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Hi Hotstock,
The latest read or call may not be the most accurate. I suppose many broking firm/ analysts differ in their perspective and assessment with regards to companies' performance and prospects. Each will form their own opinion based on many factors including their ability to connect with clients, analytical experience, company interest etc etc ... There is no right or wrong per se.
Yes, reading latest reports and news is one thing. The need to analyse what we read is still paramount. In this instance, i choose not to agree with the latest. Cheers..
Latest from CIMB?
Hi sthinvest, you info is already outdated. Please go and read the latest on Jiutian. Business condition changed.
sthinvest, how's good jiutian is, it can never go up above 20c! it's confirmed a gone case company...got opportunity better short for a crash below 10c...
Jiutian's expansion program embarked one and half year ago should start to bear fruit this financial year and the comi ng years. The 120,000 ton DMF/ Methylamine plan, one of the world largest, is currently operating more than 80% as reported and with their latest addition, the 250,000 ton methanol plan on scheduled to start operation in Q3 2008 will greatly enhance sales volume and efficiency.
With a stable methanol cost and an improved DMF selling price, the company is poised for multiple times increase from previous sales figures and profitabilty.
Trust the management 's foresight to expand its capacity one and half year early than its competitors ..
You are welcome.
Just want to make sure i invest prudently through own research and doing my small part to share with all who are like minded. Cheers.
sthinvest, thanks for your diligence. Keep it up.
Was checking out DMF prices and chanced upon this website www.chinapu.com.
From the news data reported in the site, the DMF prices was at a low of RMB 5200 to RMB 5600 last Nov 07 thereabout. Since then, prices has trended up a few times to RMB 5600 - 5800 in March 2008 and most recently RMB 6200 - 6400 in April 2008. See below .
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China DMF Manufacture Increase quotation (April 23)
Writer: 2008-04-23 Resource:ChinaPU.com
In April 21, Zhejiang Jiangshan Chemical Company declared to increase DMF quotation RMB￥300 per ton, now the EXW price is RMB￥6400-6500 per ton;
Hualu Hengsheng Corp. also rose up EXW price to RMB￥6200-6400 per ton, and the corporation delayed the previous maintenance plan in May;
Anhui Huaihua now quota EXW price RMB￥6400 per ton;
Anyang Jiutian now quota EXW price RMB￥6200-6300 per ton.
China DMF Manufacture Annual maintenance and Quotation
Writer: 2008-04-18 Resource:ChinaPU.com
Recently, Zhejiang Jiangshan 150,000 T/Y DMF system stop production for some problem, and will start production in next week, now the quotation is RMB￥6200 per ton.
Anhui Huaihua start production in this week and the quotation is RMB￥6100-6200 per ton.
Anyang Jiutian stop production for annual maintenance and will recover production next week, now the quotation is RMB￥5900-6000 per ton.
Zhangqiu Riyue now quotation is RMB￥6000 per ton and keep normal operation.
DMF: EXW price rise up RMB￥200 per ton
Writer: 2008-03-17 Resource:ChinaPU.com
PU resin market become active in this week, China domestic DMF suppliers decide to increase EXW price RMB￥200 per ton.
Now Hualu-Hengsheng EXW price is RMB ￥5600 per ton and Zhejiang Jiangshan Chemical EXW price is RMB￥5800 per ton.
Reported by www.chinapu.com
In their report, CIMB note that sellers made a short-lived attempt to raise prices back in Nov 07, but prices failed to hold up after 2 weeks.
tchoonw, u are right in your reading.
Also wonder why the chemical industry players there are expanding so agressively. This set me thinking ...
tchoonw ( Date: 18-Apr-2008 08:04) Posted:
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Incline to agree with sthinvest . DMF prices is averaging RMB 6200 to $6400/ ton compared with analyst est of RBM of $5400/ ton below.
| yongliang168, wat 9c? should be 5c! | |||
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0.12? i think 0.09
target price of only 0.12 ? u sure or not? where is the report?
| China DMF Manufacture Increase quotation (April 23) | ||
| Writer: 2008-04-23 Resource:ChinaPU.com | ||
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Gone case !
The same analyst called for an "outperform" with the Tp of $0.75 around end 2007 followed by $0.38 and $0.12 this year. What a change of opinion and outlook within 5 months !
Areas of doubt in their latest assessment include the change of valuation methodology that was different from their previous reports and the other broking firms. Big prices fluctuations in the market are very normal during the early part of the year and should be taken into consideration. Their own admission with regards to their current bearish sentiment near term as compared to their peers and also their very biased conservative cost and selling price assumptions.
Take the latest report with a pinch of salt.
Report from CIMB last month.
Unfavourable price dynamics could cause near-term sales shift. Weak DMF prices and surprisingly strong methanol prices in China had made the production of DMF from externally-purchased methanol hardly profitable in 1Q08. Meanwhile, exceptionally strong methylamine prices could drive a shift in Jiutian's sales mix from DMF to methylamine in the near term.
DMF oversupply could extend beyond '10. Jiangshan Chemical announced a massive 300,000-tonne p.a. DMF capacity-expansion plan last week. We now think DMF supply, expanding at 23-37% p.a. over '08-'10, could realistically be fully digested only in '11-'12. Our analysis is supported by China's large DMF net export position since Nov '07. We doubt a slowing global economy could take up China's growing DMF exports when various DMF producers resume full operations.
FY08-09 EPS forecasts cut by 5-8%. Our EPS downgrade factors in lower utilisation rates and DMF prices, as well as higher methylamine and methanol price assumptions. We remain below consensus as we are bearish on the near-term turnaround prospects for the DMF industry, and are more conservative in our cost assumptions. Downside risks to our forecasts could come from lower-than-expected DMF prices, weaker-than-expected methanol prices in FY09-10 from a potential oversupply of methanol in China, and a continued rise in coal prices.
Target price cut to $0.12 from $0.38. We have changed our valuation methodology from DCF (WACC 14%) to P/BV valuation on the back of downside risks to our ASP forecasts, a potential lack of funding to expand into new products and ongoing concerns with the DMF industry. Our new target price of S$0.12 is based on 1x P/BV. Downgrade to Underperform.
Look like a double bottom.
Anybody attended the AGM and would like to give all an update?
I'm seeing down trend. Market momentum is weak. 30 days trading volume is low in average. No sign there is market break ....