China Biodiesel Share Discussion Threads

[forest owlet] 06/10/2009 08:55

Demand/selling prices for all fuel products in China are relatively weak at present, and I believe that will include CBI's. I believe margins may be weaker than in 2Q09.

I very much doubt that CBI will be able to grow the rate of production greatly in 2H compared to 2Q09. I do not agree with forecasts of 30k tons or more in 2H.

Government backing is great as it goes, in that there is a big insurance against serious losses (although the new cap system does the same for refiners like HAIK in effect), but that does not seem to give CBI a much higher forward PER than HAIK for example. 2009 PER for CBI is currently only 3.75 based on conservative earnings of 3p. Only 2.25 if you think earnings will be 5p.

[qipincha] 06/10/2009 07:40

HAIK share price is 49p!!!???
no clue
something else determine share price

[mikeja] 06/10/2009 06:59

CBI does not produce diesel.97% of its product is other material.What the interim figs show is that production is accelerating rapidly,it produced almost as much in the last 2 months as in the previous four.
The key is strong gov backing which is why last year it produced a profit rather than the huge loss of HAIK.

[tim00] 06/10/2009 03:31

Hyper Al, neither, my post 674 reprinted. Feedstock (ie waste vegetable oils etc) suppliers will be fish and chip type shops!

Just had a very nice reply from the CFO to a query about the company. She is very approachable (reply takes a few days). In brief, the company secures feedstock from a very large number of small firms in the region (together with overseas suppliers). They are reliable suppliers, but it takes time to grow the network. My reading is that it will therefore take a little time to increase production to the company's full capacity of 100k tonnes, irrespective of demand for the company's products, and going forward the company can not just expand at will given this gradual development of its network of feedstock suppliers. So growth will be steady rather than dramatic.

[qipincha] 05/10/2009 23:52

Tim and Forest,thanks for your reply

I will not be able to trace share price tomorrow

keep an eye for me :)

[hyper al] 05/10/2009 23:38

From their website

"The leading product is Biodiesel, a renewable, non-fossile fuel alternative to mineral diesel. It is produced from a variety of oils including used cooking oil or any animal or vegetable oils in origin."

Do they manage crops or use oil from crops grown for biodiesel production?

[forest owlet] 05/10/2009 23:28

I think the long term view is the best one to take qipincha. In the long term CBI will likely do well imho. We just need to see a more sustained recovery in demand both globally and in China. It will surely come, in time.

[qipincha] 05/10/2009 21:59

hi Forest

I think CBI can be one of the share that I will hold for a long term,
although it went down in the last week.

it is right that share price changes with RNS. however, no point 4 me to sell it at low and buy it back at high.

I will wait for its annual report if no trading update before that.

anyone with me?

[tim00] 05/10/2009 16:19

still here! Nothing to say at the moment, though I've sent the FD a query and will post her reply when it comes in.

[forest owlet] 05/10/2009 16:17

I think long term CBI has a good potential, but I think there will be fluctuations in earnings and output along the way, as with Chinese oil refining.

I have been to China a lot, and I am sure diesel demand will recover longer term, but the share price of many AIM companies moves on short term news and outlook, and I am not confident 2H09 earnings will be triple or quadruple 1H as some think.

I think the figures for diesel to end September, when available, will show the gap between output and consumption widening further.

[qipincha] 05/10/2009 15:41

hi tim,

are u here???

[qipincha] 05/10/2009 15:38

1.I know chinese government control oil and diesel price, however
cbi is focusing on selling bio-diesel to other countries, not china...which I think will significantly reduce the impact

2.the first half year report includes the period from Jan to June. The balance sheet is in line with my expectation. Both selling price and cost fell 41%. however, bear in mind, the Xiamen plant has been closed for a few months just after it opened, so the operation cost was extremely high, and "facility running at low level" compare to previous year. That is called a recovery period, not a profitable period. From second quarter, the situation is improved slightly and this trend will keep going, imo

I can give you some information of china diesel consumption in 2009, from Jan to July:
Production: 77,537k ton
import: 1,253k ton
export: 2,573k ton
consumption: 76,216k ton
production/consumption = 101.7%. Although the production is more than consumption, the difference is not significant. Plus, this figure is better than the figure 101.9% from Jan to May. If you have been to china, you will understand that the consumption of diesel and petrol can only go up. However, the resource is drying out.
the diesel consumption expect to be 14,000k tons/year by 2010.

Regarding the price of diesel, the price has been changed 7 times this year. The current price is 6,870RMB/ton, which was 4150 RMB /ton in March 2009.

The current PE of cbi is only 4+, a extremely low number. CBI is making profit with low level of debt while other company is making lose and hugely in debt. To me, it is a low risk investment with high potential. I hope you have same view as I do

[forest owlet] 05/10/2009 14:43

Only if 2H09 is going to be a lot better than 1H09. What evidence do we have that that is the case?

Oil refiners in China are suffering from weak demand (especially for diesel), over-production of product and correspondingly high refined product inventories. After a profitable 1H, margins have been negative for much of Q3 in much of the oil refining sector owing to product selling prices not keeping pace with rising feedstock prices.

Will not this also be impacting CBI? I notice the last results said that feedstock prices rose in line with selling prices in 1H09. Could they have somewhat overtaken them in Q3? And could biodiesel demand growth in 2H be weaker than some posters here expect?

[qipincha] 05/10/2009 13:38

extremely undervalued...

[qipincha] 02/10/2009 17:27

terrible spread!

