Oceanus

Oceanus insures half of its abalone stock. Moreover, they have also mitigated the risks by separating the tanks, so any disease would not spread to others. This also prevent inbreading. In addition, water flows one way i.e. fresh sea water is also filtered before pumped in, tanks water is then discharged to the sea.

oceanus lastest price in Taiwan TDR is NT 11.5 tt is a SGD0.505 , right now singapore trading at 42.5 cents The recent sold down was due to contra profit taking , the business model of this company is great , got a lot of potential. With the up coming festival season demand for its goods will increase, i expect a growth in its Q4 result. Oceanus also holds 20% of the world supply of abalone. Barrier to entry ? yes Large economical scale , yes and right now with the difference in TW TDR and SG price . how much discount? you guys do the maths. www.businesseducationfinance.com/2010/01...d-based-abalone.html

neontet wrote:

musicwhiz, the business is actually more exciting than you seem to realise. This fella has about 200 m abalones currently ....& breeds about 100 m a year. This is not your small-time abalaone farmer. It\'s the world\'s largest land-based abalone producer! It is going into canning abalones, etc. Most significant is the restaurant chain. Imagine 200 outlets in China, HK, Spore, Taiwan....IPO of the restaurant chain in maybe HK - the PE multiple will be juicy. The Taiwanese investors appreciate Oceanus a lot: now paying NT$11.50 per TDR, which is 50 cents. In Spore, the stock only @ 41 cents!!!!!####****

Hi neontet, I am not doubting the scale of the business, and you have provided numbers to substantiate the potential. And I am also aware it is the largest abalone producer. However, what I wish to know are the numbers pertaining to the business potential in terms of profitability and cash flow. As I mentioned before, I am curious as to how the fair value of the abalones is computed. Also, perhaps you may like to comment on the Balance Sheet and Cash Flow Statement for Oceanus. Market price has no bearing on the business and should be ignored. Thanks.

musicwhiz wrote:

neontet wrote: However, what I wish to know are the numbers pertaining to the business potential in terms of profitability and cash flow. As I mentioned before, I am curious as to how the fair value of the abalones is computed. Also, perhaps you may like to comment on the Balance Sheet and Cash Flow Statement for Oceanus. Market price has no bearing on the business and should be ignored. Thanks.

Musicwhiz, You are against the forces man. Out of curiosity, I take a quick look at this stock since so many investors are talking about them..... And I find Oceanus just as \"Amazing\". If you have time, go thru it. How they draw up their financial statement can be a \"good case study\". Ya.. I mean it is likely to be more than just \"fair value\". Enjoy if you are interested.

Past financial reports of Oceanus had shown that the Company incorporates “the gains arising from changes in fair value less estimated point-of-sale cost in biological assets” as part of its “Revenue or Income”. The amount is quite sizeable as seen from the figures below - FY 08 1Q09 2Q09 3Q09 Product Sales 318M 65M 73.5M 98.6M Assets Gains 518M 173M 125M 182M Nett Profit 193M 107.5M 79.5M 105M M – million RMB The implication here is that Oceanus is likely to see a significant increase in its biological asset value and nett profits for the next 2 to 3 years, provided its abalone population could continue to grow healthily & in sufficient numbers. Thereafter, the question is - can it translate the huge biological assets value into hard cash through sales. A big plus point for Oceanus is that its biological assets value increases exponentially. Revenue from its restaurant operations will be just a pale comparison to its annual asset gains. In its FY08 Press Release on 24th Feb 2009, Oceanus had stated that Jones Lang Lasalle, an independent valuer (unless one doubt its credibility), had made the following valuation for live abalones as at 31st December 2008 – Abalone Size ………… Unit Price (RMB) 2.5 cm (9 – 12 mths) - 1.75 6.5 cm (24 – 30 mths) - 7.45 8.5 cm (36 – 42 mths) - 17.14 10.5 cm (48 – 52 mths) - 62.40 Regardless of the accuracy of the reported valuation, one has to accept the fact that abalone is an expensive luxurious item, more expensive than scallops. [Retail price for large frozen Australian abalones is well over S$100 p kg, while that of large frozen American scallops is around S$60 or so.] I understand the market price for live abalones had dropped by as much as 25% after December 2008 and had picked up significantly towards the end of 2009. One Chinese report had mentioned that abalone prices in many restaurants in Northern China had doubled their prices during end-2009 due to shortage of supply. Such being the case, the coming 4Q 09 results for Oceanus, which some analysts expected it to be weak, may just spring a surprise on the upside.

observer2, your understanding of Oceanus is impressive! Q4 should be a fantastic one not only because abalone prices have soared in China but also because Oceanus is throwing a lot more abalones to the market (to make good profits) than it had planned. I don\'t think the analysts are expecting a weak quarter - Dr Ng told the analysts already to prepare for a good harvest, if I understand correctly from this report www.nextinsight.net/content/view/1710/79/