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Gulf Resources, Inc. Message Board

alan74z 290 posts  |  Last Activity: Jun 19, 2014 10:52 PM Member since: Feb 2, 1999
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  • Reply to

    Price of Bromine

    by marubadbad Jun 19, 2014 7:00 PM
    alan74z alan74z Jun 19, 2014 10:52 PM Flag

    sorry made a mistake, it would bring them above $3.30/share of cash, had taken the Dec number not the March 31st one.....

    Sentiment: Buy

  • Reply to

    Price of Bromine

    by marubadbad Jun 19, 2014 7:00 PM
    alan74z alan74z Jun 19, 2014 9:54 PM Flag

    Yes but it was down in April so overall the average of Q2 should be similar to Q1, no big change. The Chemical Business is the unknown in term of volume and prices, I do not think the prices went down in Q2 versus Q1 but we will have to see if the Q1 volume (Q1 which is usually impacted by the Chinese New Year close down), will be maintained or surpassed in Q2. Overall my expectation is for Q2 to be similar to Q1 which in fact was a nice surprise for me and if so they should have continued generating some nice cash flow (around $10m for operating cash flow or over $0.25/share). Given that we didn't hear about a new acquisition or major cash spending, the Q2 cash balance should continue to go up bringing it above $3/share !!!

    Sentiment: Buy

  • alan74z alan74z Jun 19, 2014 2:15 PM Flag

    I fully agree that managing well a company is not only managing the day to day operations, it is for sure a minimum expectation of a good management, but also to manage shareholder value and without paying a dividend or buy back, the only way to increase shareholder value is through the stock price. Companies smaller and larger who have been publicly traded for years know this, I have worked for large corporations which even had as part of their yearly review the total shareholder value creation as a key metric, looking at how much was distributed to shareholders in the form of dividend and/or buy back and stock price appreciation. Using such a metric Gure's management would not be called a good Management even if they have been able to improve their financial performance, saying that the market will take care of it over time is wrong, the market is not perfect and over time could be never ( as some other events could disrupt the long term). Companies whose Management has shown that shareholder value creation is on top of their strategy (which it should) and are using metrics to measure such a creation, have seen their overall shareholder value creation doing much better than those who have not and this is what I would call a good Management team.

    Sentiment: Buy

  • alan74z alan74z Jun 18, 2014 2:58 PM Flag

    Yes if this is going to happen, there will be no incentive for them to do so but usually when Management plans a Buy Out, their tone changes when they discuss results and future projections so I will be listening carefully to their next earning release as the last one didn't have yet this negative or ultra conservative tone, I even felt it relatively optimistic.

    Sentiment: Buy

  • alan74z alan74z Jun 17, 2014 6:26 PM Flag

    I agree with your points of view, it will for sure take time to get the whole auditing process mess at a point where people will feel confident in the audits and better trust the reports. It's complex for sure.

    Sentiment: Buy

  • alan74z alan74z Jun 17, 2014 3:24 PM Flag

    I agree that the only way the stock can move up significantly is with some news on how they are going to use all this cash and continuous cash generation quarter after quarter. I would rather see some new acquisitions especially in the Chemical Business side but hopefully at a good price and using cash not stocks. Yes if they do not have large acquisitions in the plan, an active buy back would be my second choice as with the low volume of trading lately they could push the stock price significantly up and scare short sellers or people betting against the stock, if not they should declare a regular small dividend like $0.10/share a year that would still be 5% of the current stock price and would cost less than $4m compared to on ongoing operating cash flow of $40m a year (I would also state that this will be on ongoing dividend that could be increased based on the cash flow generation of the company) or even an extraordinary dividend but this one would have to be significant like $1/share or about $38m but out of the $108m they have currently would still leave them with over $70m in cash.
    Without a clear message and some actions on how they are going to use their cash, the stock price will go nowhere because of the lack of transparency of all chinese RTO's.and the overall concerns about the true level of cash. They said that they were considering potential acquisitions but it was several quarters ago, time to now show some action.

