Eco Animal Health Share Discussion Threads

[cerrito] 09/1/2023 09:10

Given the ANP news this morning especially with reference to China was expecting a slight fall here but of course the current EAH share price has alot of bad-even if transitory - news baked in.

[waldron] 10/12/2022 15:54

First must convincinly break thru resistence at 127.60p

[topvest] 10/12/2022 14:36

Yes, starting to break-out. Not surprising if China sales are recovering. It should be £2 ish.

[tradertrev] 05/12/2022 21:53

Another nice move today!

[aimingupward2] 30/11/2022 15:28

Encouraging to read that the CEO roughly doubled his holding in EAH yesterday, adding 20,334 shares at 98p.

[topvest] 28/11/2022 13:25

This is really a business that makes a > £10m profit per annum, but its choosing to reinvest the cash on R&D. Aivlosin must be worth £200-300 million pounds given it will soon generate c£100m sales and c£45m of gross profits when China comes back on stream. I am surprised that Elanco don't buy the company at this valuation and with the US$ strength, but maybe there are regulatory implications.

I do feel that there is a good chance that this years results will overshoot expectations as the China bounce back in the pig market could be much stronger than envisaged, particularly given its starting from such a low base and we are into the seasonally stronger winter months. Anyway held this at nearly £7 at one point, sold out and now back in again. I see that Amati have picked up 3.2m shares in June which is probably a good sign as well. I am surprised Harwood or some other activist shareholder is not running their eyes over this little hidden gem!

To be balanced there are risks as well - they obviously fell out with BDO after 3 years of restated results and audit issues. Its a complicated group to account for. This is a bit of a red flag, but I don't think there is anything too sinister, just not top draw accounting.

Anyway, the new CEO appears much better than the last one. They have struggled since Peter Lawrence retired, but at least he's held onto his 7m shares and only sold shares at much much higher prices. I fully expect this to double or triple from here, but could x5 if the market starts to appreciate the strength of the R&D pipeline. A bid is also a possibility as Aivlosin would clearly be very profitable to a global pharma with an existing distribution network (i.e. c£11m of cash overheads could be eliminated).

[tradertrev] 28/11/2022 12:59

Very encouraging presentation on the sustainability of Asian and LatAm growth plus the recovery taking hold in the China business. Have topped up.

[topvest] 28/11/2022 10:26

I've purchased a few of these today. It looks very well placed for recovery into 2023. If the R&D cost is added back, and assumed of no value, this has to be worth a minimum of c£200m.

[aimspec] 25/11/2022 15:03

Albeit much more of a one product company, historical CG issues, - 0.7x EV/SALES is an absolute bargain. Elanco (burden by debt); 2.5x. Zoetis 8.9x.

China will grow from here. ROW doing strong helped by strong dollar. Management reaching out doing presentation. Review likely to result in more focused R&D. Zero balance sheet risk.
Some rational in speculating in take out here. Obviously buying a business listed at 0.7x sales when you trade more 10x higher can only be accretive with overlapping footprint.
But you never now when timing is right for these things to happen. Can only assume a traditional healthcare take out premium of 40-60% won’t cut it here.

[waldron] 24/11/2022 08:07

Dividend

The Board recognises the value of dividends to shareholders and balancing the need for prudent management of cash resources as well as funding the exciting pipeline of new products. It has however decided that the best use of the Group's cash is in the new product development initiatives and accordingly no dividend is recommended at the current time.

Auditors

The Company announced on 14 November 2022 that BDO resigned as auditors to the Group and we are delighted to have appointed Haysmacintyre LLP to be the Group's auditors. Transitionary arrangements are underway, and we look forward to their first audit for the year ending 31 March 2023.

Change of advisers

The Group also announces that from 23 November 2022, Singer Capital Markets and Investec, will be retained and will act as the Group's nominated adviser and joint broker, and joint broker, respectively.

