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Any comment for ABTERRA?
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keepnosecrets
Master |
05-Oct-2009 15:52
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Not so fast. Wait for the Q3 report before you make a decision. WHY is it delayed? Should be when?
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risktaker
Supreme |
05-Oct-2009 12:34
Yells: "Sometimes you think you know, but in fact you dont" |
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Gone ... | ||||
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henrykay
Member |
03-Oct-2009 22:57
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 Coking coal mine in the Shanxi province. Photo by Andrew van Buren OUR RIDE FROM the 3.5 million-strong city of Taiyuan in northern China’s Shanxi province – the country’s biggest coal-mining region – to Abterra’s newly-acquired coking coal mine some two hours away was a picturesque odyssey. We rode on smooth byways past cornfields and stone-homed villages, up serpentine routes which were not even in existence a few short years ago. They were made possible by the massive wealth and employment opportunities that chased the recent commodities boom in China, backed in large part by the country’s rise to No 1 global steel producer status. This writer savoured the opportunity provided by Abterra, one of only a handful of mining companies listed on the Singapore bourse, to visit its coking coal mines. It was my first visit to such a place – the very heart of the commodities boom which, if you believe the predictions of commodities guru Jim Rogers, will be around for a long time. What are Singapore-listed Abterra’s prospects now that it has ventured into owning stakes in coking coal mines? And how much will it reap from China’s aggressive infrastructure expansion? Until recently, Abterra was a trader of commodities: it imported iron ore into China from Australia, India and Indonesia and sold it to steel mills. It also imported coking coal and exported metallurgical coke. In a major move to transform itself, Abterra recently signalled its ambition to expand upstream and become a mine owner and operator. In May, it paid 188 million yuan (S$39.5 million) for a 49 per cent stake in Shanxi Taixing Jiao Zhong Coal Industry Co, which delivers coking coal for the production of steel. This writer visited this mine as well as Zuoquan Yongxing Coal Company (also in Shanxi), in which Abterra acquired a 15 per cent stake for 45.75 million yuan in 2007. As the Jiao Zhong mine will be accounted for as a subsidiary, the Abterra management is excited about its impending boost to group revenues, especially when approval is obtained to raise annual production capacity six-fold to 900,000 tonnes. The surge in production will enable Abterra, which recently sported a market capitalisation of around S$330 million based on its stock price of 6.5 cents, to ride the long-term uptrend of China’s steel-making sector. More immediately, the country’s massive 4.5 trillion yuan economic stimulus package, part of which will fund the steel-hungry infrastructure and industrial mega-projects, is a boon. As a coking coal-miner, coke processor and iron ore firm with mining and logistical operations in China, Abterra has its fortunes tied to the performance of China’s steel industry, as coking coal and iron ore are the chief raw material inputs used in making steel. All S$65.8 million of its revenue in the first quarter of this year came from trading commodities. But its revenue composition will look very different when its new coking coal and iron ore mines start to make contributions. Abterra stands to benefit from its links with its parent company, General Nice Group, which now owns 40 per cent of Abterra after a buyout in October 2006.  Jaffe Lau, CEO, Abterra. Photo by Sim Kih Some background on the General Nice Group: It is one of China’s largest producers of metallurgical coke, a product processed from coking coal and used in the production of steel. In 2008, the total assets of General Nice Group reached HK$7 billion (S$1.3 billion) and revenue stood at more than HK$8.8 billion. Aside from Abterra, General Nice Group has another subsidiary – Loudong General Nice Resources (China) Holdings – which is listed in Hong Kong. Explaining the significance of Abterra’s Jiao Zhong stake, Jaffe Lau, CEO of both Abterra and General Nice, said: “Jiao Zhong complements our trading business very well. We are not only able to secure a steady supply of high-quality semi-hard coking coal which sells at a premium compared to thermal coal, this acquisition has also provided us with a platform to participate in the booming PRC resources industry.” Jiao Zhong will begin making contributions to Abterra