Asian Citrus Share Discussion Threads

[the oak tree] 24/2/2015 17:38

I think I'll continue to stay out till a RNS says things are a bit better , stable. Just a little good news is needed IMO. I know the share price may will increase on it but for now I'm OK with paying more.

[wigwammer] 24/2/2015 14:18

Not sure I'd take investment advice from a fruit farmer.The evidence suggests they have already put their cards on the table and lost.The point is - will they carry on losing?Short term the outlook is uncertain for achl. Pricing, supply, weather - numerous factors have worked against them.But longer term the fruit farmers in China might just have got it right - a large burgeoning market that likes fruit and fruit juice as an affordable luxury. If achl keep their head above water on the corporate governance side (the real issue here, and I'm not convinced at all they are culpable) - then this is very likely to multi bag from here over time. Short term is anyone's guess.

[piedro] 24/2/2015 10:25

Rupe1958 22 Feb'15 - 18:06 - 3997 of 4002
"This company was making £50-60m a year core profit only 3 years ago. There's no reason it can't get back to that and better."

- if you were a fruit farmer you would be able to think of plenty of reasons.

DYOR.

[wigwammer] 24/2/2015 09:21

Rupe - I suspect you're right. The div will come next year. But I also suspect the shares will recover as the comps get easier as the year progresses.

[rupe1958] 24/2/2015 08:36

Wigwammer - well, I hope you're right. it would be great if ACHL returned some cash or started a buyback, but I'm not optimistic.
Perhaps this time next year, if things have stabilised, they'll re-instate a small dividend.

[wigwammer] 23/2/2015 13:33

Rupe -The cash position is roughly double the market cap, and the co has a history of returning cash in the form of divs, special divs and buybacks. My impression from the conf calls is that the current lack of div is temporary, and related to exceptional costs related to the typhoon. A large proportion, roughly half, of the cash is required as working capital. The working capital requirement on a plantation business is very large - they don't get monthly revenues, just two crops produced a year. But of course fertiliser and other costs are taken every month, hence the need for substantial cash. The other half, plus free cash flows, can be divided up between bpg investment, Hunan investment, the current inflated levels of fertiliser required post the storm, and maintenance capex. But I'd still estimate they've got around £30m to play with. Some form of cash return would be a good way for new management to demonstrate they are aware of the undervaluation of the shares.

[rupe1958] 23/2/2015 13:15

wigwammer - you mention 'news on cash distribution'.
Is there a mooted cash distribution here? A share buyback programme would be more likely I reckon.

[wigwammer] 22/2/2015 20:34

Rupe -I agree - numbers will look bad, but the key is guidance and any news on cash distribution. This co has a history of divs, special divs and buybacks. Here's to hoping. During the last conference call, september 2014, they suggested it would take 3 years to get back to prior production levels. That doesn't sound so bad to me. 1) this was a 40p+ stock at prior peak productivity, 2) the new plantation and concentrate assets - which have seen massive investment - come into productivity over the next couple of years ie we should be looking to go well beyond previous peaks.Just a hint of good news could see this rerate very quickly.

[rupe1958] 22/2/2015 18:06

We get the H1 numbers to 31/12/14 this week.

I think these are going to make fairly grim reading. In the 6 months July-Dec 2013 ACHL made a core profit before tax of £4.5m. Revenue was £75m and costs before depreciation were £65m.

In July-December 2014 it looks as if revenue will be down at least 20% to £60m. This is because the winter orange crop at Xinfeng was poor and at Hepu it was disastrous. We also know from the trading update that the concentrates business has been disrupted and production is down by 17%.

On the costs side, there will have been significant repair and replanting costs at Hepu. Presumably there will also have been higher fertiliser costs. There will be some costs that are lower - e.g. labour (as there have been fewer oranges to pick and less concentrate produced), also less packaging used, less fruit bought in for concentrate.

