Share Name Share Symbol Market Type Share ISIN Share Description
Haike Chemical LSE:HAIK London Ordinary Share KYG423181083 ORD USD0.002 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 24.50p 23.00p 26.00p 24.50p 24.50p 24.50p 95 07:51:21
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 76.0 0.6 0.0 1,990.3 9.40

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Date Time Title Posts
25/5/201708:39Haik, Fast growing Chinese Stock, forward pe 5 (perhaps lower)....10,323
13/4/201611:17HAIKE - Chinese Petro-Chemicals1,469
08/5/201216:46HaiKe Chemical - Strategic pursuit of margin-
04/1/201210:07Haike - Recent Developments14
28/11/201115:46HaiKe Chemical Group Limited120

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Haike Chemical Daily Update: Haike Chemical is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker HAIK. The last closing price for Haike Chemical was 24.50p.
Haike Chemical has a 4 week average price of 22.75p and a 12 week average price of 17.75p.
The 1 year high share price is 37.50p while the 1 year low share price is currently 9.75p.
There are currently 38,353,571 shares in issue and the average daily traded volume is 6,294 shares. The market capitalisation of Haike Chemical is £9,396,624.90.
the oak tree: It had drifted lower with the oil price sliding and has just recovered from that in my opinion. Personally I don't see the oil price as that relative to this share. They have demonstrated they can make money on a low oil price as they have moved to the speciality chemical side.It's all about some words at the end of their next announcement on how current year trading is going. Imho I think they will make continued progress and that will lead to a sharp jump in the share price. Patience........
phil1969: Check out the chart for chart in Nov 2011 when an upbeat trading statement was released and announcement of a new CFO. The statement was a lot more vague than todays detailed release but the share price shot up from 12p to 50p on the day then over the next few weeks topped out at over 70p. Back in 2007 HAIK traded as high as £2 per share. Higher turnover but more debt and lower profitability than we have today. Perhaps 45-50p is a conservative estimate for the re-rate!!
the oak tree: Obviously the massive rise in profits , some 350% , is welcome. Compared the amount to its market capitalisation! But it's the small, in comparison , debt they now have that's most pleasing. Plus a reasonable cash balance. At some point this year I reckon it's in for a rerating. Which will probably happen quite quickly as few trades seam to move the share price a lot. IMHO It's China ofcourse that puts people off. But if it was a western based company this would be a value play.
the oak tree: CFO resigns after 5 years for personal reasons (probably never know, be interesting if he sells any shares but we won't know now I suppose). The trading update is very interesting and probably why the shares have been up lately. Turnover is well down Y on Y however profit is well up. It made approx £1.3m for last 6 months so lets say thats £2.6m for FY16 (could the oil market be any more diffcult to be in right now? i.e. it may well get better??). However its on a market cap of only £5.7m! two times profit is incredibly cheap. Ofcourse there are reasons for this: 1. it's poor trading history 2. it's balance sheet 3. it's chinese. We'll just have to see what the balance sheet looks like in due course. Last we heard they had clearned their huge debts. Time will tell...... But even on a mark cap of 5 times profit that gives a market cap of some £13m which is 1.3 times the share price today. All IMHO , DYOR. HaiKe Chemical Group Ltd. (the "Company" or "HaiKe"), the AIM quoted (AIM: HAIK) specialty chemical company based in Shandong Province, China, announces George Zeng has decided to step down from the Board for personal reasons and, on 18 July 2016, resigned as Chief Financial Officer of HaiKe with immediate effect. The Board has initiated a comprehensive search for a new Chief Financial Officer, who would be expected to join at Board level, and a further announcement will be made in due course. Trading Update The Company also provides an update on trading for the six month period ended 30 June 2016. The improved performance, highlighted in the 2015 Final Results on 31 May 2016, has continued, and for the six months ended 30 June 2016, the Company delivered unaudited revenue and net profit of CNY526.9 million (CNY727.9 million in the same period of 2015) and CNY11.4 million (CNY3.0 million in the same period of 2015) respectively. Mr. Xiaohong Yang, Executive Chairman, said: "On behalf of the Board, I would like to sincerely thank George for his commitment and outstanding contribution to the business over the last five years. We wish him and his family well for the future."