later this year but Abterra will reap the full benefits in 2011 after it finishes upgrading the facilities, added Mr Lau. That Abterra was able to purchase the Jiao Zhong stake was unusual as Chinese coal mines are tightly governed as national assets. Adding sizzle to its coup, Abterra, whose stock sometimes is traded heavily on the Singapore Exchange, clinched a whopper of a bargain. Just consider that at the time the Abterra-Jiao Zhong deal was closed, Singapore-listed Noble Group was offering A$447.7 million (2.498 billion yuan or S$538.3 million) for a 78.3 per cent stake in Gloucester Coal, which has 38 million tonnes of coal reserves. Abterra, in comparison, paid 188 million yuan for a 49 per cent stake in a company with access to 50.3 million tonnes of coal. The latter reserves were confirmed only recently – and certainly they are a sharp increase from the 10 million tonnes that were documented when the deal was inked two years ago. Yang Guangling, general manager of the Taixing Jiao Zhong mine, said he was upbeat on the sector, and on the sustainability of selling prices going forward. “In 2007, when we announced plans to buy this mine, not including tax, selling prices for raw coking coal were 270 yuan a tonne. Now it’s 800. I don’t think it will return to 2007 levels again anytime soon. And as further proof of strong demand, remember that nation-wide, coking coal capacity is at an average utilisation rate of 80 per cent.” Abterra plans to continue making strategic acquisitions of coking coal mines to grow its production capacity to five million tonnes per year over the next two to three years, from the current 1.05 million tonne capacity of its two mines. In Shanxi province, where General Nice has business connections since 1992 and is its first foreign investor, Abterra is authorised to operate the mine and will have a larger piece of the action following mass closures of non-compliant mines.  Scene from Shanxi's mining operations. Photo by Andrew van Buren As part of a stepped-up effort to streamline and strengthen the industry in the run-up to China’s 60th anniversary on Oct 1, the Shanxi government will tighten its clampdown on small coal mines to restrain supply and, more importantly, to avoid mine accidents ahead of the all-important National Day. Partly due to the forced coal-mine closures – a campaign that has seen 2,690 operators in the province shrink to just 1,000 – coking coal prices have rebounded some 33 per cent from recent lows, versus a 10 per cent recovery in thermal coal prices. Abterra’s coal operations are in coking coal, primarily destined for domestic steel mills, and it does not engage in thermal coal mining, used mainly in power plants. This is just fine with Abterra, as domestic coking coal shortages – chased by steel consumption growth – have meant thatChina has been a net coking coal importer since 2004, but it is still a net thermal coal exporter. “Shanxi is very strict. If the government catches you mining here without a licence, your power is summarily cut. The provincial government is also cracking down on illegal iron ore mines,” said Mr Yang. He said government regulators even use helicopters to ensure compliance in some of the rugged terrain here. “As the industry consolidates, it will become more profitable, efficient and safer. We will boost capacity to 900,000 tonnes per annum (tpa) from around 150,000 now at our Jiao Zhong mine. To do this, we will need around 300 million yuan investment,” he said, adding that the capacity uptick will take around one-and-a-half years to accomplish. Mr Yang said his company benefits from a healthy relationship with the provincial government. “The government only wants licensed mines to operate as they are safer and contribute to fiscal revenue in the region. Also, we have had a stellar safety record since we bought the stake in Jiao Zhong in May,” he said. He added that Abterra was “highly automated”, which meant fewer miners underground at any one time and less margin for human error. “We are mechanising, so short-term costs will increase with equipment purchases and power usage.” And although the mine was currently below the stated minimum 300,000 tpa capacity, Abterra’s aggressive plan to boost capacity to around 900,000 tonnes in 18 months was allowing its operations there to proceed unhindered by bureaucrats. Mr Yang added: “After 2006, the province received more power to crack down on illegal mines, and the authorities put a lot of effort into the campaign. Therefore, most mines in Shanxi are now in compliance with regulations and are more law-abiding. So now the government is targeting those that failed to get official licences or approval as many illegal mines nowadays don’t have safety equipment, and don’t pay required