    Sentiment: Buy

  • Reply to

    Maybe they don't have the votes?

    by jlpeterson73 May 27, 2014 7:42 AM
    alan74z alan74z May 27, 2014 11:06 AM Flag

    Yes it seems that they are using all the same approach they used last time they didn't get the vote, having Mckenzie calling shareholders and touting ISS recommendation as a "leading independent proxy advisory firm" while ISS is still in bed with Morgan Stanley, it was part of MSCI until April 2014 (MS stands for Morgan Stanley), MSCI was created by MS, they had an IPO and separated from MS in 2009 but MS was still the largest owner then, now MS has reduced its ownership but several MSCI top Executives are ex-MS. The current CEO of ISS is an ex-MSCI executive as well. Anyway, the way they are trying to push this deal could mean that they are not certain they have the votes yet, hope so, we will see. It will be so painful for them if they do not get the vote and have to report Q2 numbers showing that even now their 2014 projection is below what they had forecasted once more and their Capex spending has not even started...

    Sentiment: Hold

  • Reply to

    Bromine Up Again

    by lastonestanding000 May 16, 2014 9:27 AM
    alan74z alan74z May 22, 2014 11:13 AM Flag

    As of this morning 6 Customers are now showing a price of 19,000 RMB so an additional 2 more, yes for sure the price has stopped falling and is recovering, interesting to see that it is exactly when there are news about Chinese Manufacturing rebounding from the bottom, I always said it was interesting to see the correlation of Bromine prices with Chinese Manufacturing Index reporting, every time the index is down bromine prices have been down, every time it is up Bromine prices go up, so let's hope we will have more positive news on Chinese Manufacturing in the coming months.

    Sentiment: Buy

  • Reply to

    Bromine Up Again

    by lastonestanding000 May 16, 2014 9:27 AM
    alan74z alan74z May 20, 2014 11:07 AM Flag

    Yes so it seems the price is finally moving up as 2 buyers are now joining the other 2 at 19,000 RMB, they moved from 17,000 RMB to 19,000 RMB (close to 12% increase this is significant), so yes it seems that the pressure up is coming back, let's hope it is the start of a price recovery but it is a good sign finally. Too bad GURE didn't announce a purchase of a Bromine producing facility when prices were so depressed, but let's hope they were in talk and will announce one soon even if I would prefer the purchase of a Chemical production facility as GURE has plenty of unused capacity for Bromine, but long term they will need more for sure and I prefer the money to be invested in reserves/production facilities than sitting in cash earning close to no return.

    Sentiment: Buy

  • Reply to

    Bromine Up Again

    by lastonestanding000 May 16, 2014 9:27 AM
    alan74z alan74z May 16, 2014 1:07 PM Flag

    Yes I am watching it every day, not sure if it is a mistake or if it really went up, they are showing two customers that went to 19,000 RMB in two days, one Salt Chemicals went from 17,300 RMB to 19,000 RMB, the other Changyi granari is a new one and was not listed in the past, this is the reason for the upside, all other customers seem to have not changed their price yet. Let's wait and see if this is really true and if we see other customers moving up as well but at least it is nice to see that it is not going down anymore. It had been stable at a prices between 16,000 RMB and 17,300 RMB for quite some time, a jump to 19,000 RMB would be a very good sign. If they keep a strong or even stronger Chemical Business and get a higher volume and pricing on Bromine, yes the financial picture would get even a lot better but let's not rush to conclusion after just a one day spike. By the way out of Q1 report, one thing which was very nice was the significant lowering of the Bromine production cost year over year, making any upside price movement even more profitable.

    Sentiment: Buy

  • Reply to

    GURE Is A Win-Win Deal

    by tradelogic2001 May 12, 2014 3:19 PM
    alan74z alan74z May 12, 2014 4:17 PM Flag

    Whatever people are saying, today was a good day with a high volume 7% of the outstanding shares 12 times the average volume of the last 3 months, the price went up by over 20% at the close but most of the trading was between $2.20 and $2.40. Yes it is also way below its high of a couple of months back when it even went above $3 but again I have a hard time explaining any Chinese stock price movements lately. The only thing I know is that stocks are still able to react positively to good earning reports like this one, that the company is certainly even stronger than it was a few months ago (better diversified with the Chemical Business growing nicely) and that it is by any traditional financial metric way below its value . I am happy I bought back some shares below $2 and like some others here I used a portion of my holding to sell when it is approaching or going above $3 and buy them back when it is at or below $2 and this strategy has been working pretty well twice, we will see if three is the charm as I think there is a strong possibility this stock will test again its 52 week high in the coming months.