zaksab: A highly leveraged business with a lot of short term debt, little equity, low interest cover and an inherently volatile cash flow has a high chance of going bust. Any free cash flow they generate has to be used to try as hard as possible preserve shareholder value. Therefore it must be used to try and increase the chance that the current equity holders will actually continue to have any invested equity over the long-term. There is value to be gained from Haik because it has assets and EBITDA but the question is who will be entitled to it. At the current juncture it looks like,in my opinion, that eventually, shareholders will be entitled to nothing once the debt covenants are breached and/or the mountain of short-term debt is not rolled over. Then the debt holders would take the company (an equity raise would be unlikley and a firesale would probably not cure the problem) If they pay a BIT back to equityholders via a dividend - yes, of course, it gives back a portion of value but what happens to the rest of shareholders value, being the majority, as a result? Answer it should fall at least to ofset the payment but moreover by more than the dividend returned. The simple fact that when managment annouce earnings and a dividend people price in the accrued earnings and the payment. The only positive or negative surprise would be if capital is incrementally being allocated different to what they would expected.Any sensible long-term shareholder would expect that every sinew here would be used to try and make the capital structure - THAT IS WHAT IN TIME WILL PRESERVE SHAREHOLDER VALUE. The payment of a dividend clearly shows, in my opinion, that management are not taking every available step to strengthen the equity capital structure. The shares can of course react whichever way they want to annoucements but in time, when looking back, it will always be available the opportunity to discern what was the correct action to make.If the business goes on to survive and do well, then the dividend wouldnt have seemed bad. However, at this point, we do not know what the future will hold nor do they so they have to make rational decisions given the present circumstances. The rational action, in this instance, would certainly be to reduce short term debt obligations. Your keeness to refer to making shareholder employees happy fits my last sentance above. Clearly, if there shareholding went to nothing thereafter they would not be happy with the token dividend. If the payment of the token dividend materially increased the chances of their shareholding going to nothing, they rationally should not be happy either. Any analysts looking at this would conclude that paying a dividend right now is bad news for long-term shareholders. As an aside, you have obviously witnessed the recent trajectory in the share price and my ramblings have been going for several months now while you have been salvating over the low PE and the dividend yield...
rivaldo: Big coverage in today's FT - the current valuation of HAIK by the market is apparently "irrational".... "January 22, 2012 3:58 pm Chinese group finds right chemistry in Aim By Alexandra Stevenson Tough market conditions have made raising money on the Alternative Investment Market virtually impossible, but one Chinese company says it still sees value in the junior exchange. "We have found it easier to do business as a public company compared with before 2007 when we were an ordinary private enterprise in China," says George Zeng, chief financial officer of Haike, a petrochemical and speciality chemicals group. His comments come at a time when the exchange has seen more companies leave than join. Tough trading conditions, triggered by turmoil in financial markets in Europe, pushed 24 companies off the alternative market in the last three months of 2011. Current expectations are low. The junior market has been a venue for small companies to raise otherwise inaccessible funds, but this year companies on Aim raised less money than in the credit squeeze of 2008. While hesitant to make any predictions, Mr Zeng says that, if the market improves, he is confident Haike can still raise money. But he makes one thing clear: he would not go back to the market under current conditions. In early 2007, when the Dongying-based company listed on Aim, it needed extra funds to expand two oil and chemical production facilities. It raised a net $17m through an issuance of 33 per cent, or about 11m shares. Shares began trading at 79p. They are now priced at a more modest 36p. But Haike has no problems finding the funding it needs. Unlike many foreign listed companies that use their Aim listing to boost credibility overseas, Haike's status as a foreign listed company has been more useful in its home market. "After our admission to Aim our company reputation has increased in local markets when dealing with local banks," Mr Zeng explains. This has meant access to local bank loans in a year when the Chinese government largely reined in monetary policy, squeezing most businesses' access to capital. Haike, which has negotiated one-year loans with a dozen local banks, currently has $400m in debt. Mr Zeng does share one frustration with Haike's fellow Aim members though: market volatility. Over the past year its share price hit a low of 25p in April and a high of 89p in the summer. This is exacerbated by retail investors, Mr Zeng says. "Some retail investors are not looking to the fundamentals of the company. I refer to their thinking as irrational." Aim has a reputation of being a backdoor for foreign companies with sketchy corporate governance, because its rules are more relaxed than the main London Stock Exchange. Companies are not required, for example, to make a minimum number of total shares available to be freely traded. Haike, for its part, is trying to separate itself from this perception. "We try to communicate with investors in a more transparent way...we are keen to provide more trading updates compared with previous years in order to inform investors of changes in performance," Mr Zeng says. Haike plans to find an independent researcher this year to help address the company's undervalued share price, he adds. But valuations are bound to be skewed as changes in the FTSE Aim index over the years highlight. When the market launched in 1996 the index was 1,000. Currently it hovers around 678. Haike has high hopes things will turn round. It is not the only company still waiting for the Aim to come back to life."
