepping stone for uplisting to an US as well as a swedish senior exchange later next year. An easy 10 bagger in the next 18 months imo.
China plans to subsidize the development of pure-electric and plug-in hybrid vehicles in the nation to reduce the nation's dependence on oil and cut emissions. The State Council's public goal of seeing 5M alternative-energy vehicles produced by 2020, blows away previous estimates and sets the prize high for a company able to knock out a technological breakthrough in the industry. EV-related plays include F,GM, TSLA, NSANY.OB, AVAV, ECTY, GACR.PK, KNDI, HMC, JCI, NRG, ZAAP.OB, VLKAY, and AONE. [View news story]
add to that the smart-parking vertical garage concept also introduced by KNDI and you have a complete EV recipe for China's crowded cities.
Asia Entertainment: Wealth Play With High Octane Business Model Set For Rapid Growth [View article]
Thanks for a great article that tells a compelling story in fairly simple terms. I think the share counts you use to estimate eps in 2012 and 2013 are however low, resulting in high estimates. For 2012, you also need to add the 530K outperformance bonus shares to the incentive shares, resulting in an OS of 41.9m. For 2013, if I apply a P/E of only 7.5 to your 2012 eps estimate of 3.26 (which by itself is very conservative since it is based only on one new LOC of 25m in April'12 among many possible catalysts that together may result in a much higher eps as you pointed out), I get a share price of 24.5. At that price, the 60m founders loan will have been converted into 3m shares. So, the likely share count in 2013 would be 41.9+2.573+0.53+3=48m compared to 44m that you used for the eps predictions.
Macro Growth Good For Macau Casino Operators [View article]
That's correct. AERL currently operates only 3 VIP rooms, 2 are with Galaxy (Starworld and Galaxy Macao) and one with LVS (Venetian). Although the founders (Chairman Lam and COO Vong) have both been in the junket business for decades with vast connections in Macau, the company became public through a SPAC only last year. It seems that their policy is to work only with a few crop of the cream casinos in Macau and fund their operations mostly with their own cash/cash flow instead of dilutive financings. On the last CC Mgmt sounded fairly confident about getting a 4th room at the new Cotai Central resort early next year. I think they will add a 5th room by the end of next year as their Cage Capital may exceed 400m in Dec'12 (from currently about 248m!) making it more efficient for them to add another room.
Macro Growth Good For Macau Casino Operators [View article]
75% of Macau's gaming revenue comes from VIP rooms whose wealthy patrons are brought in mostly from China by a vast network of junkets. One of the top junket groups, a Nasdaq listed company, AERL, reported today a RCT of over US2.1B for October, up 84% for the month and 104% yoy for the first 10 months of 2011. That's about 2 to 3x as much growth as the fast growing Macau market. If someone is looking for a pure Macau play in its highest growing segment, take a look at this small company:
Macro Growth Good For Macau Casino Operators [View article]
75% of Macau's gaming revenue comes from VIP rooms whose wealthy patrons are brought in mostly from China by a vast network of junkets. One of the top junket groups is a Nasdaq listed company, AERL, reported today a RCT of over US2.1B for October, up 84% for the month and 104% yoy for the first 10 months of 2011. That's about 2 to 3x as much growth as the fast growing Macau market. If someone is looking for a pure Macau play in its highest growing segment, take a look at this small company:
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield, Part II [View article]
suitcases of cash? nah, most Macau gamblers come from China and they are not allowed to bring much cash out of country. The junkets have to loan those VIPs the money in Macau (credit) and get paid back in China. So far it works very smoothly and AERL's DSO is around 20 days, meaning all payments are made within a monthly cycle. Btw, the VIP biz accounts for about 75% of total gaming revenue in Macau.
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield, Part II [View article]
October should see a monster RCT reported in few days. The first 9 months of this year the monthly RCT has grown an average 113% yoy. Based on RCT of Oct 2010 of 1.147B and that 113% annual growth, we should see RCT of 2.44B or a net income of almost 10m just for October.