Outlook

The China pork price has improved from less than CNY13/kg in March 2022 to in excess of CNY27/kg by the end of October 2022. This increase in pork price prompted the Ministry of Agriculture to release frozen pork onto the market ahead of the National Day on 1 October - the first time it has done so during 2022. The Group has experienced improving trading conditions in China with October's revenue greater than any other month recorded during this financial year. Whilst this is a promising start to the second half, we remain cautious on China's revenue recovery until January 2023 and the period of strong pork demand associated with Chinese New Year and national holidays. The containment policy in relation to COVID also provides short term reason to be cautious regarding pork demand.

We expect continuing growth in our markets outside of China. Seasonally occurring disease is anticipated to drive demand in the second half of the financial year. This seasonal effect, together with expected stronger trading in China in our fourth quarter is expected to result in the customary second half weighting to our revenue. In the event Sterling weakness continues, this would provide further upside in revenue opportunity. Cost control in relation to manufacturing costs has served us well during 2022 and we are cautiously optimistic in relation to the 2023 contractual price negotiations.

The Board is excited about the continuing results from our new product development programme and we look forward to providing an update at a Capital Markets Day in the first quarter next year.

We look forward with cautious optimism to reporting the full year numbers in line with market expectations.

Dr Andrew Jones

[ga_dti] 24/11/2022 08:03

Latest CEO interview discussing results highlights, improved Chinese pork prices, new product developments, new R&D collaborations and what investors can expect between now and the Full Year results -

[edmonda] 21/11/2022 15:37

Interim Results - investor presentation (28th November - save the date!)

ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, is pleased to confirm that David Hallas, CEO, and Christopher Wilks, CFO, will be conducting a live presentation covering the company's Interim Results.

The online presentation will take place on Monday 28th November at 10.00am.

This event is open to all existing and potential shareholders and registration is free. Questions can be submitted during the presentation and will be addressed at the end of it.

Sign up to register here:

[simon gordon] 18/11/2022 20:40

It's at a historic support point.

Quarterly chart:


free stock charts from uk.advfn.com

[cerrito] 18/11/2022 20:18

Can anyone explain the decline?
Sure £ stronger than 6 weeks ago but at $1.19 still week over a 3/5 year period.
Share trading volume not abnormal.
Chinese pig prices continue strong at 25 rmb a kilo.
My reading is that AFS is not a big issue globally at this time.
I see GNS which is not a real comparator has had a very good fortnight. The price of ANP is low over a 2/3 year period but has recovered from the battering it took 6/8 weeks ago.
Perhaps the answer to my question is that there are many like me reluctant to buy even at the current reduced price.

[simon gordon] 30/10/2022 08:30

Cerrito,

One would hope that Kemi B and the Tories are awake to the changing world but to date the party looks captured by Hard Brexiteers. In that, ideology trumps economics/business. The same thing has happened in Russia and China. Let's hope the UK comes to its senses, either by the Tories changing their mind or a new government in Labour, who are more awake.

Here's the writer of that piece being interviewed on YouTube:

Bankless Show - 17/10/22

Noah Smith is a writer economist, with fiercely independent takes that he articulates with precision and clarity. We see him as a knowledgable crypto outsider, which is a rare trait we've seen throughout the posts on his blog, Noahpinion.

In today's episode, we cover geopolitics in broad strokes—Noah thinks we're already at war in the form of an economic showdown between the New Allies and New Axis.

[sarkasm] 30/10/2022 08:28

support 89.50p

[sarkasm] 30/10/2022 08:27

Consensus

Mean consensus BUY


Number of Analysts 3


Last Close Price 100,00 GBX

Average target price 226,67 GBX
Spread / Average Target 127%

High Price Target 270,00 GBX
Spread / Highest target 170%

Low Price Target 164,00 GBX
Spread / Lowest Target 64,0%

[cerrito] 30/10/2022 07:46

Thanks simon gordon for that v good article and I would encourage others to read it. I have been thinking on the same lines and no doubt Kemi B and her colleagues in the UK Trade ministry are pondering this. If things do pan out as suggested in the article, the UK will need to revisit its decisions ref the single market.
That all said it has limited relevance to EAH. If indeed the concerns of the US Admiral are borne out and there is Chinese military activity on Taiwan which provokes sanctions (either trade or financial) where does that leave EAH given that the secret sauce for Aivlosin is made in China as I understand it??

