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Nostradamus Supreme	22-Oct-2006 20:11        Nostradamus About Contact  Quote this Post!
x 0   x 0  Alert Admin	Potatoes are now considered as a high-valued crop and a vegetable in China. Demand for potatoes has been growing when other bulk commodities, such as rice and wheat, have seen demand declining. Consumption has gone up by more than 40% over the past five years, compared with a 2.45% global rate during the same period. Domestic production has kept pace, making China the world?s largest potato grower and largest consumer by volume. French fries are one of the big reasons. China now eats more than 90,000 tons of frozen fries each year, 70% of them imported. According to a recent Rabobank report, China is expected to gobble 20% more potatoes in the next five years, a testament to the growth of the country?s fast-food restaurants.
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cashiertan Elite	10-Oct-2006 23:11        cashiertan About Contact  Quote this Post!
x 0   x 0  Alert Admin	agree. looks good.
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allantanhc Veteran	10-Oct-2006 12:54        allantanhc About Contact  Quote this Post!
x 0   x 0  Alert Admin	Just to add that both MACD and Stochastic have crossed over on 5 Oct lending further evidence that it is a good time to buy.
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allantanhc Veteran	10-Oct-2006 12:49        allantanhc About Contact  Quote this Post!
x 0   x 0  Alert Admin	I have gone in to study the chart of Chinese Essence following Nostradamus's latest posting.     Technically, the signal is a bullish one at this point. It has been consolidating within a long wedge (or triangle) formation between 11 Jul and 6 Oct. With this morning's price surge, it has broken out  of that formation and has cleared the immediate resistance at $0.64. It now has a potential to challange the last high of $0.735. This means a 15% upside from $0.64. Bollinger band has been narrowing since Sep 06 indicating that there will be sudden price movement. The possibility of an upward movement appears high now. I have gone in to buy.      For reference and sharing only. Please come to your own conclusion if you would like to go in.
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Nostradamus Supreme	09-Oct-2006 19:02        Nostradamus About Contact  Quote this Post!
x 1   x 0  Alert Admin	It said it expects earnings in the year to March 2007 to come in higher than that of the previous year as the group expands capacity to match strong domestic demand. "We are confident of growth for the full year vis-a-vis the previous year, driven largely by the new capacities coming on stream and our higher-margin modified starch products," group chairman and chief executive Zhao Libin said in an interview with XFN-Asia.  At the time of its IPO in February, China Essence had an annual capacity of 60,000 tonnes for potato starch and 22,000 tonnes for potato starch-based products such as vermicelli, starch strips, and its proprietary five-grain noodles. Net proceeds from the IPO were used to partially fund its capacity expansion program. Some RMB100m was spent on building a 40,000-tonne potato starch facility in Suiling province. Another RMB60m was used to build a new 18, 000-tonne modified starch plant in Lindian province. These new plants have commenced operations this month. "We do not foresee further capital requirements for the rest of the financial year," Zhao said. But with its IPO proceeds already utilized, China Essence said it will look at other ways to raise fresh funds to continue its capacity expansion. The group is considering either a debt or equity issue to be carried out in the next financial year. "The group will continue to focus on expanding its potato starch and modified starch businesses because of the promising prospects they hold," Zhao said. "At the same time, we hope to introduce more new products to our current portfolio and will focus our R&D efforts on that." China Essence currently has two R&D teams with a workforce of 13, which it plans to increase to improve production efficiency, enhance potato species and expand its lineup to include higher-margin products. "We believe R&D is a very important pillar of our business," Zhao said. He said the next phase of expansion plans are being finalized and that the group will make further announcements in due time. Zhao said with these initiatives in place, China Essence expects to increase its market share in China. China's annual demand for potato start last year was 800,000 tonnes, he said. But with domestic supply of only 300,000 tonnes, another 200,000 tonnes had to be imported from Europe. The supply gap had to be filled by other starch substitutes, he said. "We believe the industry will keep growing due to demand-and-supply imbalances as well as the diverse range of applications for potato starch in food and catering, paper manufacturing, textile, pharmaceutical, oil and mining, personal care and cosmetics, among others, all of which are growth industries in China," Zhao said. China Essence will therefore continue to focus on expanding its distribution network and sales within the Chinese market while also remaining on the lookout for opportunities overseas, he added.
