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Yingli Green Energy Holding Co. Ltd. Message Board

  • johntillis12 johntillis12 Aug 2, 2007 2:11 PM Flag

    You want ot see who has margins and

    You want ot see who has margins and (Not rated) 4 minutes ago growthRe: Here is the first Seeking Alphe artcile
    Title:SDTH : Undervalued Chinese Chemical Manufacture

    07�� guidance:

    SDTH reported very strong fiscal 07�� guidance on Friday which gave way to a very bullish technical breakout on heavy trading and lead me to further analysis of the company.

    Report as follows:

    Quote

    For fiscal year 2007, ShengdaTech expects to generate revenue of $96 - $98 million, up 32.2% to 35.0% from $72.6 million in 2006. The Company expects net income to increase approximately 31.2% to 36.9% to $23.0 - $24.4 million for earnings per share of $0.43 to $0.45. The Company also expects margins to improve throughout the rest of the year as its higher margin NPCC segment contributes a greater percentage of overall revenue.

    �hWe are very pleased with the progress we have made to date and expect continued growth going forward,�h commented Mr. Xiangzhi Chen, CEO of ShengdaTech. �hWe continue to operate at full capacity in both of our factories and will have an additional 40,000 metric tons of NPCC capacity in Xi�fan City online this month. We also expect to increase NPCC capacity by an additional 60,000 metric tons by the end of 2007.�h

    Technical Analysis:





    . This is an example of a quality smart China play.

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    • Like SDTH and a real value bargain, money is on the table, price will move up soon on good Q2

    • Part 2 (Not rated) 3 minutes ago Re: Here is the 2nd Seeking Alphe artcile
      Here is the 2nd article from seekingalpha about the capacity utilization...I like this one
      A Cheap Chinese Smallcap
      Posted on Jun 22nd, 2007 with stocks: SDTH

      MichiganTrader submits: An article posted Wednesday by Cameron Fous entitled �ShengdaTech: Undervalued Chinese Chemical Manufacturer� lays out the background on what I think is an undiscovered small cap gem.

      In addition to what Cameron wrote, I have been researching ShengdaTech (SDTH) for the last week and find the future to be very exciting. Here are the reasons why:

      They company had $39 million in cash and no debt as of March 31, 2007.

      The nano precipitated calcium carbonate [NPCC] side of the business is growing like a weed and demand is huge. To try to satisfy the demand, the company more than doubled capacity (to 90,000 metric tons) last year and is running at 100% utilization and will add another 45% in capacity at then end of this month (so total capacity will be 130,000 metric tons) and then plans to add another 46% capacity to that later this year (up to 190,000 metric tons). That is potential for huge earnings growth as the NPCC side of the business has 40% gross margins. And the thing is, the company did 10 cents in EPS in Q1 of 2007 without the capacity and subsequent profits from a 111% increase in capacity slated for this year.

      One application of many for NPCC is the tire market. The company is the only company approved to sell its NPCC into the Chinese tire market. That�s right, they have 100% share of the market and only have penetrated 10% of the $150 million market for NPCC in China. Plus, using NPCC in tire manufacturing is a win for the customer too, because it increases the durability, reduces abrasion loss, increases tensile strength and also reduces the cost of manufacturing. SDTH customers tell them it reduces manufacturing costs about 3% to 5%.

      The non-NPCC chemicals side of the business is a consistent cash cow which generates between $10-$13 million a year.

      Last year they developed a patent pending process for manufacturing NPCC that will reduce manufacturing costs 3% to 5% and improve the quality.

      Current PE around 15 and forward PE at around 10 (with very conservative estimates).

      The company said they would make between .43 and .45 a share this year. I think they will beat that easily as they made 10 cents in Q1 without all the new capacity. Next year�s estimate is at .57 a share but I think they will do closer to .70 with a full year of the doubled capacity on the high margin NPCC side of the business. If they do .57 cents in EPS in 2008 over the .43 in EPS from 2007 that would be growth of 33% for a PEG (current PE / Growth) ratio of .48x. If they do .70 cents in EPS in 2008 over the .43 in EPS from 2007 that would be growth of 63% for a ridiculously low PEG ratio of .25x. And those ratios are without subtracting the 39 million in cash out of the PE.

      I think this company is vastly undervalued due to the fact that it just moved of the OTCBB and is undiscovered.

      I would highly recommend reading the transcript from a Roth Capital conference they recently spoke at.

      I would also encourage anyone who is not sold on SDTH or wants more information on this one to read the Q1 2007 conference call transcript.

      Disclosure: Author has a long position in SDTH

      SDTH 1-yr chart

      • 1 Reply to johntillis12
      • Re: Part 3 (Not rated) 1 minute ago SDTH currently worth 9.51 according to VectorVest. Way undervalued!
        Value: Value is a measure of a stock's current worth. SDTH has a current Value of $9.51 per share. Therefore, it is undervalued compared to its Price of $5.11 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.

        RV (Relative Value): RV is an indicator of long-term price appreciation potential. SDTH has an RV of 1.38, which is very good on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.



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