government taxes.” Abterra was also keeping its eye on coking coal margins and selling prices, both of which have been rebounding of late – backed in large part by the more upbeat outlook on China’s steel sector. “Our production costs including tax here are 200-300 yuan per tonne, with selling prices ranging over the past year from 700 to 1,500 yuan per tonne. Production costs will remain rather constant, and include electricity, raw materials, and labour costs. Wages are the most stable and won’t shift noticeably this year.” He said that Abterra’s biggest buyer of coking coal – raw and washed – was nearby Shanxi Antai Group Holding Co. “One tonne of raw coking coal can become 0.55-0.6 tonne of refined/washed coal, which currently sells for around 1,300 yuan per tonne.” The second day was highlighted by a visit to a mine producing another important commodity for China – iron ore. Another long and winding trip up switchback roads culminated in a stop at Abterra’s 22.8 per cent-held Zuoquan Xinrui Iron Ore Mine (to be acquired by year-end). This acquisition is another example of Abterra’s move into more commodities as well as shifting up the supply chain to raw mining operations, in addition to its traditional focus on the supply and trading of various commodities. The Xinrui mine, ranked No 3 in Shanxi province by size, has an annual production capacity of between 400,000 and 1.5 million tpa with total estimated reserves of some 37.9 million tonnes. Assuming steady output, this means Abterra will be busy supplying Xinrui iron ore to steel mills for nearly three decades! Abterra said it still has a remaining payment of 160 million yuan plus options remaining to finalise the Xinrui acquisition. Combined with the ongoing massive economic stimulus which is boosting activity in steel-hungry infrastructure projects across China, iron ore – even relatively low-iron-content domestic ore – will continue to command high prices from domestic steel mills. With strong demand for steel, Abterra’s prospects look optimistic, which may be why Hong Kong-listed LeRoi Holdings recently entered into an agreement to accept shares of Abterra at a far higher valuation (255 million shares at 12.3 cents apiece, or twice the market price), in a swap that saw Abterra receive 385 million shares of LeRoi Holdings at 43.5 Hong Kong cents apiece, the market price. Now with a 5 per cent stake in each other, the two companies will explore investment opportunities together in the coking coal, coke and iron-ore mining industry. LeRoi has identified resource projects in the region, which Abterra is keen to participate in. UBS Investment Research recently raised its forecast for China’s crude steel output by 17 per cent to 530 million tonnes this year. This flurry of activity at Chinese mills is hardly the behaviour of an economy practising austerity, or one lacking the confidence to seek aggressive growth and expansion – all qualities that Abterra is counting on to ensure good results going forward. This story was published recently in Pulses magazine, and is reproduced here with permission. Recent story: Insider buying: GUOCOLEISURE, HONGWEI, ABTERRA |
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iPunter
Supreme |
03-Oct-2009 10:44
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You are spot on here... I mean what's the grand point of carrying a 'lifeless' stock indefinitely? But on the other hand, one should buy such 'lifeless' stocks at a low low floor price (much waiting is involved)... Only then is it worth holding indefinitely (but not hold till eternity 'comes')... hehehe...  |
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risktaker
Supreme |
02-Oct-2009 23:48
Yells: "Sometimes you think you know, but in fact you dont" |
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You have to weight the risk your willing to take. Ask yourself what is ur probability of it going up 50% in the next 3 months. Frankly speaking I dump Abterra at a loss. Because I dont want to carry this baby -
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henrykay
Member |
02-Oct-2009 22:06
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is it me or today is the first time it ended at a price higher then the buy price? usually the last trade will always be done in large amount bringing the price down but instead today it was brought up . is it just me or seems like something's coming? |
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i780samsung
Member |
02-Oct-2009 19:02
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check abterra transaction in the last 2 years until now. what is the total volume of transaction below 0.04. Can you give a single reason why it can go below 0.04? I can only find one, when it becomes bankrupt. how likely?