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singaporegal Supreme	24-Sep-2006 11:46        singaporegal About Contact  Quote this Post! Style: Technical   Mood: Yells: "Female TA nut"
x 0   x 0  Alert Admin	Sudden price change may be occuring soon although hard to tell in which direction.
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Nostradamus Supreme	23-Sep-2006 19:24        Nostradamus About Contact  Quote this Post!
x 0   x 0  Alert Admin	PS has a target price of $0.84 based on 9.5x FY08 fully diluted PE.
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Nostradamus Supreme	23-Sep-2006 19:22        Nostradamus About Contact  Quote this Post!
x 1   x 0  Alert Admin	Due to the full utilization rate of their 60,000 tonnes pa (potato starch) and 22,000 tonnes pa (starch based products), the company will be adding 40,000 tonnes pa of additional potato stach capacity by the end of the month and a new 18,000 tonnes pa of modified starch capacity by early next month to cope with the strong demand. This is expected to cost a total of between RMB120--150m which will be financed by their IPO proceeds. This reflects the severe mis-match in the demand and supply imbalance in China currently. China's demand for potato starch is 800,000 tonnes pa vs its current supply of only 300,000 tonnes pa, hence 300,000 tonnes pa needs to be imported while the other 200,000 tonnes pa needs to be substituted by other impute sources such as sweet potato and tapioca). As urbanizarion and industralization accelerates in China, demand for higher quality and greater variety of food would translate to more demand for starch based products. Potato starch is used in a wide variety of applications and these include the production of sausages, ice cream, candy, beverage and pudding (all as thickening agents). In the production of noodles, macaroni and dumplings, potato starch is used to improve elasticity and texture. For the production of snacks such as potato chips, potato starch is used to enhince crispnes. Other industries such as the pharmaceutical, oil & gas, textile and paper is also demanding more starch based products. As the company had previously outsourced the modified starch needs and bought potato starch from outsiders due to a higher level of demand vs their own in-house capacity, the new capacity would help alleviate the bottle neck as well as enhance group margins by 1-2% going forward. And this new capcity is coming on during the peak potato harvest season (Aug-Nov), as well as preparation for Christmas and New Year festival seasons. As a result, there would be little start up costs as utilization rates would likely ramp up very quickly. Mgt targets 8% utlization by Mar '07. Potato prices have been holding rather steady at RMB300/ton, hence unlike corn, raw material price is not an issue. Selling price for potato starch is RMB4,200/ton, modified starch and starch-based products is RMB8,000-9,000/ton, also rather steady. This compares well with import prices (including import taxes and tariffs) of RMB5,600-6,000/ton for potato starch and RMB11,000/ton for modified starch. While the tax exemption had expired for one of their subsidiary resulting in 1Q ended Jun '06 tax rate increasing from 15% to 33%, mgt is expecting the tax rate in 2H ending Mar '07 to decline to 13% due to tax exemptions for their new facilities as wel as some potential tax rebates from the government (still under negotiations). Hene, full year tax rate is expected to average about 20%. With their market share expected to increase from 20% to over 30% for potato starch and 25-26% for modified starch, it is expected to stay ahead of other small competitors (10,000-15,000 tonnes pa), allowing it to be able to buy adequate raw materials at competitive prices as well as have some pricing power. Mge believes that they are the only vertically integrated potato manufacturer in China. Given the persistent demand and supply imbalance, the new production facilities would likely to be filled quickly, suggesting further production expansion next year. Mgt are currently already planning for additional capacity for next year. Mgt seems pretty optimistic that these plans can potentially increase their potato starch capacity by nother 60-80% over the next 1-2 years. While gearing is a low 4%, the increasing working capaital requirements as well as RMB120-150m payment for the capaital expenditures for this year suggests that they could potentially require further fund raising exercises (either debt or equity or a combination of both). Mgt is comfortable with concensus profit growth forecast of 25% to RMB150m, which translates to a forward PE of 7.9x. This is undemanding relative to its peers such as China Sun (10x) and Luzhou (11x) despite commanding better margins (EBOT margin of 42% vs China Sun's 31% and Luzhou's 7%), as well as its own growth rate.
