tag:blogger.com,1999:blog-37872616.post6325618532572141571..comments2024-03-29T01:03:31.291+08:00Comments on BULLy the BEAR: China milk - tainted milk scandalla papillionhttp://www.blogger.com/profile/01372278083694506953noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-37872616.post-62146666258244994292009-02-23T10:29:00.000+08:002009-02-23T10:29:00.000+08:00Hi Touzi,I think the report mentioned that china m...Hi Touzi,<BR/><BR/>I think the report mentioned that china milk is high debts because of their total liabilities, which also includes their convertible bonds. It's true that they have low short term bank borrowings. I think they are worried that china milk's cash position could be faked. Otherwise, why don't china milk pay off their total liabilities using their huge cash/cash equivalents?<BR/><BR/>I've no ready answers too. I do know that the amt of cash sitting there, if they are not giving it off to shareholders as dividends nor re-investing back into their business, is not going to give a good returns and it will be shown on the ROE.la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-47848562002835649392009-02-22T22:08:00.000+08:002009-02-22T22:08:00.000+08:00Why was China Milk considered a high cash, high de...Why was China Milk considered a high cash, high debt company? They have no bank borrowing, only covertible bonds at S$2 conversion price.<BR/><BR/>On the other hand, according to the annual report their short term bank deposit is 7 days to 3 months. Total interest earned for 2008 is RMB20,830,000. This is only about 1.1% of cash. Hmm...seems too low.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-37872616.post-78678681854225592892008-09-28T21:43:00.000+08:002008-09-28T21:43:00.000+08:00Hi HH,Hmm, good idea. I'll email them to see what ...Hi HH,<BR/><BR/>Hmm, good idea. I'll email them to see what response I'll get. I've a feeling they won't answer too, but let's give them a chance to impress me.la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-4499867028989583342008-09-28T21:42:00.000+08:002008-09-28T21:42:00.000+08:00Hi SBC,There are no geographical breakdown of thei...Hi SBC,<BR/><BR/>There are no geographical breakdown of their revenue. It is stated, however, that their revenue is mainly derived in PRC. In fact, their major customers of bull semen and cow embryos include various govt. entities in the PRC, while raw milk are mainly dairy product manufacturers in Heilongjiang in which they operate. <BR/><BR/>From what I understand, they do not export their semen, embryo or milk outside of PRC. <BR/><BR/>You raised a valid point about importing milk from other countries. I also doubt that the cost will prevent them from doing so. Rather, a more possible solution would be to source out higher quality, untainted sources of milk, locally in PRC. China milk also stands to gain from being on the 'producer' side of the chain. There really is a shortage of raw milk producers, though there are no shortage of milk product manufacturers. <BR/><BR/>Do temper my views knowing that I have vested interest in China milk.<BR/><BR/>Sad to say, I do not know what's a good buy in price for China milk! I didn't do a thorough job when I first bought this, so as such, trying to read up now :)la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-74046994175069909302008-09-27T20:56:00.000+08:002008-09-27T20:56:00.000+08:00Hi LP,Thanks for the write up!"The table abov...Hi LP,<BR/><BR/>Thanks for the write up!<BR/><BR/><BR/>"The table above shows some of the s-shares with warning signs. It's taken from a report from JP morgan. ..... I was a little perturbed when China milk had the privilege of being listed as the company with high cash, high debt. This 'indicates poor financial discipline', according to the report. 'Balance sheet management around book closure date, or in the worst case scenario, a possibility of fraud or embezzlement of cash' might be the possible reasons.<BR/><BR/>Well, it seems like chinamilk had the dubious honour of having total debt/market cap>30% and total cash/market cap>30%, hence it was identifed as having high cash, high debt."<BR/><BR/>LP, perhaps you can write an email to Chinamilk mgt and see how they response to this? <BR/><BR/>(although from my experience, they rarely response).<BR/><BR/>We can also see their investor relations. <BR/><BR/>HHUnknownhttps://www.blogger.com/profile/18285439267673479097noreply@blogger.comtag:blogger.com,1999:blog-37872616.post-54222624181838543702008-09-27T14:14:00.000+08:002008-09-27T14:14:00.000+08:00Hi LP, do you have the breakdown of the geographic...Hi LP, do you have the breakdown of the geographical countries in which China Milk revenue is derived?<BR/><BR/>I personally think that China citizens are unlikely to import milk products due to cost concerns (even if the govt allows) and if China Milk has a high concentration of its business markets in China, this crisis will be an excellent opportunity for them as their high quality semen/ milk (26% of revenue) will be highly demanded, in response with the low quality milk found in the market.<BR/><BR/>In fact, they can priced it even higher to justify its premim quality. <BR/><BR/>However, if they have say 40% of revenue from overseas market, their "China" brand may affect their sales.<BR/><BR/>What do you think is a good price to buy for this stock?<BR/><BR/>Regards,<BR/><BR/>SBCSgbluechiphttps://www.blogger.com/profile/18070778039656838451noreply@blogger.com