zaksab: Sorry Vatking - you do not understand accounting and you make some bizzare statements. Look at the accounts more closely. I hadn't looked at H1 but have done now. H1 was a good half for them though guidance is clearly for worse to come. EBIT interest cover has improved from 1.5x to 1x. THe thing to find an answer for is the massive absorption of restricted cash. This is having the effect of draining liquidity out of the business and forcing it to raise more debt for it to meet its cash outgoings once from unrestricted cash balances. It may be that the banks are asking for some sort of a sinking payment fund whereby cash has to be ringfenced to honour the debt upon maturity. THis would not be bad thing - HAIK would be being forced to de-lever - the concern would be that it causes a liquidity drain from the business preventing it from meeting its cash operating, investing or debt refinancing needs in the future. In H1 they did manage to borrow more money to cover these and to increase the gross cash balance. If trading is set to deteriorate in H2 there are liquidity risks clearly. That is even if you are relaxed about solvency - with an interest cover like that and inherent operational gearing, I wouldnt be. On the currency, I reiterate my point that in valuing a companies shares it it is the currency that the company earns its revenues and pay its costs in that matters and the relation to the currency in which its stock is traded. For HAIK revenues and most costs will be in RMB and obviosuly the stock is in £ so if you are bullish RMB/£ you will expect a kicker to the HAIK share price all things equal. If the reporting currency changed tomorrow to Brazilian real this exposure will not change.
forest owlet: I get back after 3 weeks and find the share price is the same as when I left. No surprise there. Ah yes timmbo, is the advance PER 1, or 2 or somewhere much higher? That's the unhappy thing with a Chinese refiner: forward visibility is poor to say the least. And don't forget the company is heavily indebted after the refining margins disaster in 2008. Still I note that Haike's wholesale prices are holding up very well (thanks again for that website address liyangnano: immensely useful information there for working out the crack spread in China!) and in common with other Chinese refiners they would appear to have been making bumper margins since late November. The Chinese government seem to be tolerating these relatively high prices, compared to other countries. Perhaps they think Sinopec and the other big state players need a break after all those forced losses in 2008?! If refining margins average even reasonable through 2009, this will easily make up for somewhat weaker sales/margins in speciality chemicals. The latter development, although just speculation as yet, is entirely to be expected given the sharp slowdown in China. As we have so painfully learned, the key to HaiKe's performance is refining margins, both because refining represents over 75% of revenues and because nearly half of speciality chemical profits are lost to minority interests. There seems little prospect of a repeat of 2008's crude-spike-produced disaster, but just how well it will go this year is a big unknown. I don't see anything helping to stem the decline in the HAIK share price more than temporarily until a return to good profitability is confirmed in the Interims in September, and maybe not until Finals are published in spring next year.
forest owlet: It's the season for predictions, so here goes. (Hope I do better than for 08!) There will be a recovery in the HAIK share price in the New Year following a positive trading update, but it will only be modest because of continuing general economic gloom and the company's specific problems (loss-making 08, lots of debt, uncertainty about future refining margins). Things will go into reverse though in April when the finals are published, as HAIK share movements are mostly news-driven, and the 08 results will be bad even though 09 trading conditions are much improved. There will be a more sustained recovery in the share price later in 09, providing refining margins continue to be positive through 09, and the share price will end next year at around 70-80p. Anyone else care to stick their neck out?
