China Biodiesel Share Discussion Threads

[woracle] 19/6/2008 22:30

SSssshhhh ;) I guess they will be rebalancing their product output a bit on this news and margins should more than just "stabilise"..

[lonrho] 19/6/2008 22:25

surely the chinese increasing diesel prices by 18% should have some effect here it certainly had a late effect on haik.

[woracle] 17/6/2008 23:02

Where did the assumption come from that that they use Soya. I doubt it..its more expensive than Palm oil even !

[jkershaw] 16/6/2008 11:31

Pro_better Do you know where they ship in their soya from?

Reason I ask - I DONT think this affects CBI immediately as they source locally but if global demand for soya increased and the global supply drops as a result of poor harvest below, this may impact down the line.

Would be nice to know how much of their feedstock is from waste and how much is gap filled by soya.

"Days of heavy rain over the Midwest eased some Friday, but thousands of acres of corn and soybean crops remained underwater in parts of Iowa, Illinois, Kansas and other Corn Belt states. The rains have pushed corn higher for 12 straight trading sessions, including seven consecutive record-breaking rallies."

[mokhan2] 12/6/2008 22:34

Thanks for the link Andy; v. interesting. Flexibility is very important in difficult environments; and so far CBI has tried to adapt; hope it reflects in the share price eventually.

What initially convinced me to buy and what keeps me in is CBI's intention to pay out 25% of profits in dividend to shareholders; Whilst at the moment it doesnt amount to much; if it keeps to its expansion plans could turn into a nice little income earner...

[jkershaw] 12/6/2008 11:20

I understood that they use a mix as the sourcing of waste oil is scarce and the supply chain is being built up.

[pro_better] 12/6/2008 10:13

they use soya...:)

[jkershaw] 12/6/2008 09:57

Very good, nice publicity on their approach which is ethical compared to other producers

China Biodiesel is able to make these different products from low-grade waste oils and fats thanks to a proprietary process (which is protected by several patents) and the use of a secret catalyst (the formula for which is known only to the company's chairman and chief technology officer). This means that the company has a competitive advantage over rivals that have to use virgin vegetable oils in order to produce similar products.

[jkershaw] 12/6/2008 09:54

Good article Andy

There is no question that there is plenty of demand for China Biodiesel's products since sales have grown significantly over the past two years – from Rmb69.7 million (£5.1 million) in 2005 to Rmb128.5 million (£9.4 million) last year. In fact, turnover in 2007 would have been even greater had it not been for last year's poor weather in South China forcing the company to delay building additional capacity at both its existing production site at Longyan and the construction of a new facility in the nearby city of Xiamen

Now that the construction of these extra production facilities is complete, Evolution is forecasting that China Biodiesel will increase turnover by 118% to Rmb281 million (£20.6 million) in the current year.

And China Biodiesel's chairman says that the company's management is focusing on sourcing feedstock in order to fill its expanded capacity. The business has already successfully secured new sources of raw material from overseas suppliers in Indonesia, Malaysia and the Philippines. "Currently, we are working hard to expand our supply base," says Ye.

Despite this, the company has had to delay the commencement of production at its Xiamen plant until mid-2008 due to the unavailability of feedstock, so Evolution is forecasting only a modest increase in net profit to Rmb18.1 million (£1.3 million) for 2008, compared with Rmb16.6 million (£1.2 million) in 2007. This translates to earnings per share for this year of 2.9p (2007: 2.6p). However, EPS in 2009 is expecting to increase to 4.1p as sales increase further and margins get better.

At 15p, China Biodiesel's share price is trading at just 5.3 times and 3.7 times EPS for this year and next. Such a valuation looks low when compared with other profitable cleantech businesses, and the price clearly reflects both the poor sentiment in the biofuels sector generally and China Biodiesel's own specific problems in securing enough raw material for its production plants.

But given that the management is making the sourcing of feedstock a key priority, the current share price could look cheap in the not-so-distant future. Evolution certainly thinks so, and the broker has set a target price of 30p each for the shares.

Lets see if CBI deliver.

[woracle] 12/6/2008 00:00

Thanks Andy. Strange that Evo forecast T/O RMB 281M for this year but profits of only 18.1M. Suggests margins gonna get a lot worse but that contradicts the move to biochems, and the stabilisation of margins at H2 reported in April. We shall see...

[andy] 11/6/2008 21:23

New article just out!

[woracle] 11/6/2008 16:23

Theres been flooding in S.China last week. Adverse weather is par for the course though so wouldnt surprise me if we get a few weeks delay.

I really doubt share price will move up if trials go well. Thats expected by the markets and not expected to fail. However if trials are delayed, I am sure it will get hit a bit.. but we are used to delays here :) Lets hope its not 12 months like last time. I think share price will only really move once 100K tonne is a reality and not a forecast in time x, and margins maintained.