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i780samsung
Member |
02-Oct-2009 18:53
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what if you again loose in the next counter and Abterra go up 50% in the next 3 months, and what if ....?
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tedlim_me
Senior |
02-Oct-2009 18:27
Yells: "there is no equity in the equity markets" |
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yeah it's the way of trading but i cant get pass the psychological barrier of losing tt much.. heh..
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risktaker
Supreme |
02-Oct-2009 18:20
Yells: "Sometimes you think you know, but in fact you dont" |
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What if you cut lost and exit the market and use the rest of the money to buy other shares that has high potential of rising ? Instead of letting your money stuck there for 2 years. Maybe you will lost 20% of your investment in Abterra but you might win 50% within 3 months if you vested these money well.
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i780samsung
Member |
02-Oct-2009 18:18
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here comes again ....why dont you come to me, I can get it free for you ...
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tedlim_me
Senior |
02-Oct-2009 18:09
Yells: "there is no equity in the equity markets" |
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stuck alr.. i'll juz have to wait till 2012.. 
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risktaker
Supreme |
02-Oct-2009 18:07
Yells: "Sometimes you think you know, but in fact you dont" |
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I am afraid i have to break this to all Abterra supporters, from what i observed this share is 100% trending downwards.Who knows what Abterra report Q3 results gonna be.... we have no idea. However it has a high chances of losing money.... Careful - BOSAYOR
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keepnosecrets
Master |
02-Oct-2009 16:00
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But seems that 4.5 cents are sold by small amounts though the queue is always there. How long do you want to wait?
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iPunter
Supreme |
02-Oct-2009 15:58
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It looks like my chances of buying @.4 is getting more real by the week...
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bennykusman
Veteran |
02-Oct-2009 15:20
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hi ezy,
i guess need to wait until the quater result
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ezy123
Member |
02-Oct-2009 15:12
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Hi guys I am still not able to clear my 15 lots at 0.055 cents. Maybe have to wait for long time. Today most commodities are down ,one example is Yongnam : earlier trading around 0.3 cents today's trade around 0.275 cents. Why I am still here on this counter even when the chart signals are down.. 
I have read an article sometime back that Abterra did a good swap deal with a Hong Base Company information from their website. extra : "With strong demand for steel, Abterra’s prospects look optimistic, which may be why Hong Kong-listed LeRoi Holdings recently entered into an agreement to accept shares of Abterra at a far higher valuation (255 million shares at 12.3 cents apiece, or twice the market price), in a swap that saw Abterra receive 385 million shares of LeRoi Holdings at 43.5 Hong Kong cents apiece, the market price." Looking at this piece of news it should be at a higher price base on the swap deal. 1.. How do there do more borrowing for expansion if the price still remain at 0.045 to 0.05 cents. unless there consolidate the shares. (maybe practical when prices move up few cents more...) 2. There also looking at dual listing ... more active trading 3. The big demand in China steel market. Maybe another year plus could see positive action on this stock. regards ezy Penny Stock News www.stockkit.info Singapore Penny News Links http://www.stockkit.info/singapore-penny-stocks.php Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell. |
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risktaker
Supreme |
01-Oct-2009 13:02
Yells: "Sometimes you think you know, but in fact you dont" |
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No action today huh... | ||||
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keepnosecrets
Master |
01-Oct-2009 11:57
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If Q3 is like dung, and outlook pessimistic, then bye bye... 
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keepnosecrets
Master |
01-Oct-2009 11:54
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The market is just patiently waiting for its Q3 announcement. It will take or drop off from here no matter what, that is after the announcement. Reason: If good showing for Q3, then all will start buying, small or big players altogether flocking in, and it will then rise above the 10 cents mark not for long. If Q3 does not bode well for the qtr but if forward looking assessment is good, the counter can still go up. So both way after Q3 announcement, put on your seat belt as it will travel fast!! Cheers....
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