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
LVS (or Galaxy) doesnot have a network of junkets working for them. That's why they need junket operators lilke AERL (whose chairman Lam was a Macau junket and a junket operator himself for decades) to run this extremely profitable segment of their business. And that's why they provide a LOC to AERL to jumpstart that junket business at their own casino that makes them lots more money than the LOC. Remember, they pay only 1.25% of monthly RCT to AERL while the win rate itself can be 10%+ of RCT.
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
AERL has been the proverbial "baby thrown out with the bathwater" with the ongoing trashing of China stocks amid fraud concerns. Ironically, it's not even a chinese stock as it is governed by SAR Macau law, just like Hong Kong stocks are governed by HongKong law. Also, concerns about credit crunch and slowdown of China's economy amid gloomy macro settings has unjustly punished AERL stock to the extreme along with other Macau stocks, creating opportunity. In fact, AERL does not depend at all on banking credit to grow and has access to more private capital than it needs due to its very high ROC of 40%+. October is shaping up to be another monster month with 100%+ yoy growth of Rolling Chip Turnover. Considering its stellar growth prospects, the unique transparency and scrutiny of its revenue by multiple independent parties and the safe harbor of a high-yield divi and price support by a share buyback plan "while you wait" for the SP to reach that 22.5 price target set by Sterne Agee (a lofty 12-month target) , this stock seems like a rare gem in my eyes with extraordinary appreciation and total return potential while being relatively safe.
Jadestone’s hit-piece against GURE is a fraud. [View instapost]
It amused me as a retired engineer to see how JS cleverly used pseudo technical terms like "type-750 towers" and even the right formula to link pumping capacity (of one pump) to the annual extraction capacity of a bromine tower (1300 M3/h x 24h x 26 days x 12 months x 0.000210 = 2044 MT of Bromine) to "prove" that reported production numbers are inflated but showed total ignorance (or is it clever omission?) of the fact of a single bromine tower can be fed by several 1300 m3/h pumps at a time. How can a single factory like Factory 1 otherwise produce in 2010 as much as 9480mt, almost a third of GURE's total 2010 reported (and verified by government agencies) production? If a single brine pond can be fed by 700-800 small well pumps, why can't a bromine tower be fed by 2 or more of the large 1300 m3/h pumps that can double or more its total annual capacity ?
Not only several of the 9 factories have two bromine extraction units each (Factory 1: see Photos 52,53, Factory 6: see Photos 27 and Factory 8: see Photos 42/44 of Marc Chang's published photos) but each tower can also be fed by several parallel pumps, leading to the 46,300 mt total annual capacity. After having seen Marc Chang's detailed photos and analysis, there's NO doubt left in my mind about the veracity of GURE's production numbers and upgrade expenses. It all added up correctly.
Gulf Resources Site Visit Indicates 2011 Guidance Is Overly Conservative [View article]
Thanks for the clarification. Does that mean that with the number of wells now at 7,673 (vs. 6,423 by End of 2010) the full bromine production capacity has increased from 46,300 MT/Y to 65,112MT/Y, an increase of 43.7% ? That's a substantial improvement.
Gulf Resources Site Visit Indicates 2011 Guidance Is Overly Conservative [View article]
First off, great article providing very valuable insight into the verification of claims on production, revenue and upgrade expenses. Thanks for a great piece of DD. After the first read, I just have 2 comments re. some of your conclusions about Table 3 to 5:
-Tables 3 and 4: "If the Bromine content of the brine can remain somewhat stable thanks to the new and deeper wells, there will be sufficient wells to reach a Bromine output of an estimated 45,494 MT at 100% factory capacity. At 82.20% (300 days) production efficiency corresponding to an output of 40,849 MT Bromine (Table 3), the demand of brine is fully covered". I believe the 45,494MT you calculated are based on 300 days/yr production or 82% utilization, not 100% full factory capacity. The 100% capacity (or utilization) of the upgraded bromine facilities (with 1250 new/rebuilt wells representing by itself a 19.5% increase of brine production capacity vs. the 6423 wells they had before) should be 55,351mT/yr = 46,300 x 1.195. It wouldn't make sense to add over 1200 wells to your facilities and end up with less production at 100% capacity which was 46,300 mT before the upgrades, would it?