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Nostradamus Supreme	22-Sep-2006 13:05        Nostradamus About Contact  Quote this Post!
x 0   x 0  Alert Admin	It is higher on laggard buying, the stock's valuations having trailed those of other Chinese peers. The stock is trading at a prospective PER for the year to next March of about 8. Other Chinese consumer stocks, such as Luzhou Bio-Chem and China Sun Bio-Chem, are trading at PERs of more than 10, UOBKH said in a note. UOBKH has no rating for China Essence. But DBSV has a "buy" rating for the stock, with a target price of $0.79.. "We reiterate our 'buy' recommendation for China Essence, given its bright prospects in the starch industry and cheap valuation," DBS Vickers said. DBSV expects China Essence's net profit to rise to RMB151.1m in the financial year to next March and to RMB177.3m in the year to March 2008. Growth will be driven by capacity expansion, with China Essence starting production at its new facilities for making potato starch and modified starch by its financial third quarter to December. "We believe the capacity expansion will contribute positively to China Essence, as it no longer needs to outsource modified starch production and will produce sufficient potato starch , which should improve its modified starch margin," DBSV said.
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Nostradamus Supreme	22-Sep-2006 12:56        Nostradamus About Contact  Quote this Post!
x 0   x 0  Alert Admin	There was a site visit by analyst from 18-20/9.
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nexusnixx Member	15-Jul-2006 10:35        nexusnixx About Contact  Quote this Post!
x 0   x 0  Alert Admin	counter has been moving south lately...... however yesterday it touched 59c for a while before ending off at 61.5c at closing...... looks like there is still strong support for this stock.... vested interest at 60c
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cashiertan Elite	19-Jun-2006 10:09        cashiertan About Contact  Quote this Post!
x 0   x 1  Alert Admin	Well i guess suddenly some of the china counters have some mass buying in the same time. Something is brewing?
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cashiertan Elite	19-Jun-2006 10:07        cashiertan About Contact  Quote this Post!
x 0   x 1  Alert Admin	Something is brewing for this counter. Just now it was down pressured, suddenly 600+ lots was bought in one move and change the direction. Look out for big timer entering
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Gallen Senior	22-May-2006 23:29        Gallen About Contact  Quote this Post!
x 0   x 1  Alert Admin	Extracted from my blog http://kelongstocks.blogspot.com Technical Analysis Prices plunged in line with the overall heavy losses in small caps today. Chart shows a breakdown from EMA 50 support and also the supports at 63 cents and 59 cents on relatively higher volumes which is a bearish sign. Prices did manage to bounce off the support at 55.5/56 cents to close at 57 cents. Resistances: 59 cents, 63 cents, 66 cents (supports turned resistances) and 67.5 cents Supports: 55.5/56 cents, 52/52.5 cents (recent support and lows achieved during late Mar and mid-Feb to mid-March respectively) Indicators: Bearish and confirming current price action (RSI fell steeply towards oversold region, MACD continues to decline in negative territory while Stochastics continues to trend downwards to wards oversold region)
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Gallen Senior	22-May-2006 19:59        Gallen About Contact  Quote this Post!
