Yinggao Share Discussion Threads

[mattjos] 07/6/2010 15:07

Spent some of this weekend trawling this one:

i make it currently trading on a historic p/e of 9 (after deducting the exceptional gains), cash in the bank, Balance Sheet cleaned up & some old liabilities now gone, some very big expansion plans in the pipeline (funded out-with the companies cash by the majority shareholder).

H1 09 they only had 7 barges ... FY09 they had more than 7 barges but we don't know how many more & in FY10 they will have that figure + 10 more barges.

Quay expansion during FY10 will be funded organically now that all the permissions are in place & the capital equipment will be funded in conjunction with their existing partner on this sort of kit..

The expansion and modernisation of the fleet will enable further economies of scale and i'd expect the gearing effect to come thru to the bottom line quickly (as witnessed i nthe FY09 figures). I made it a 1:1.6 gearing effect of revenue:profits from increased volumes on the shipping ops.


Forward p/e's of 10-20 in the sector are not uncommon.

Some basic research on the web will show they are in an excellent location

The granite quarry is sat there as a sleeping asset at present but they have gone from 60% to 70% ownership in it over the years and i don't imagine it will sit there forever ... will either get sold or they'll get it open & producing cashflow as per the DCF valuation given to it a few years ago.

Looks well set to me and reasonably priced

[zangdook] 07/6/2010 08:40

Total turnover since results 611781, looking like 383493 bought and 228288 sold.

[damanko] 07/6/2010 08:32

Morning folks. Just back from France, 10 days without Net access, so just read this morning recent events at YGH, and notice a pleasant uplift on Friday, in an otherwise depressing market.

Still digesting the RNS / results, though look okay at first glance. As we know ffree float in the region of 7%, so I'd have expected a bigger uptick on the news. Last year this shot over tuppence.

[davydoo] 05/6/2010 18:16

Thanks Mattjos. I think youre right re the recurring revenue to the trust from leasing the barges, should actually be a win/win transaction.

I agree that the cash position looks ok, and I was amazed their payables averages 12 days, especially after tales ive heard about payment delays within other chinese companies like CHNS and GNG. At best they may get better rates and better service and at worst they can extend out a little and still be fine.

I like the clearout, maybe they should do the same with the equity, along the lines of what FDT did this week. Virtually 2 billion shares trading at 1p seems mad to me.

[mattjos] 05/6/2010 16:13

Davy ... Good points & I noticed them all too. The FY results compared to H1 suggest there has been an enlargement of the barge fleet and the metrics show a leverage affect on Revenues & profits relative to costs as volumes increase. I would expect this to further increase as the barge fleet is enlarged and renewed on the basis of economies of scale. The rate of expansion is very significant - a trebling in size in 2 years.
The fact that the majority shareholder is funding the acquisition of the barges is a + point although it is important that the leasing arrangements are negotiated on an arms length basis, i acknowledge.
In terms of the majority shareholder's intentions ... going back over years of accounts there is recurring intent in the FY results commentary that they are keen to find a partner to work with on growing the business .. assuming that intent remains the case then, I concluded (until i determine otherwise) that any equity sale by the majority will be to an as yet to be identified partner in the business.
That could seem a potentially attractive arrangement for a third party as the business has the patronage of the Dynasty fund & the access to barges for expansion from this source. The partner might be willing to pay for a slice of the cake and the Dynasty fund has the recurring revenues from the leasing arrangements to ensure future revenues for the beneficiaries.
For now they seem to have had a good clearout of the company affairs .. dug-up and got rid of the skeletons so to speak & the Balance sheet is much better for it.
There are several references to anticipated solid/rapid growth this year in the statement & immediate cash needs seem catered for. The handling operation profits will fund the land-based assets & the Dynasty fund the sea-based assets .... looks well set-up to benefit from growth in container shipping as the world recovers & the 'for-free' sweetener is the quarrying operation, currently lying idle but in a nice location & with no value attributed to it in the price at present.

[davydoo] 05/6/2010 16:01

Wow you must like your penny shares Battyman2. I've never heard of any of them.

[battyman2] 05/6/2010 15:53

Anyone got an interest in LED, ABH or CNR ?

[battyman2] 05/6/2010 15:51

Mmmm thanks for that davydoo.

Looks like one will have to be wary of this one until more light is shed on what's going on or if of course it gets lots of attention from PI's

[davydoo] 05/6/2010 15:43

I picked out these lines from the annual accounts;

-retirement of Qin Shun Chao in September 2009

-Mr. Qin sadly passed away in March 2010

-The Chin Dynasty Fund is a discretionary trust where Mr. Qin Shun Chao is the settler

-Members of Mr. Qin's family are the potential beneficiaries of the trust.

