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Yongye International, Inc. Message Board

  • carter_stanley carter_stanley Nov 16, 2010 10:26 AM Flag

    CC highlights anyone?

    I can't listen right now and would love some summary highlights. If anyone could post as they lsiten it would be greatly appreciated.

    TIA

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    • Ed -- you're correct .... I typed too fast .... meant to say "concentration" has lessened amongst Top Provinces/accounts.

      Seasaw is quite talented -- he still mutters garbage while FIDO/Yong is giving him a good BONING!

    • Thanks. I thought he said "concentration", not "contraction", but either way I think he meant that Hebei did not become way too large a revenue base because they also expanded into new territories.

      By the way, that schmuck is really getting on everyone's nerve again today. Won't you put that idiot in his place? FYI, he has previously admitted that he had YONG put options that are now deeply under water. That's why he is angry and belligerent.

    • I am pasting the following from their official statements: "Hebei, which is Yongye's largest regional market in China, representing approximately 30% of the Company's revenues in the third quarter of 2010."

      Note that they said Q3 2010, not just in the past. However, in that same official release, Wu was quoted as saying the following: "Hebei, our largest province, has been developing very well. Sales from Hebei increased 474% year-over-year in the third quarter and 96% year-over-year during the first nine months of this year."

      That crazy 474% is a distortion introduced by YONG selling directly to the retailers. This means to me that for the first 9 months of 2010, Hebei continues to occcupy 30% of overall sales. But for Q3, Hebei's growth far outstriped the others. Using the 474% growth in Q3 for Hebei, my calculation says Hebei has almost exactly 50% of overall sales in Q3.

    • Nate, Ed., et al -- with respect to the Hebei perecentage -- the Analyst in her question asked if "Hebei still makes up 30% of the revenue mix..." and the CEO affirmed that that "Hebei still contributes about a third of our mix .. and the other top 2 provinces make up another 10% each". Additionally the CFO acknowledged that due to the extended distribution territories being served the "contraction" of customer revenue has been lessened -- this is a positive and expected result. Hope this helps.

    • "Meanwhile I had so many questions that they didn't cover. Like, an update on the Heilongjiang business, whether they will pay themselves more shares in the future (they had better NOT, unless they have strong reasons to support that), and whether they believe their expansion into the central and southern provinces will moderate their seasonality. This last question will go a long way toward answering whether YONG will do $20M or more in revenue in Q4."

      You had a substantive phone conversation with them once before. Do you think another one is in order, Ed?

    • I know, right? It was natural that a handful of them asked about the animal product (and I was the only one who asked last quarter; toot toot!) because of the new 10,000 ton capacity allocated to it, with not much revenue to show for. But, like you said, why would they worry about the comparative profit margin on the animal product when they are selling only two hundred thousand dollars worth of it for the whole year? Wow, if we could make sure they improve the gross mrgin on that by 1%, they will make ten thousand dollars more before tax. Imagine that! It'd be so great to add that into YONG's projected $50M profit this year. Wow!

      There were quite a few inept questions in there this morning. And then there were some that were so obvious it made me wonder why anyone would ask unless they are newcomers. Like, do you think your A/R will decrease in Q4? Well, if Mr. Analyst had read past reports and listened to replay of past conference calls, the question would not have needed to be asked.

      Overall, there were a lot of accounting ratio questions that they should have gleaned directly from the 10Q without having to ask Sam and Larry. Meanwhile I had so many questions that they didn't cover. Like, an update on the Heilongjiang business, whether they will pay themselves more shares in the future (they had better NOT, unless they have strong reasons to support that), and whether they believe their expansion into the central and southern provinces will moderate their seasonality. This last question will go a long way toward answering whether YONG will do $20M or more in revenue in Q4.

    • I also remember a 30% figure from the past 10Q. However, 30% in Hebei, 10% in the other two mentioned, where does that leave the other 50%? I thought I heard 70%, but I couldn't understand 1/2 the conference call with the accents, stuttering, and bad speaking, so I certainly couldn't be sure of it.

    • Exactly! If we look at China's map, we see that YONG's footprint is very much concentrated in the north: Hebei, Shangdong, and Inner Mongolia. Here are my thoughts about the other provinces:

      SOUTHERN PROVINCES

      We also know that they have expanded into at least the two provinces south of Hebei, which are Henan and Hubei. And they are in the big farming province of Guangdong. Hunan is sandwiched between Hubei and Guangdong, so I would guess that YONG is in that province as well.

      NORTHERN PROVINCES

      We already have some information about YONG making inroads into industrial sales in the far-north province of Heilongjiang. I haven't heard them talk about the other two provinces in the Northeastern Plain, which are Jilin and Liaoning. Liaoning would be great because it is yet another huge center for agriculture products.

      Yet, Jiangsu and Anhui could be even more lucrative because, together with Hebei, Henan, Shandong and Shanxi (CGA's stronghold), they form the Noth China Plain which is the rich alluvial plain of China formed by the flood deposit of the Yellow River (Huang He). To use an USA analogy, the North China Plain is the "heartland" of China because it produces a large percentage of the country's grain and staple products. You can imagine there are farms all over the map there.

      In conclusion, YONG really does have vastly more area to tap into, and some of the new areas should be just as big in revenue potential as Hebei.

    • - Sales by province: Hubei- 70% Inner Mongolia - 10% Shangdong - 10%
      - 4 million expense for options granted to management for each of next two quarters
      - Flooding, hasn't seen a huge impact to sales
      - Will see margin improvement from new factory
      - 5 million in cost left for factory and mining project

      • 1 Reply to nate_m98
      • "Sales by province: Hubei- 70% Inner Mongolia - 10% Shangdong - 10%"

        That's incorrect. It is "Hebei" that has 30% of their sales, and is the province with the largest concentration of their revenue. YONG has only begun to get into "Hubei".

        "5 million in cost left for factory and mining project"

        Be careful with the word "cost". The $5M as well as the money they spent prior to that are all capital expenditure, meaning they are not booked as expenses but as assets. Only the amortization of this capital expenditure will hit non-cash expense, and because that's spread out to many years, will be much smaller than $5M.

    • No private investor questions fielded so far.

      One question just posed re. how many stores selling animal products. Couldn't hear entire response. However, I did hear him say that animal product is still a small percentage of their sales.

      • 2 Replies to nypd2726
      • "I did hear him say that animal product is still a small percentage of their sales. "

        Steve, the animal product is only 0.1% of overall revenue, and the plant product is 99.9%. It's in the 10Q.

        That has always been a big concern to me, because they built 10,000 ton capacity for the animal product, and still has no plan to sell enough of it to get close to any reasonable capacity utilization. However, Sam did answer that the capacity for the animal product can be converted to produce the plant product if necessary. That made me feel a lot better.

      • They also said that they concentrate all their resources on plant products at the moment as the demand for it is very high. Animal products are not in their focus right now.

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