China Biodiesel Share Discussion Threads

[forest owlet] 06/11/2009 18:39

Precisely tim00 (re your post 1092)

[tim00] 06/11/2009 18:03

On your other point qip, the company is duty bound to inform the markets of price sensitive information. A profit warning that the market does not anticipate must be disclosed as soon as the company is confident not to get close to market expectations for profits. The rise in oil prices recently has triggered this situaton I guess, since there was no such undercurrent in the interim results.

[tim00] 06/11/2009 18:00

There are three types of financial assistance offered by the government. The traditional method, now of diminishing importance, is government grant. This is just a straight transfer of funds to the company (not a loan) which nowadays is to support research and development into new products. The most important assistance now offered is VAT rebates. The company pays value added tax, as do all its competitors, but bio companies get a substantial amount of the tax payments rebated. Finally, bio companies benefit from lower tax rates on their profits. At some point in the future, the Chinese authorities will also insist that a certain proportion of the country's total diesel consumption must be bio-diesel, but that may be a few years away. The conclusion is that on a 3-5 year view, this is a very very cheap share still!

[qipincha] 06/11/2009 17:09

I don't understand the company's intention to release a trading update at the moment. they were pretty quiet in history. unless someone want to grab share in cheap??? imo

[qipincha] 06/11/2009 16:59

how does the government fund work? I remember you mentioned it somewhere.
does the refund relate to sale volume?
more sales more refund?

[tim00] 06/11/2009 16:57

But they can't pass on the increased feedstock cost to customers, the margin between sales prices and feedstock prices is falling sharply. That should resolve itself at some time next year as the Chinese economy continues to expand and demand for CBI's products increases, allowing them to restore margins. I'm still confident this is a short term blip. In the medium term demand for bio companies' products will be regulated by the authorities.

[qipincha] 06/11/2009 16:48

Forest,
I don't understand, if the difference between the crude and feedstock is a constant, with the increasly of sales volume, the profit should be more.
unless the change of feedstock is significantly higher than the change of crude, I cann't see why their profit fall in H2.

[qipincha] 06/11/2009 16:45

anyone has forecast of biodiesel in 2010???

[madmonkflin] 06/11/2009 15:50

at least they're making a bloody profit.

[tim00] 06/11/2009 14:55

The price is bound to fall with a profit warning, in the absence of trades the market makers have to guess how to reprice the stock. The fact that buyers are coming in suggests they over-reacted and the share price is recovering a bit.

[qipincha] 06/11/2009 14:52

don't understand why price fall,
most of trading today are buys

06/11/2009 14:43:50 10.00 30,000 buy 3,000.00
06/11/2009 14:34:44 9.50 1,061 buy 100.80
06/11/2009 13:59:14 9.50 10,526 buy 999.97
06/11/2009 13:57:16 9.00 2,000 buy 180.00
06/11/2009 13:55:54 9.00 5,417 buy 487.53
06/11/2009 13:49:12 7.60 2,000 sell 152.00
06/11/2009 13:48:36 7.60 10,000 sell 760.00
06/11/2009 13:48:25 8.00 6,125 sell 490.00
06/11/2009 08:31:01 11.50 3,000 O 345.00

14:23 9.50p 2,100 £200 Buy O
14:16 9.50p 5,132 £488 Buy O
13:54 8.00p 10,000 £800 Unknown O
11:29 12.75p 8,500 £1,084 Buy O

[qipincha] 06/11/2009 14:50

the feedstock issue: some companies are making plants in order to control the feedstock price. though it takes time.

I have read some news, a lot bio companies can not survive in economic down turn. guess this will lead to less competitors to cbi

[forest owlet] 06/11/2009 14:39

They can't. Feedstock prices rise roughly in line with crude. Where crude goes so will their feedstock prices.

Earnings will recover as demand for products recovers in China, and currently there is over supply and weak pricing power both for oil refiners and 'biodiesel' producers.

[qipincha] 06/11/2009 14:34

the company should resolve the feedstock issue in order to improve business performance in the future.

[forest owlet] 06/11/2009 14:26

Anyone investing in CBI would do well to follow the fortunes of China's conventional oil refining sector very closely. The fortunes of biodiesel and oil refining in China are quite closely linked, as I have said before, and oil refining has been in trouble since July. The subsidy aspect of biodiesel is helpful to earnings, but does not cause this relationship with the fortunes of the refining industry to disappear.

[qipincha] 06/11/2009 14:24

if cbi has encounter high feedstock. other companies do, too.

2008 profit 0.09 CNY , around 0.8p
2009 H1 profit 0.132RMB, (roughly 1.2p),
2009 profit >2008

[tim00] 06/11/2009 14:15

I'm now projecting one million RMB profit in H2, equivalent to 1.4p per share for the full year.

[tim00] 06/11/2009 14:12

Long term I'm still confident, the sector has strategic value to the Chinese government. Clearly however the company finds it difficult to recover the higher costs that arise when oil prices shoot up and increase the cost of feedstock.

[mikeja] 06/11/2009 14:00

Oh well,can't win em all.

[jailbird] 06/11/2009 13:55

so still profitable 1st half and overall full yr.

[tim00] 06/11/2009 13:50

news just out, very disappointing really and a surprise. The recovery is going to take longer than anticipated. Still, they remain profitable.

[qipincha] 03/11/2009 01:20

the petrol price expect to be increased by 10% on 6th of Nov.
keep an eye on news

[qipincha] 30/10/2009 16:29

it's actually very handy, everything I need is in one page

[buggy] 30/10/2009 15:32

Next news early next year, Feb at earliest probably.

This company is not known for raft of news flow. They quietly get on with the job.