    Sentiment: Buy

  • OK I was surprised by the Q1 results completely unexpected, way above anything I could have imagined and the crazy thing is that the company and its board knew about this performance when they accepted the offer at $7.10 and released their 2014 financial projection which now seems way too low. Not only HL didn't take into account the 2013 performance that blew the company's forecast in their valuation but they now used a 2014 projection that will end up being well below actual performance.
    If I take out the Q1 revenues and Gross Margin and compute what they need to achieve to deliver their 2014 Revenues and GM we have the following numbers:
    Q2-Q4 2014 versus Q2-Q4 2013
    Revenues $689.4m versus 2013 $616.6m so a revenue increase of 11.8%
    Gross Profit $ 409.7 versus 2013 $383.3 or an increase of 6.9%
    Not so challenging anymore given their past performance !
    Cash in Q1 doubled year over year from $123.8m to $246.3m despite a significant revenue quarter in Q1 this year that added $100m to receivable compared to last year and despise an increase in inventory from $141m last year to $289m this year !!!
    Finally still no CAPEX spending out of the $94m they are supposed to spend in 2014 ! I am quite sure that nothing was spent YTD and we are already 5 months in the year, if they were going to spend it they should have had to sign some contracts and make deposits, but none of that is reported, so it certainly didn’t happen yet. Again Q1 is showing how false and misleading their projections are and how unfair their $7.10 offer is, let's hope shareholders will see it and vote NO but if not let's hope a judge will see it as well and find them liable for their actions or I will lose faith in the Justice system in the US and in Nevada in particular.

    Sentiment: Hold

  • Reply to

    Whistleblower phone calls

    by plarger May 12, 2014 9:23 AM
    alan74z alan74z May 12, 2014 12:07 PM Flag

    I think that given these incredible results which had to be forecasted by Management when the SC made its decision to accept the deal or even when Management submitted data to HL about their projected financial performance in 2014 and beyond (HL which didn't even reflect last year's completely wrong forecast when they revised their valuation), yes Management issued some falsified and misleading forecast to justify their low valuation and I will also file an SEC complaint that I will then forward to the lawyers as not sure the SEC can do anything at this late stage. This is more than ridiculous, it is scandalous, and if YONG can get away with this, it gives a pretty bad picture of the SEC or the justice system in Nevada.

    Sentiment: Buy

  • Reply to

    Keep Some Shares For the Buyout

    by tradelogic2001 May 9, 2014 6:03 PM
    alan74z alan74z May 12, 2014 11:54 AM Flag

    Thank you, I am not saying that a Buy Out is not in the work but I would be surprised if they announced anything soon as if it had been in the work, they would have tried to announce it before Q1 results and their positive comments which they knew would push the stock back up significantly, at least they would have tried to downplay their good performance to keep the stock price going up so much but they didn't and had optimistic comments (The late price reduction of Bromine would have been ideal but they said they expected the price of Bromine to remain stable). Again, if I were them I would consider a Buy Out as an option given the current low stock price compared to the Assets and cash flow value but my opinion and it is only my opinion is that it is not for the near future meaning the next couple of months but before each quarter report, in particular if the report is good, there will be a risk. and I will watch their tone when they comment on the results, if they start a negative tone in the face of good results, the Buy Out could be near.

    Sentiment: Buy

  • Reply to

    Keep Some Shares For the Buyout

    by tradelogic2001 May 9, 2014 6:03 PM
    alan74z alan74z May 11, 2014 3:29 AM Flag

    Sorry the Street reduction is not 36% but even worth at 37.5%, again no clue how they come to such a reduction while Net Cash provided by Operations in the 10Q was only down less than 5% and driven by AR not going down as much as last year (but also higher revenues which could explain it) and Tax payable liability being reduced due to the fact they paid their earlier this year.