I cant see any announcements of family intentions, is anyone aware of any?

This stock seems a great prospect, but im wondering why they need a London listing when the trust virtually controls it all anyway, but on the flip side could there be a flood of shares sold to the market to settle family claims.

Ive been aware of RCG another chinese stock heavily effected by the death/will of the major shareholder, and the legal wranglings that have followed.

[davydoo] 05/6/2010 15:26

This worries me a little;

The Group will benefit from the plan of its majority shareholder to construct around 10 vessels each with a capacity of 228TEU each year. These vessels will then be leased to the Group.

For me there is an inherent conflict of interest in this kind of transaction, in terms of what rates are charged, and who benefits more. Its one I have expereinced with Skywest, an Australian airline, and Avation, a leasing company with the same management that lease planes to Skywest.

Its all about understanding lease arrangemnts and the impact to your investment. Avation is actually my largest holding.

[davydoo] 05/6/2010 15:21

This statement is wonderful;

We disposed of badly performing subsidiaries in September 2009, resulting in a gain from disposals of US$6.6 million. As we indicated at the time of that disposal this had the double benefit of removing a non-profit generating business whilst setting aside liabilities that sit in the disposed group.

So many positives in one sentance, seems like a business oxymoron.

Looks like all the gain was spent on property plant and equipment, but I havent got to what yet.

[davydoo] 05/6/2010 15:15

Just started looking at this. The shares traded below their par value for about 3 years. Ive never seen that before, without some sort of re-organisation of the share capital.

[battyman2] 05/6/2010 11:07

Am I reading the results correctly??

From what I read, they have made a nett profit of 9 million dollars against a loss of 5 million last year?


And yet the share price is 1.2 pence ??????

[battyman2] 04/6/2010 16:25

can buy up to 250k at 1.3p

[camy] 04/6/2010 13:43

In due course it will no doubt find its true market value which looks to be a lot higher than we are at right now. Long term holders knew this was coming as evidenced by:

tomboyb - 19 Jan'10 - 09:46 - 261 of 281

3,950,000 buy at 1.15p.

andrbea - 19 Jan'10 - 10:16 - 262 of 281

that is 45000 quid's worth

....

[moormoney] 04/6/2010 11:17

I agree it spiked up on the last set of results in oct and then drifted back down. I hope they keep news flow going now.

[mattjos] 04/6/2010 10:53

I think they are trying to get the market's attention again today with this RNS ... after hours yesterday was maybe not the best time to let the UK know how well they have done in 2009.
It's not strictly necessary to re-issue the figures accompanying a simple time correction on the AGM . more like a shout to say "Wake up Market .. we have a good story to tell you - have a read now you are all watching".

How to help get heard amongst the crowd is really the broker's job though.

Let's see if it is picked up any better this time

[moormoney] 04/6/2010 10:30

I've been stuck in these for years and now at last the co has turned the corner after very nearly going under. It has been a real tale of woe but always with solid core assets the chinese are not good at communicating with shareholders but definitely worth waiting for. difficult to buy in any quantity and I think the bod should release more shares to the market now to help liquidity. I'm happy to wait!

[mattjos] 04/6/2010 10:11

needs a bit of digging into over the weekend i feel but at first blush the results are impressive. as already posted .. any buying interest, with over 90% of the stock tied up, might quickly result in upward movements. for now it seems the after hours nature of the results and the current market lead this to remain virtually invisible to any new investors but i rather like the look of it so far.
The figures are such that the broker ought, at least, to renew their market guidance on the company

[mattjos] 04/6/2010 08:32

that is what i thought. seems totally invisible at present this one.

[andrbea] 04/6/2010 08:31

2480 pound buy
up 23%

looks to be highly illiquid
pity there aren't more buyers

[andrbea] 04/6/2010 08:27

great results


A combination of increased revenues, continued high gross margin and strong
control of costs resulted in a profit after tax of US$3.0 million excluding the
exceptional items of US$6.6 million, an increase of 200% compared to the prior
year (2008: US$1.1 million).

[camy] 04/6/2010 08:18

Looks like there is considerable expansion on the cards: "The Group will benefit from the plan of its majority shareholder to construct around 10 vessels each with a capacity of 228TEU each year. These vessels will then be leased to the Group."

10 new vessels each year !

[william-just] 04/6/2010 07:14

Is the company hopeing to keep this under the radar.