- in Table 5 you assume that salt production/revenue would not increase at all in case of Strategy A (upgrades) vs. Strategy B (acquire more bromine sites). That's a very conservative assumption. In reality, salt is a by-product of bromine production. As you pump more brine volumes through the extraction towers as a result of new/rebuilt wells, you automatically end up with more salt production. Not to mention increased salt prod. efficiency through better pan insulation and draining of rainwater and possibly higher salt prices due a higher quality.
The Global Economic Outlook: A Direct Path To Chinese Equities [View article]
China plans to subsidize the development of pure-electric and plug-in hybrid vehicles in the nation to reduce the nation's dependence on oil and cut emissions. The State Council's public goal of seeing 5M alternative-energy vehicles produced by 2020, blows away previous estimates and sets the prize high for a company able to knock out a technological breakthrough in the industry. EV-related plays include F,GM, TSLA, NSANY.OB, AVAV, ECTY, GACR.PK, KNDI, HMC, JCI, NRG, ZAAP.OB, VLKAY, and AONE. [View news story]
http://yhoo.it/OXtREp
3 Reasons To Buy Gulf Resources [View article]
http://bit.ly/PD3tyv
Asia Entertainment: Wealth Play With High Octane Business Model Set For Rapid Growth [View article]
Macro Growth Good For Macau Casino Operators [View article]
http://bit.ly/tOE4oe
Macro Growth Good For Macau Casino Operators [View article]
http://seekingalpha.co...
Macro Growth Good For Macau Casino Operators [View article]
http://seekingalpha.co...
Macro Growth Good For Macau Casino Operators [View article]
http://seekingalpha.co...
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield, Part II [View article]
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield, Part II [View article]
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
Jadestone’s hit-piece against GURE is a fraud. [View instapost]
Not only several of the 9 factories have two bromine extraction units each (Factory 1: see Photos 52,53, Factory 6: see Photos 27 and Factory 8: see Photos 42/44 of Marc Chang's published photos) but each tower can also be fed by several parallel pumps, leading to the 46,300 mt total annual capacity. After having seen Marc Chang's detailed photos and analysis, there's NO doubt left in my mind about the veracity of GURE's production numbers and upgrade expenses. It all added up correctly.
Gulf Resources Site Visit Indicates 2011 Guidance Is Overly Conservative [View article]
Gulf Resources Site Visit Indicates 2011 Guidance Is Overly Conservative [View article]
After the first read, I just have 2 comments re. some of your conclusions about Table 3 to 5:
-Tables 3 and 4: "If the Bromine content of the brine can remain somewhat stable thanks to the new and deeper wells, there will be sufficient wells to reach a Bromine output of an estimated 45,494 MT at 100% factory capacity. At 82.20% (300 days) production efficiency corresponding to an output of 40,849 MT Bromine (Table 3), the demand of brine is fully covered".
I believe the 45,494MT you calculated are based on 300 days/yr production or 82% utilization, not 100% full factory capacity. The 100% capacity (or utilization) of the upgraded bromine facilities (with 1250 new/rebuilt wells representing by itself a 19.5% increase of brine production capacity vs. the 6423 wells they had before) should be 55,351mT/yr = 46,300 x 1.195. It wouldn't make sense to add over 1200 wells to your facilities and end up with less production at 100% capacity which was 46,300 mT before the upgrades, would it?
- in Table 5 you assume that salt production/revenue would not increase at all in case of Strategy A (upgrades) vs. Strategy B (acquire more bromine sites). That's a very conservative assumption. In reality, salt is a by-product of bromine production. As you pump more brine volumes through the extraction towers as a result of new/rebuilt wells, you automatically end up with more salt production. Not to mention increased salt prod. efficiency through better pan insulation and draining of rainwater and possibly higher salt prices due a higher quality.