x 0   x 1  Alert Admin	Extracted from my blog http://kelongstocks.blogspot.com Fundamental Analysis Please refer to earlier analysis for forecast figures (click the underlined words). 4Q FY06 was rather disappointing compared to 3Q FY06 as revenues and gross margins declined, probably due to the slower sales over the Chinese New Year holidays as well as higher production expenses. Find their guidance as of end 3Q FY06 rather misleading on hindsight, was expecting 4Q FY06 to be similar to 3Q FY06 at least: "The Group is optimistic of its performance in 4Q FY2006 as it expects order momentum for its core products such as potato starch and potato starch-based products to remain strong due to new market penetration and new customer wins." Furthermore net profit margin also declined significantly due largely to higher tax provisions in 4Q FY06 as well as higher admin expenses for IPO listing. Revise revenues, gross profit margin and net profit margin forecasts downwards accordingly in line with weaker than expected results. Please refer to earlier analysis for forecast figures. 4Q FY06 was rather disappointing compared to 3Q FY06 as revenues and gross margins declined, probably due to the slower sales over the Chinese New Year holidays as well as higher production expenses. Find their guidance as of end 3Q FY06 rather misleading on hindsight, was expecting 4Q FY06 to be similar to 3Q FY06 at least: "The Group is optimistic of its performance in 4Q FY2006 as it expects order momentum for its core products such as potato starch and potato starch-based products to remain strong due to new market penetration and new customer wins." Furthermore net profit margin also declined significantly due largely to higher tax provisions in 4Q FY06 as well as higher admin expenses for IPO listing. Revise revenues, gross profit margin and net profit margin forecasts downwards accordingly in line with weaker than expected results. ...........continued at my blog
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Gallen Senior	19-May-2006 08:31        Gallen About Contact  Quote this Post!
x 0   x 1  Alert Admin	Extracted from my blog http://kelongstocks.blogspot.com Technical Analysis China Essence broke down from an uptrend line on 25 Apr 06 as prices closed below the support at 66 cents and prices corrected before finding support at EMA 50 line, since then prices have tested the support on another 3 separate occasions including today, although prices fell below EMA 50 on intraday basis, they have managed to close above this support on each occasion. For now, China Essence remains capped in downtrend by 2 downtrend lines (thick red lines on chart above). Today's candlestick is a spinning top, gapping down and negating yesterday's harami candlestick which had signalled a potential reversal. Resistances: 64 cents (downtrend resistance on steeper sloping line), 66 cents (previous support turned resistance), 68 cents, 70.5 cents and 73.5 cents. Supports: 63 cents (EMA 50), 61 cents (intraday low on 28 Apr 06 and support region in early Apr 06), 59 cents (intraday low on 16 May 06), 56 cents Indicators: Neutral but bearish bias, RSI hovering closer to oversold region, Stochastics made a bearish crossover despite yesterday's price rebound, while MACD has continued to trend downwards.
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Gallen Senior	19-May-2006 08:29        Gallen About Contact  Quote this Post!
x 0   x 1  Alert Admin	Hi Nostrdamus, yes, i understand, peers means closest comparables n SGX, commodities producer especially those involved in starch based products like China Sun. Valuing it closer to China Sun.
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Nostradamus Supreme	18-May-2006 21:22        Nostradamus About Contact  Quote this Post!
x 0   x 2  Alert Admin	Not exactly peers. China Essence is dealing in potato, China Sun is dealing in corn and Celestial is dealing in soybean. China Sun and Luzhou are peers. Celestial and Pine Agritech are peers.
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Gallen Senior	18-May-2006 20:49        Gallen About Contact  Quote this Post!
x 0   x 1  Alert Admin	Extracted from my blog http://kelongstocks.blogspot.com [B]Fundamental Anaylsis[/B] China Essence reported good 3Q earnings on the back of increase in overall sales volume, overall increase in the average selling prices and the enhancement of sales mix to higher-value modified starch products. Gross margins increased due to larger economies of scale and higher margins from modified starch products (7.4% of revenue). China Essence will expand production capacity for potato starch by an additional 40,000 tonnes from current 60,000 tonnes and potato starch products by 18,000 tonnes from current 22,000 tonnes by 2Q FY07. This will help to boost gross and net margins even further. Revenues are forecasted to grow 40% in FY07 while net margins are forecast to increase slightly due to greater contributions from modified starch products. Peers dealing in modified starch produts like China Sun and Celestial are trading at around 11x forward P/E for 2006. China Essence has similar margins compared to Celestial while margins are superior to that of China Sun. China Sun trades at a premium largely due to potential growth given that it is likely to be awarded an ethanol production licence. Celestial should trade at a higher P/E due to its larger revenues and profits as well as higher market capitalisation. ...........fair value and conclusion continued at my blog
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