But if we assume that costs before depreciation have risen by 10% (probably an under-estimate) then we get £71.5m, against revenue of £60m, which is is loss of£11.5m before depreciation.

If anyone out there who's following ACHL thinks this is too gloomy, then please say so. No offence taken. It may be that the company has been able to cut costs.

Luckily we have a large cash buffer and no debts. Cash at 30/6/14 stood at £180m, which will have now reduced.

On the positive side, hopefully there will be a mildly optimistic forward-looking statement.

This company was making £50-60m a year core profit only 3 years ago. There's no reason it can't get back to that and better.

[muffinhead] 13/2/2015 15:04

Maybe.........

weekly chart


supports Cantor missive


Not much action in London but a lot of stock changing hands at these levels in Hong Kong

Some speculative comfort knowing ACHL is already in the 90% club and everyone likes orange juice

[diku] 04/2/2015 08:20

Maybe the overhang clearing....

[muffinhead] 03/2/2015 21:58

Chaoda/Hugh were empire building few years ago



Chaoda Modern Agriculture (Holdings) Limited is a leading grower of fruits and vegetables in China

2/2/15

[piedro] 03/2/2015 18:40

Seems quite easy to spread the canker ....


Xiao Trading canker court case result disappoints Queensland agronomist
hxxp://www.abc.net.au/news/2015-02-03/citrus-canker-court-case-fines-disappointing/6066070

[the oak tree] 03/2/2015 18:29

Anyone any ideas why they sold the 17m shares?

I know its a difficult question to answer but worried anyone with that many shares will know what its looks like in the orchards right now and how management are dealing with the problems. Ofcourse it could be something else has come up they want to invest in or just de risk here? Feels like a forced sale, although they still have quite alot....at the moment.

ACHL just gives more bad news and if I do invest it won't be till they have issued some good news - am sure I'll still get a good price but at least I'll have less risk. Needing an optimistic board statement........

[fozzie] 03/2/2015 11:11

So approx 18m shares sold by Huge in the last few days, i wonder what they intend doing with the other 54m they hold? Looks like a double bottom at 6p and another buying opp.

[zangdook] 31/1/2015 02:57

From a quick google it seems "cryogenic rain" is Chinglish. It probably means hail. (I don't think it has to be sub-150; the dictionary just says "low temperatures".) I doubt that it's liquid methane, which it is in the only non-Chinese result on the first page:

[hugepants] 30/1/2015 18:53

"Quite, that one plantation seems to have suffered cryogenic freezing rain, high temperatures and drought all in one season. Not to mention the two typhoons at the other one. It seems like a pretty inhospitable environment to be trying to grow moss let alone citrus fruits and bananas."

Given all these risks you'd have thought they'd have taken out insurance!

[hosede] 30/1/2015 18:34

They always seem to put the gloomiest slant possible on their RNSs. Still better than gilding the lily I suppose,

[cordwainer] 30/1/2015 18:10

'bottom-fish opportunity'? More like a death-by-drowning fish.

[nehpets81] 30/1/2015 16:01

"Cryogenic usually refers to materials at temperatures lower than minus 150 celsius. Quite some rain they have in southern China."

Quite, that one plantation seems to have suffered cryogenic freezing rain, high temperatures and drought all in one season. Not to mention the two typhoons at the other one. It seems like a pretty inhospitable environment to be trying to grow moss let alone citrus fruits and bananas.

[rainmaker] 30/1/2015 15:46

Three Black Crows, Japanese Candlestick chart pattern not exactly accurate as occurs around the top after a rise. However we may well come back to 6p, personally I doubt it but I will add to my holdings.

[rainmaker] 30/1/2015 15:41

I'm really interested in the long term value of this business not its short term difficulties although without them we'd never get the opportunity to buy at such low levels.

regards

[rainmaker] 30/1/2015 15:39

Three Black Crows

[diku] 30/1/2015 13:13

6p again?...