Hi, let me kickstart the forum with one of the highly traded stock for the past few weeeks.

Oceanus has just released its 1H2008 results of PBT of RMB 180.3m with a write-off of RMB150m for the reverse takeover. NPAT is at RMB21.2m.

What do you think of the prospects of this company? It appears to me that they have a good expansion plan. Risks include cashflow and capex to grow abalone as well as disease attack that may affect all their stock since they are not insured currently.

At the current price of $0.42, it does not appear to be expensive if we strip out the losses from the RTO.

Oceanus is what i call a 'catalytic-play'.

A 'catalytic-play' is a stock on the verge of an earnings growth inflexion due to a catalytic boost sparked by changes in
(1) the industry's structure,
(2) govt policy,
(3) state of technology, and/or
(4) social norms
which have a domino effect on each one of these factors.

Abalone has always been one of the most prized delicacies enjoyed only by the rich due to its limited supply.

Cost-leader in breeding abalone, Oceanus, intends to change this social norm by providing braised abalone to the middle class.

To do so, it plans to more than double its share of global aquaculture supply from 6% currently to 16% by 2009.

My question is will Oceanus' JV have the brand firepower and distribution channel to popularize its braised abalone among the huge emerging Chinese middle class.

If successful, this downstream integration will likely expand its already high margins (operating margin before goodwill is 81%).

What is happening to the abalone market reminds me of the mobile phone market during mid 90's when giant handphones formerly sported only by towkays transited to become an essential item for the man in the street.

hv just come across a very detailed report by Daiwa Securities. Its target price for Oceanus is 53.5 cents.

Try this link:
http://reporttwo88.googlepages.com/Oceanu080617Daiwa.pdf

=P

Oceanus selling its abalone quick to a new fast-food chain it will set up with Ah Yat in China.


do u think this is good for Oceanus?
seems like a good idea to me.

daiwa securities:

Based on our earnings forecasts and the 14 November 2008 share price of S$0.16,the stock trades at a PER of 1.5x on our FY09 EPS forecast, and at an EV/EBITDA
multiple of 1.1x on our FY09 forecasts.

For more information on Oceanus, please see our initiation report published on 17
June 2008 (Hail to the New King of Abalone). We believe this report is still
relevant for investors, even though it was published in June.


We have published
two follow-up reports, on 29 July 2008 and 22 October 2008, after the company’s
2Q08 and 3Q08 results. We have not made any adjustments to our earnings
forecasts since we initiated coverage of the stock.