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Yongye International, AŞ Message Board

  • jonathan56602 jonathan56602 Apr 23, 2012 9:56 PM Flag

    More misleading information in the Roe article

    The article by "Roe" (anonymous) frames things in a deceptive manner. Roe himself posted a link to an SEC filing that clearly shows the details of the manufacturing processes. This link (the one he posted) completely disproves his own calculation method and his theory:

    http://sec.gov/Archives/edgar/data/1398551/000114420408023667/v111067_ex10-6.htm

    The SPECIFIC manufacturing processes are in fact different for the two products, and the cost-per-unit of the products are NOT wildly out-of-wack like Roe says. This is evident in the filing, to everyone except Roe. Even when one puts aside the above filing, it's blatantly obvious that the cost of goods/SPECIFIC manufacturing process for a LIQUID product is not going to be the same as a powder product.

    Roe likely will ignore this because he has never admitted when he's been wrong.... but at least others should know that his faulty "calculation method" leads to all sorts of fabricated conclusions. Just look at the cost per unit. It is nowhere near as out-of-proportion as Roe claims (a dead giveaway that Roe doesn't care whether he is being honest or not.) Moreover, Roe flatly refuses to recognize even the possibility that the "yellow humic acid" in powder form is not as expensive to produce as the comparable refined humic material in the liquid plant product, relative to the stated concentration.

    I know Roe will say, "Wait the company says the manufacturing processes are the same."

    But most people know that when the company references obvious similarities in the "major manufacturing processes," the company is referring to the general extraction/manufacturing methods. The most obvious reason that people are well-aware of this obvious inference: one product is LIQUID and the other is POWDER.

    Roe is completely twisting the words of the company around. Does he realistically expect ANYONE to believe that the company says the ENTIRE manufacturing process is identical for a liquid vs. powder product? He has again showed complete disregard for the intricacies of the agricultural manufacturing process, and he has demonstrated a bald-faced willingness to bend the truth in whatever direction he sees fit in order to defame the company.

    I'm not even going to touch the subject of liquid vs. dry weight fulvic-acid measurements, and the INDUSTRY WIDE problems of standardization, because that point is moot, given that Roe himself inadvertently conceded that the manufacturing processes for the two products are different, and that therefore the cost of goods are different(he inadvertently conceded this simply by posting the above SEC link). He is retroactively applying a general cost-of-goods assumption to a product subset, and that should be blatant evidence that he is either a poor accountant, or that he has no scruples whatsoever.

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    • LMAO!! Oh Richard.....you're panicking.

    • jonathan: Alright.

    • jonathan: I meant "both" not "noth."

    • jonathan: I claim that the steps are identical from coal to concentrated fulvic acid, for noth products. Just tell me where you think the steps diverge - the word(s) in the label for the crop product and the respective word(s) in the label or the animal product. Can't you find and post two or three words?

    • Alright Richard, we will see. If it gets delisted for anything related to the allegations you are putting forth I will be a man and admit that I was wrong.

    • The differences in the first few steps of the flowcharts in the SEC link above (that you originally posted) are obvious... Entertaining any response of yours to the contrary is an exercise in redundancy.

    • jonathan: Thank you for reading the article.

      1. If the SPECIFIC manufacturing processes are in fact different for the two products, then Yongye lied in its 10K that the "major production processes for our crop and animal nutrient products are identical."

      2. My analysis does in fact demonstrate that the cost-per-unit of animal product in the 8K you cite is in fact contradicted by the rest of the disclosures, which imply $16,000 cost of manufacturing per ton, or about 600 RMB per case (or piece). So, as I have argued, Yongye's SEC filings are self-contradictory (that is, fraudulent).

      3. The "yellow humic acid" in powder form is not less or more expensive to produce (per unit weight of acid) than the same "yellow humic acid" (per Yongye's patent) in the liquid plant product, because Yongye's patents describe the exact same manufacturing processes and the exact same input materials for both products, from coal to concentrated "yellow humic acid." Which you would have known if you read the patents, but you haven't read them!

      4. Yongye's patents state that once the identical manufacturing processes are completed, then Yongye has a separate mixing processes: one process produces a liquid, heavily diluted NPK fertilizer with 5% fulvic acid content, while another process produces powder of minced weeds with 40% fulvic acid content. No controversy here.

      5. Yongye never said that the ENTIRE manufacturing process is identical for a liquid (crop) vs. powder (animal) finished product. That would be stupid indeed. But the major process (that is, the extraction and refining of the fulvic acid), is the same, per patents, Yongye's SEC filings, and Yongye's Investor Presentation.

      6. The analysis does not depend on any INDUSTRY WIDE problems of standardization. It simply relies on the weight content of Yongye's products. If you don't believe Yongye's SEC filings and patents, you can just look at the content labels on the product packaging. Have you ever seen a bag of the animal product? Its content is clearly spelled out on the back.

      7. I have never claimed that the cost of goods of Yongye's animal product and crop products are the same. That would be stupid and unsupported. However, one can easily derive the cost of fulvic acid and calculate the cost of the fulvic acid component in each product. When you do this, you will see that Yongye's animal product is both highly profitable and extremely unprofitable.

      8. Yes, a simple cost analysis, relying entirely on Yongye's SEC filings, shows that Yongye's 10Ks going back to 2008 are self-contradictory, that is, fraudulent.

      • 1 Reply to richard_x_roe
      • I'm not going past #1, because #1 is a silly enough premise to begin with.

        Again: it is blatantly obvious that the company's statement ("major production processes ... are identical") is NOT a "lie." You are just twisting the words around to fit your argument. The company statement is a general description, and it does not create any actual contradiction to the fact that the SPECIFIC manufacturing processes differ for the two products. If you look at the flowchart that you posted, there are multiple variations in the first few steps. You won't acknowledge this, and if you do, then you'll just keep going back to your blatantly incorrect characterization/twisting of the "major manufacturing processes" comment. So there is no way to win. You have created a circular logic that is faulty but impenetrable by virtue of its false assumptions. And I apologize if I'm being acerbic, but I think you went overboard publishing dubious accounting on a mass-distribution investment site such as Seeking Alpha. You could have tempered your argument for God's sake.

    • jonathan:
      Nice post thanks for the real info. Again I am unsure the motive of RxR but whatever it is he is digging a very deep hole with all of his allegations and innuendos. I truly believe he wishes his importance to be greater than what it really is and that is what makes him so dangerous.

      • 4 Replies to bonalcharles
      • amirstern@ymail.com amirstern Apr 24, 2012 1:57 AM Flag

        You must agree that the Chinese are prawn to 'telling us a good bedtime story' and so scrutinizing carefully their representations is highly warranted.

        I am long and hope that YONG will prove to be a true company. But I am very much open to examine whatever I can to see I have not been taken hard for a ride.

        Retard is very meticulous about the details, and in this regard he is doing the appropriate thing. It might very well be that YONG is not exactly what they tell us this company is, but perhaps in ball park parameters what they say is not dramatically far from the truth. Maybe they are learning with time to mend their ways. Maybe we will never know the full or even the basic truth.

        Time will tell.

        In any event, YONG is a very high risk investment, just for wide and sober proportions, to those who lost sight of the wood from the trees.

      • bon: What allegations and innuendos? A set of four disclosures in Yongye's SEC filings and seven simple calculation steps show that Yongye's SEC filings are self-contradictory and cannot be relied upon.