    Sentiment: Buy

  • Reply to

    Keep Some Shares For the Buyout

    by tradelogic2001 May 9, 2014 6:03 PM
    alan74z alan74z May 11, 2014 3:24 AM Flag

    I just took the cash flow statement and it is under Net Cash provided by operating activities and it is Net earnings + Dep & Amort + or minus changes in other assets like AR and inventory and liabilities like AP or Tax payable. It is the GAAP defined Net Cash provided by Operating activities (or also called Cash flow from operations and it is equal to $12.8m versus $13.3m last year, the Street had last year right as they came with a 36% reduction in CFO but their 2013 was wrong at $8.6m, no clue how they can compute this. Income tax is not a cash item, the payment or lack of payment of income tax is what impacts the Cash Flow from Operation. Again no clue how they can have 2012 correct and come with 2013 so different than what is reported under GAAP. In fact if I take the Tax elements in both years, the numbers do not look at all as they stated.

    Sentiment: Buy

  • Reply to

    Keep Some Shares For the Buyout

    by tradelogic2001 May 9, 2014 6:03 PM
    alan74z alan74z May 10, 2014 2:33 AM Flag

    By the way I was reading the Street's recommendation to keep GURE as a hold and their main argument is that Net Operating Cash flow went down by over 37.5% from Q1 2013 to Q1 2014 which they say is making the Net Income improvement not that exciting. Not sure where they get their numbers from but Net operating Cash flow in the 10Q officially went down only by 5% and this is because of the Tax payment, it seems that they paid their taxes early this year, excluding the Tax payment, they would have seen their Net Operating Cash flow up 10% not the dramatic 37.5% decrease the Street is reporting. I am always mad to see people writing an article in a rush certainly and not taking time to verify their numbers !!! Other reason for the lower cash picture is the AR balance didn't go down as much as last year, stronger Q1 revenues would push them up but they also said that 68% of their over 90 day Receivables or close to $9m were collected by the end of April, so more cash to be reported in Q2....

    Sentiment: Buy

  • Reply to

    Keep Some Shares For the Buyout

    by tradelogic2001 May 9, 2014 6:03 PM
    alan74z alan74z May 10, 2014 2:18 AM Flag

    I agree that any price they could offer would certainly not reflect the value of the company, look at YONG and how bad Morgan Stanley partnered with the Insiders to offer a price that is ridiculous versus book value or future cash flows, but they still pushed for it (even if it was rejected once already) and will sadly be able to steal the company away from minority shareholders at a ridiculous price. The main difference is that since they talked about a Buy Out YONG's Management has been downplaying the performance of the company, trying to hide value everywhere they could and providing gloomy longer term cash pictures showing that they needed to multiply by 6 their PP&E (from $25m to $150+m) to just sustain the Business !!! Reading the GURE 10Q comments, Management seems upbeat, explaining that the opportunities are there for them to grab them and grow the company further and not trying to hide their cash, so my guess is that management is not preparing a potential Buy Out. They could change their mind but their comments give no indication of such a pessimistic attitude to keep the share price down. Let's hope no Morgan Stanley or similar give them this idea !

    Sentiment: Buy

  • Reply to

    1st qtr earnings .11

    by rmnew2fl May 9, 2014 5:01 PM
    alan74z alan74z May 9, 2014 6:52 PM Flag

    Yes they beat my expectations for a minimum $0.05/share in Q1 and very impressed by the Chemical segment performance, I will review the numbers in details but they are better than I expected, the only number I got right was the cash balance as I expected close to $120m or over $3/share. Now it will be time for them to announce some new acquisitions bromine or even better chemical manufacturing. Anyway a great quarter and as usual they filed again before the deadline on Monday. Happy I was able to buy some shares lately at below $2 :)

    Sentiment: Buy

  • Reply to

    Q1 Earnings

    by cyclopz_n_taz May 9, 2014 11:04 AM
    alan74z alan74z May 9, 2014 2:38 PM Flag

    I have one at $1.77 and one at $1.76 buying small lots at a time 1K or 2K :)

    Sentiment: Buy

GURE
2.12-0.02(-0.93%)Jul 11 4:00 PMEDT

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