needs_to_be_perservd: i got that wrong it was may 2007, and here was that article, Haike Chemical - New capacity complete in October 122.5p Epic code: (HAIK) (Sharewatch) We think oil refining and speciality chemical business Haike Chemical has the potential to put in a strong share price performance in the next few months, perhaps even rivalling our other fly-away Chinese recommendation, solar wafer company Renesola. Shareholders in Haike are in no danger of getting bored in the short-term. At a time when China still has a chronic shortage of refining capacity, what lies behind the jump in earnings forecasts from 19.1p in the current year to 31 December to 33.7p next year is the expansion of Haike's refining facilities which are due to complete in October. That forecast drops the prospective PE ratio from 6.6 to 3.7. But what will set the share price on fire later this month will be Q1 results (expected late May) which should show that not only is capacity expansion on track but also that trading in the current year is running well ahead of expectations. Refining capacity shortfall China continues to demonstrate its ability to create explosively fast growing businesses. In the case of Haike, which owns a refinery there, the story is growth driven by one of the fastest growing economies in the world which has already vaulted China into second place amongst the world's biggest oil consumers, behind only the US. The city of Dongying (in the coastal province of Shandong), where Haike's facilities are located, shows exactly what has been happening elsewhere in China as it evolves from an agrarian economy. In barely a decade, Dongying (pronounced pinyin) has grown from a small village into the fourth largest city in Shandong, with a population of about 1m. With that growth has come a large scale transition away from bicycles and mass transit to private automobiles, which are more affordable since China's admission to the World Trade Organisation. Consequently, by 2010, China is expected to have 90 times more cars than in 1990. But Shandong's industrial base has also developed rapidly driven by Western demand for cheap goods and this too is also gobbling up vast amounts of petrochemicals to make everything from fertiliser to Barbie dolls. China's ability to provide for its own energy needs is, however, limited by the fact that since 2003, it has had insufficient capacity to refine all its domestic consumption. Haike, which was founded as a Chinese state owned refining entity before it was acquired in 2000 by its management, has therefore recently found itself with sales limited only by capacity. As a result, it has sought to expand its capacity. To fund this, in February Haike carried out a well supported placing of 12.7m new shares through broker Hanson Westhouse at US$1.57 to raise US$17.2m net. That represented one third of the equity and valued Haike at US$60.2m (excluding debt at the end of December of US$47.4m). Oil Refining In terms of revenue, Haike's core business is Hi-Tech Chemical, which is the original oil refining activity. The business operates from a single site in Dongying and has an annual refining capacity of 21,000 barrels of oil per day. That makes the refinery quite small by world standards but nevertheless, last year it still generated sales of US$202m, up from US$170m the year before. Raw or unprocessed crude oil is not very useful in the form it comes out of the ground but Haike's industrial process plant will refine it into more useful petroleum products such as fuel oil, gasoline and diesel as well as a range of petroleum derivatives such as petroleum coke and liquified gas. Price restrictions being abolished The products are marketed to local users in Shandong for not only transport but also a range of industrial uses including fertiliser, building materials, toys, textiles and low end electronics. The prices Haike has been able to charge for its refined products has been fairly muted compared to what has been happening to the oil price on the world stage. This is due to domestic oil pricing restrictions imposed by the Chinese government which meant that although Haike was buying crude oil at world market prices, it could only sell refined products at domestic prices. As a result, Chinese gasoline prices rank amongst the lowest in the world and are a third of the retail prices in Europe. Only when the international price change exceeds 8% do the authorities step in and allow Haike to increase its selling prices. When we met with chief financial officer Johnson Lau last month, he pointed out that things are about to change. Following China's accession to the World Trade Organisation, there are requirements in place for it to open its wholesale and retail markets for refined oil products by abolishing the price restrictions. That will provide room for Haike to increase prices and boost its refining gross margins (presently 9.1%). The restrictions were due to have been removed at the end of 2006 but the wheels continue to turn, albeit slowly. Lau anticipates it will happen in the next few months even though initially it may not cover all products but be limited to certain refined product categories. But that doesn't matter too much as Hi-Tech is able to define various parameters during its refining process and constrain the production of certain products in favour