[jkershaw] 11/6/2008 15:31

Thanks Woracle

August...hope that's not into season of typhoons...this company needs to make hay while the sun shines.

I would imagine if trials are going well the share price will start reflecting that before the announcement. mms always get the info before jo public. But who knows with this stock, its taken a battering (sometimes unfairly if compared to european producers..at least cbi are making a profit and not mothballing production)

Time will tell but your optimism bodes well as you predicted the down trend with accuracy.

[woracle] 11/6/2008 12:37

Last time at Longyan, progress was mid-June "construction almost complete" to end- Aug "completed trial production". Full production was expected sometime in Q4.

So I would think Xiamem trial to finish within next 2 months, ramping up to full production sometime Q4. Similar to Longyan.

I am hoping for an update in August saying Xiamen started production and we are in-line etc.

[jkershaw] 11/6/2008 11:15

woracle, I cant remember how long trial production usually takes before the green light to ramp up to full output. Any ideas when we could expect to see a bulletin?

[woracle] 04/6/2008 21:24

Chill..nothing much happened. The spread just got bigger. Bid fell so the MMs could screw a few bored traders, offer still same.

[woracle] 04/6/2008 09:07

steady as she goes. No bad news for once ! They still need to sort out their expectations .. Trial production starting today is not a few weeks from 21 april in my book but at least its getting better.

[ppowerscourt] 04/6/2008 07:37

Good Morning! I also liked management from very beginning. not back in yet.

RNS Number : 9150V
China Biodiesel International Hold
04 June 2008


China Biodiesel International Holding Co., Ltd.
AGM trading update


China Biodiesel is pleased to announce that it is today expecting to begin trial
production from its new plant at Xiamen in Fujian
Province. The start-up of the plant will double the company's annual design capacity to
100,000 tonnes, nearly four times last year's
output.
The company said that following progress so far this year the start of the new plant keeps
it on target to meet market expectations for
2008.
During the year, worldwide inflation in vegetable and animal oil prices has continued to
impose competitive pressures, but the company
has maintained its successful move to higher margin output through the increased production of
B1 and B2 biodiesels. These are used as a
substitute for petrochemical products in the manufacturing industries, and are free of the
pricing pressures imposed by government price
controls on diesel fuels. ,
The Company has also during the year successfully secured new sources of raw material
supplies from Indonesia, Malaysia and the
Philippines, and is planning to open new offices in South East Asia to underpin its
established supplies from domestic sources.
Chairman Huodong Ye said: "China Biodiesel continues to face the challenges confronting
the world's biodiesel industry, but we are
delighted to report strong progress with our further successful development in this
increasingly important market.

[mokhan2] 16/5/2008 20:56

I'v been v impressed with the management and how they've stabilised things in whats been a difficult situation; i lost i bit of money in the share price crash- but bought back in recently- the company has a clearly defined plan and management which, it seems, can implement it. Government support can only be a good thing as well. IMHO. Good luck to anyone else out there holding.

[woracle] 16/5/2008 17:07

On 21st April, they said

"With the impending start of production in the new plant in Xiamen, adjacent to nearby port facilities,the Company intends to keep purchase cost down through economies of scale and reduced transportation distance. Currently,
we are recruiting employees and purchasing feedstock for Xiamen Plant, which will commence trial production in a few weeks."

So trial production should have started. So there is a chance they will announce initial production at AGM in 3 weeks time. They will have learnt a lot from last years fiasco at Longyan so hopefully no delays this time.

[jkershaw] 15/5/2008 11:24

Neither Longyan or Xiamen are in the earthquake zone that has so sadly claimed so many lives.

[jkershaw] 15/5/2008 11:11

Found it...

(1) The first phase is to strengthen the industrial base in 2006 and 2007. The second plant, with 30,000 tpy in Longyan, is planned to be put into use in August 2007.

The new plant in Xiamen with 50,000 tpy is expected to be accomplished in the first half of 2008.

So all this needs is some good news

[jkershaw] 14/5/2008 15:12

MH, do you know what the eta is for the Xiamen plant coming online?

[mikehardman] 08/5/2008 11:32

sniff of upturn, after steadying after 23apr finals

...which showed pretax profit down 57% but that was largely expected; more to the point, cash generation was up 10% and turnover up 23%, it is paying a divi, margins are up/stable, confident outlook, 2 new plants have now been built and the most recent one ( Xiamen) is close to production - so with the large capex behind it, the future looks financially rosier;

also:
- it is using non-food-crops as feedstock, incl. recycled material - so it is much greener than many a biofuel stock
- it is getting govt tax incentives
- production is up and it is on-track to increase production to 100,000 tpa (5 times that when it came to market)
- good logistics (eg. costs low due to new plant being built at the port)