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Origin Agritech Limited (SEED) Message Board

  • lapipetoutjours lapipetoutjours Jun 4, 2009 7:28 AM Flag

    SEED has 10-bagger potential


    Key Investment Considerations
    1)superb fit of very-strong
    macro economic trends in China
    2)well connected top management
    3)strong,rapidly growing seed
    4)positioned to be the leader in
    ag biotech in China
    5)positive cash flow should bol-
    ster already strong balance
    6)EPS should burgeon as revenues
    grow and fixed costs decline
    7)SEED could repeat MON's suc-
    cess in China with huge lever-
    age possible(only 20 MM shares

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    • It is ludricous to compare Seed to Montosanto. See these numbers

      Seed / 2006 / 2007 / 2008
      Revenue / 523 / 490 / 513
      Net / 76 / -163 / -43
      EPS / 3.25 / -7.01 / -1.88

      In the booming years there was no growth and they manage to lose money.

      Mon / 2006 / 2007 / 2008
      Revenue / 7065 / 8349 / 11365
      Net / 689 / 993 / 2024
      EPS / 1.28 / 2.08 / 3.72

      This is a company that looks healthy.

      The balance sheet of Seed looks extremily weak. Way over leveraged. Current assets are 925 million RMB and current liabilities are 1055 million RMB.
      So the company has more short term debt then cash + cash equivalents.

      I prefer to invest with regard to the numbers and not with regard to fairy tails. No doubt there are companies that play the chinese market better than seed. Perhaps Montosanto jumps in.

      • 1 Reply to jl.meyers
      • the market was flooded with small rogue seed companies. Then when the gov't decided to kick in regulations all the small companies dumped seed onto the market crushing the market by inflating the inventory. Also SEED was just coming out of the gate and in the process of developing product expanding capacity, restructuring the management team and implementing new off site sales model. Most of these rough times are in the rear view mirror in my opinion. Just a few of my thoughts.

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