[simon gordon] 28/10/2022 11:40

Cerrito,

You might find this article of interest! Good luck!!

Noah Smith - 26/10/22:

The end of the system of the world

A critical point has been reached; decoupling is for real this time.


This is a big-think, “sweeping overview” sort of post. I find myself writing more of these recently, not because there aren’t little interesting news items or econ papers or debates to focus on, but because big things are happening very fast in the world right now, and I want to try and keep track of them.

The system of the world, 2001-2021

After the end of the Cold War, the United States forged a new world. The driving, animating idea behind this new world was the belief that global trade integration would restrain international conflict. At first this rested on a Fukuyama-type “end of history” theory that political and economic liberalization would follow globalization, but as it became clear that various bureaucratic one-party oligarchies and petrostates (most notably China and Russia) were resistant to the end of history, the hopes for trade became more modest — at least countries that depended on each other economically would not fall into active conflict.

We didn’t just pay lip service to this theory; we bet the entire world on it. The U.S. and Europe championed the admission of China into the World Trade Organization, and deliberately looked the other way on a number of things that might have given us reason to restrict trade with China (currency manipulation in the 00s, various mercantilist policies, poor labor and environmental standards). As a result, the global economy underwent a titanic shift. Whereas global manufacturing, trading networks, and supply chains had once been dominated by the U.S., Japan, and Germany, China now came to occupy the central place in all of these:

As of 2021, China’s manufacturing output was equal to that of the U.S. and all of Europe combined.

There were were always those who fretted about this shift, but too many people were just making too much money from it to upset the apple cart. U.S. manufacturers boosted their profits — and at least on paper, their productivity — by outsourcing production to China, while retail outlets (and consumers) benefitted from a flood of cheap imports. American companies grew their profits massively from grabbing mere slivers of the vast Chinese market, and salivated over the possibility of more. The finance industry reaped the benefits of cheap capital inflows as China bought U.S. assets in order to hold down the value of the RMB in the 2000s. Knowledge workers in the U.S. and Europe benefitted from researching, designing, and marketing the products that China built for us. Production workers in rich countries lost out big-time, but this was a price our country was willing to pay. America and our rich-world allies went from being the world’s workshop to being the world’s research park, and the people who had been our factory workers became the janitors and cooks and security guards of that research park.

Continued.....

[cerrito] 28/10/2022 11:33

I have for me important holdings in 2 AIM companies whose share prices are struggling and for whom China is important and indeed both companies are making investments there.
One is EAH an agtech business with a long track record in China and whose business is improving pig health which will help keep pork prices low- a key issue for the CCP. The other is CWR which is in a start up phase in China and in partnership with an important Chinese company. It is in the clean tech business and will have the effect of reducing urban pollution-another key issue for the CCP.
I have been aware of the Chinese country risk but given both companies’ activities are in line with CCP policy I have been relaxed.
Given all the recent noise about a possible invasion of Taiwan(although I note that the comments on Taiwan to the Congress last week were muted) and the subsequent sanctions I am asking myself if I want to buy more shares in either company. I appreciate it sounds outlandish that China would invade Taiwan in the foreseeable future but it would have seemed outlandish this time last year if I had suggested that Russia would invade Ukraine.
In the reports I read of the Congress there was no explicit hostility to foreign capital.
I take comfort from the fact that Chinese leadership seems more rational than Russian and of course if such an invasion was to occur the market reaction would be mega serious.
Just something else to think about

[cerrito] 10/10/2022 10:47

A post on the GNS site refers to an FT article on high pork prices in China which I cannot find but suffice it ti say that pig prices at about 23 cny per kilo have been rising

[cerrito] 26/9/2022 23:52

I see that over 70% of the shares were voted at the AGM today. This is a very high voter turnout for an AIM company and reflects the high institutional shareholding and good that they are sufficiently involved to vote.

[cerrito] 25/9/2022 21:00

Not practical for me to make the AGM tomorrow and appreciate any input from anyone who can make it.