The gem perceived by private sector was often regarded as headache by Chinese government. In China, government-owned companies always had very low morale, low-pay salary & earlier retirement (at age 45) offered no incentives to workers. My translation on "state-owned" is that there is a good likelihood that purchase price on Jinan Chemical could be unbelivably low due to State's desire to rid off their headache.
>Jinan Fertilizer Company is being "managed" by Shandong Shengda Technology Co., Ltd.("Shengda Group"), an affiliate of the Company
Shengda Group was actually the parent of Shengda tech before IPO. With Jinan Fertilizer already under their management, I suppose Jinan least already halfly converted to a efficient for-profit operation entity.
>We expect this transaction to be "significantly accretive" to our shareholders within the first year of operations
While Jinan could expand SDTH's chemical seqment to three time larger than what is right now, we are looking for annual sales north of $150 millions for Chemical alone. With gross margin no less than 30%, it is not difficult to see added net income over $20 millions.
>account for approximately 50% of China's concentrated nitric acid fertilizer "exports", making it the second largest in the industry.
Export market is what we want to involve in Chinese commodity products. I believe that in China, fertilizer's prices are being stated-controlled. Only in export market, we will see handsome reward along with rising international fertilizers prices.
Below are some of my previous write-ups in this board. I believe that eps before this news already exhibited over $1 earning power. Now it is even stronger.
good post floppy, if they can pull off what they are trying to do, we might be in on the ground floor of a giant multinational corporation, they certainly have high margin products in all the right markets...