Thursday, September 29, 2011
PARD/ CFG (Pacific Andes Resources Dev & China Fishery Group)
Yr 2009 Posts
Old CNA Forum(Salvaged)
Posted by fishfish
tap fishing grounds in the North and South Atlantic and plans to expand its distribution network in eastern Europe and the United States through acquisitions.
"Now is a better time for acquisitions because of the financial tsunami and we are in talks with potential sellers from time to time," managing director and vice chairman Ng Joo-siang said in Qingdao. He did not reveal the budget the company has put aside for acquisitions.
"As long as our gearing ratio can stay below 100 percent, we will still go ahead when there is a good acquisition opportunity," Ng said.
Amid criticism of the company's debts, Ng said the gearing ratio could be reduced to 60 percent next year from its current 80 percent if there are no new investment expenditures. He said the company is "comfortable" with the current gearing ratio.
The profit margin of its fishery business could reach 50 percent in five years from 35 percent, helped by its flagship fishing vessel, which will be operational by next month, Ng said.
Pacific Andes, which holds 42 percent of Singapore-listed China Fishery, invested US$100 million (HK$780 million) in transforming a tanker into the fishing vessel Lafayette, that is expected to haul in 300,000 tonnes of fish a year.
The holding company, mainly engaged in processing and distributing frozen fish, also aims to expand its distribution network.
"We hope to penetrate all supermarket chains in the US and enter eastern Europe through acquisitions," Ng said.
The company currently supplies frozen fish to 22 US supermarket chains. Profit margin of distributing products directly to retailers is 24-30 percent.
The new processing factory in Qingdao could save production cost of at least US$100 per tonne of frozen fish on lower water consumption, while labor productivity can be raised by 20 percent with the new equipment, Ng said.
"The cost of sales can be reduced to US$500 to US$600, from the current US$600 to US$700 per tonne," he said.
The processing factory, which has a capacity of 60,000 tonnes of frozen fish fillets a year, cost Pacific Andes US$100 million.
PARD (some CFGs) forms a part (NOT insignificant) of my portfolio allocated to holdings considered "W-i-p" (work-in-progress).... those with potential to be "Biggies" due to certain monopolistic type advantages in their franchise... I am bullish about PARD & CFG, in fact the PA Group...
From this article it appears PAIH (NOT PARD) is on the prowl...
OR am I wrong? fishfish?
PAIH has the Hongdao frozen fish processing unit coming on stream with significant advantages ...
- MSC (Marine Stewardship Council) certification
- With MSC certification.... margins can go substantially higher for the low margin fish processing & trading biz... from the current net profit margins (NPMs) of 6 to 8% ( correct me if I am wrong fishfish) to higher
- the margins figure 24-30% for going direct to retailers bypassing the distributors & wholesalers, given by Ng JS in the above article is for GPM (Gross Profit margin)....I am guessing...
Given also that..
- savings of USD100/tonne for production costs arising from savings in water consumption & another
- COS (cost of sales) is down 12%
- labor productivity raised 20%..
This is a potential game changer since PAIH & PARD (takes care of distribution) can now target the European mkts with this MSC competitive marketing edge/tool to sell direct to the 22 US supermarket chains...
Driving NPMs to 12-15%?
The profit margin for CFG due to Lafayette of 50% given by Ng JS is GPM (if I am not wrong) .... so that will drive NPMs to 30-35% from current 25%?
Other potential catalysts...
see previous posts...
most will come onstream this Q or later Qs...
if there are no surprises...