[qipincha] 02/10/2009 12:19

Very strange to see price dip with no RNS, trading level is quite low

Time Price Volume Value Buy/Sell Type
15:32 12.00p 25,000 £3,000 Buy O
14:42 12.00p 2,500 £300 Buy O
13:52 11.50p 13,000 £1,495 Buy O
13:52 11.00p 75,000 £8,250 Sell O
13:44 12.00p 6,500 £780 Buy O
13:18 12.00p 8,210 £985 Buy O
12:25 12.00p 2,100 £252 Buy O
12:11 11.70p 15,000 £1,755 Buy O
12:09 11.45p 10,000 £1,145 Buy O
10:52 12.00p 3,000 £360 Buy O
10:19 13.40p 15,000 £2,010 Buy O
10:19 13.60p 20,000 £2,720 Buy O
10:18 11.75p 75,000 £8,812 Sell OK
08:45 12.50p 10,000 £1,250 Sell O


Trade Date Trade Time Price Volume Type Considerations Conditions
02/10/2009 16:06:31 11.25 25,000 O 2,812.50
02/10/2009 13:39:27 12.00 100 O 12.00
02/10/2009 12:14:16 11.95 11,000 O 1,314.50
02/10/2009 11:53:36 10.00 37,694 O 3,769.40
02/10/2009 11:48:13 12.00 1,041 O 124.92
02/10/2009 11:29:40 12.00 2,188 O 262.56
02/10/2009 11:14:41 12.00 10,000 O 1,200.00
02/10/2009 10:36:06 13.00 1,000 O 130.00
02/10/2009 10:21:23 13.00 2,000 O 260.00
02/10/2009 09:58:35 12.00 2,814 O 337.68

[tim00] 30/9/2009 08:42

Thanks Mikeja, that's interesting re grants. However, it does appear that grants fell sharply in 2008 H2 compared with 2008 H1, and were down in 2009 H1 compared with 2008 H1 as well, despite flatttish/rising production. I'll wait to see when the full year results are announced....I don't think the dollar will hit parity with sterling, but I do think the RMB will strengthen independently of the dollar. As you say, a definite plus for Chinese shares, making future dividend payments worth more to UK share holders. I think dividend payments might even resume following the full year results, which would definitely boost the shares.

[mikeja] 29/9/2009 21:41

Tim,CBI has already said the bigger the production,the bigger the grants,it is not a question of support.When CBI get to 100k tns,gov grants+ VAT rebates cld reach RMB 100m.Incidentally have seen some recent ideas that the £ may go to parity with the $,as it did in 1985,following a big bull mkt for the $.If the RMB remains tied to the $,we could see huge gains in Chinese stocks quoted here,who knows?

[qipincha] 28/9/2009 23:30

cann't see why share price go down
share holding is very tight
only a few trading on lse

Time Price Volume Value Buy/Sell Type (key)
15:56 13.75p 13,000 £1,788 Buy O
14:33 13.75p 3,535 £486 Buy O
14:04 13.75p 3,535 £486 Buy O
09:24 13.75p 10,000 £1,375 Buy O
09:01 12.50p 30,000 £3,750 Sell O

on plus market
28/09/2009 09:27:46 13.75 8,000 O 1,100.00
28/09/2009 09:08:30 13.75 3,636 O 499.95
28/09/2009 09:02:25 11.50 5,000 O 575.00
28/09/2009 08:42:35 12.50 6,500 O 812.50

mm's trick

[tim00] 28/9/2009 07:48

SKR is a strong tip, share price should rise sharply today

[qipincha] 27/9/2009 09:07

thanks mate,
i will do more research on it.
btw, any other shares can be invested these days?

[tim00] 27/9/2009 07:56

Presumably past acquisitions.

[an78] 27/9/2009 00:58

any idea how they have this goodwill figures?

[an78] 27/9/2009 00:43

I have looked their debt,looks their debt level is reduced and looking at their previous annual report, seems their debt level is on similiar level since 2006.

"Cash flow and net debt
Cash on the balance sheet at 11 April 2009 was £15.3m (2008: £16.9m) and, as expected, reflects a decline of £12.4m from the balance at the previous financial year end (27 September 2008) of £27.7m. This reduction reflects: (i) the seasonal nature of the business, particularly the Leisure Division where the majority of cash is generated over the summer and (ii) costs relating to the exit of the Pubs Division which are in line with expectations.
Cash generated from continuing operations (before capital expenditure) was £7.9m (2008: £16.9m). The decline is due to the fall in operating profits and a working capital swing of £4.9m which is expected to unwind in the second half. Net capital expenditure was £10.9m (2008: £13.4m) and net interest absorbed a further £3.6m (2008: £3.3m). During the period the Group repaid £1.4m (2008: £2.9m) of senior debt. In the comparative period, the Group increased its debt facilities by £4.8m, paid the previous year's final dividend of £4.7m and made an income tax payment of £1.1m. Each of these items are nil in the current year. In summary, the cash outflow from continuing operations was £8.0m (2008: £3.7m). In addition, the Group incurred £4.4m in cash costs in respect of Pubs exit expenses (2008: £12.5m).
At the balance sheet date the net debt for the Group (excluding Convertible Preference Shares) was £66.0m (2008: £77.5m). This represented bank borrowings of £83.6m (2008: £96.3m), offset by capitalised debt issue costs of £2.3m (2008: £1.9m) and cash of £15.3m (2008: £16.9m). "