of others. Located close to Shengli oil field Against the backdrop of frequent and volatile changes in the price of raw crude, Haike does not have any contracts for the supply of crude oil, although it has established a long-term strategic alliance with the state-owned Sinopec which operates the huge Shengli oilfield, China's second largest oil field, which surrounds the Dongying facilities. The field, which has been producing for 40 years, will probably be depleted in as few as 25 years but it presently only supplies Hi-Tech with 40% of its crude oil requirement. The rest is imported from Russia. Changing mix of product output As Lau points out, no single refinery looks like another. Each operates a number of processes that reflect the range and quality of the crude oil it processes. In Hi-Tech's case, it is using a heavy crude oil feedstock and this results in larger proportions of heavier fuel oils compared to lighter fractions such as gasoline. But the group is spending US$14m this year to install heavy oil cracking equipment at Dongying. This will enable it to manufacture greater quantities of higher value, lighter products which attract premium pricing, while production of its lower value, heavier products will decline. US$14m investment In this article, we have drawn a number of parallels to Renesola. Whilst most are valid, there is one caveat, which is that Haike's business is not as scalable. Unlike Renesola, which has been expanding its capacity like no tomorrow, new refineries do not spring up overnight. Haike has already spent the past two years in a planning and feasibility study stage. Construction finally began in February and will be complete in October. Hi-Tech's refining facilities presently have an annual capacity of around 1m tonnes. This may appear higher than the actual output of around 450,000 tonnes last year because the total capacity ignores the various cumulative stages through which some products, such as diesel, are refined. Assuming there are some teething problems, broker Hanson Westhouse forecasts that Hi-Tech's refining facilities will have an additional annual production capacity of almost 800,000 tonnes by next January, bringing total capacity to approximately 1.8m tonnes. Expansion of speciality chemicals At the same time as expanding its refining facilities, Haike is also expanding the second equally exciting leg in speciality chemicals. These are chemicals which are manufactured in relatively low volumes for specific end uses. Growth is directly related to the growth of other industrial sectors including electronics, textiles, food and construction. There are two main businesses which make up this division. Bigger of the two is Spring Chemicals, which dedicates most of its production to dimethyl carbonate (medical applications and agricultural pesticides), propylene glycol (lubricants, plastic production) and ispropyl alcohol (used for cleaning electronics and as an industrial solvent). The smaller business is Shengli Electrochemicals, which is focused on the production of sodium hydroxide and liquid chlorine (both of which are used in paper production, textiles and detergents). The company has its own salt field covering 1,000 acres and has capacity to produce most of its own salt used in the production process. Both Spring and Shengli have well invested facilities, which last year enabled them to grow their turnover by 64% to US$51.2m. That growth was principally driven by the commencement of ispropyl alcohol (IPA) production. In the short-term, Lau says that Haike has earmarked a further US$3m to expand IPA production this year, with a view to increasing capacity by 60% to 50,000 tonnes by next year. That will help lift total production of all speciality chemicals from 100,000 tonnes to 130,000 tonnes. Elsewhere, Haike owns a fine chemicals business which makes small quantities of heparins (used in the pharmaceutical industry to prevent the formation of blood clots) but this is a very small element of overall sales and we include it only for completeness. Eps of 19.1p and 33.7p A note published by broker Hanson Westhouse on 3 April gives an idea of the opportunities facing the group. Because of the additional shares in issue, for the current year to 31 December, the growth in eps to 19.1p looks fairly muted, even though sales are forecast to jump to US$321m and pretax profit to US$17.5m. That compares to sales of US$254.7m and a pretax profit of US$12m the year before. But next year is one of real jump off, as the new capacity kicks in and Hanson Westhouse expects the business to fly. Sales for 2008 are forecast to surge to US$541m and pretax profit to US$34.4m. On that figure, the earnings per share would be 33.7p, dropping the PE to 3.6. The standard rate of corporation tax in China is 33% but Haike also has favourable corporation tax policies as the business is registered in the Cayman islands and also due to the areas it operates in. Lau anticipates that the group will not pay much tax in 2007 and expects the company to pay a reduced rate from 2008-2010. It is not just that low PE that makes the shares look set to fly. The directors and employees also own 51% making for a tight market. Buy. * The writer has a holding
Haike Chemical share price data is direct from the London Stock Exchange
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