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Gulf Resources, Inc. Message Board

alan74z 142 posts  |  Last Activity: May 20, 2016 4:23 PM Member since: Feb 2, 1999
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  • Reply to

    earning guidance

    by alan74z May 18, 2016 11:24 AM
    alan74z alan74z May 20, 2016 4:23 PM Flag

    Fully agree a cash acquisition outside of China of a compelling Chemical Business would be a major positive development for the company and certainly for the stock price.

    Sentiment: Strong Buy

  • Reply to

    earning guidance

    by alan74z May 18, 2016 11:24 AM
    alan74z alan74z May 19, 2016 11:20 PM Flag

    just one precision, they said: "These projections also assume that there will be costs but no revenues associated with the natural gas drilling project in Sichuan. Once drilling has begun, Gulf Resources will update these projections", this means that they have not included any revenue but only the costs of the drilling project but yes when/if NG or Bromine is produced, then there will be revenues and they will update their guidance upwards accordingly, it will not vanish in thin air or be given away lol
    As for the cost associated with this drilling, as someone had indicated it could be in the range of $300-$500K a quarter so no more than $2m for the year, yes my initial number was too high. I also agree that the $25m invested to improve the Bromine facilities seems high given the current low utilization rate but I also know that they are like all Bromine producers monitored for the impact they have on the environment and some producers if they do not improve their facilities could see their license revoked, so they perhaps have no choice but to do it but I am just guessing, I do not think they would spend the money of they didn't need to as they will need the cash for Daying county

    Sentiment: Strong Buy

  • Reply to

    New CEO Letter

    by yorgental2004 May 16, 2016 8:02 AM
    alan74z alan74z May 18, 2016 11:30 AM Flag

    excellent I had missed this thank you, now their Bromine production makes sense as well as the price of Bromine increase

    Sentiment: Strong Buy

  • Reply to

    earning guidance

    by alan74z May 18, 2016 11:24 AM
    alan74z alan74z May 18, 2016 11:28 AM Flag

    thinking about it I believe my $5 to $10m of expensed spending is certainly on the high side as most infrastructure costs will be capitalized anyway.

    Sentiment: Strong Buy

  • alan74z by alan74z May 18, 2016 11:24 AM Flag

    Here is my take on the earning guidance. The weakness of the Chemical Business in Q1 will continue based on this guidance for the rest of the year, so I expect the Chemical Business and revenues to be down year over year as obviously the Bromine revenues and profit will be up and more than make up for it. However I do not expect any significant increase in volume sold of Bromine so they will continue keep volume flat or slightly down to favor higher prices/margin. Now the big unknown in these numbers is how much will they spend on the Sichuan/Daying county project as they say this guidance includes spending but no revenue for this project. Their guidance come to between $0.75 and $0.78/share but how much will they spend on the project. Given their revenue guidance and EPS guidance and after Q1 and Q2 projection when they should not have spent much on the project, my guess that spending in Q3 and Q4 is not going to be huge at least in this projection, certainly not more than $5 or $10m at most, so excluding this spending EPS projection would have been $0.08 to $0.15 higher at most, so between $0.83 and $0.93/share. We should ask them at the next conf call what assumption they have for spending on the project in their guidance. Overall hopefully a conservative guidance that they can beat but a guidance confirming for me the weakness of the Chemical Business revenue wise (but not margin wise) and the continuing low capacity utilization of the Bromine business that should see little volume increase but significant margin improvement year over year.

    Sentiment: Strong Buy

  • Reply to

    New CEO Letter

    by yorgental2004 May 16, 2016 8:02 AM
    alan74z alan74z May 18, 2016 11:00 AM Flag

    great catch, yes their total asset numbers on page 22 are not correct, in 2015 they didn't include Goodwill and other items below PP&E, for 2014 no clue how they came with this number with an other non-current asset making no sense, they will need to correct those numbers.. As for the Bromine supply versus demand, it seems that it has been their policy to focus on Bromine margin more than on Bromine volume, the supply is tight because other producers have not increase sales as well because they either cannot increase sales as their production productivity has come down for lack of investment when the price of Bromine was too low for them to generate enough profit to do such improvements or because like GURE they have decided to not increase sales to get back to higher margins. It is true that when the price of Bromine was at its lowest the Bromine Business had margins close to break-even so I understand why they would limit supplies until the price gets to a higher margin, now the question is when do you start increasing supplies again, at what price ?

    Sentiment: Strong Buy

  • Reply to

    Q1 2016 report

    by alan74z May 11, 2016 5:28 PM
    alan74z alan74z May 13, 2016 2:39 PM Flag

    I went through the 10Q and listened to the conf call, so nothing much to add to my first reaction and yes the Chemical Business was disappointing this quarter. I am just curious to see their guidance for the year now, it will show us if they believe that the Chemical Business will recover from the slow Q1, hope to get this very soon, was hoping today. Yes we now have to wait until September/November, so Q3 earnings certainly to know what is going on with Sichuan/Daying county so around Nov 10 or about 6 months !!! One element that is relatively new to me is their desire to develop a non Chinese Business through export of Chemical products or buying foreign assets with their RMB cash as it is known that the Chinese Authorities are more flexible to allow companies to buy foreign currencies to purchase foreign assets than to pay a dividend or buy back shares, I think this is certainly something we should keep pushing the company to do even if it presents its own challenges, I think this would be a way to get out of this constrained foreign currency environment they are in today and would diversify the Company's assets outside of China. Growth seems to be their main strategy to get out of the current low share price environment but frankly developing a non Chinese Business could also be a trigger to a better valuation, not only it would show that they can use their cash to add measurable value but would also give them a path to paying a dividend or buying back shares even if the Chinese Authorities do not change their current policies. OK something to keep asking about to the company in the coming months.

    Sentiment: Strong Buy

  • alan74z by alan74z May 11, 2016 5:28 PM Flag

    As promised I will still comment on the results. My first reaction is disappointing, Yes Bromine prices went up but as I thought it was the case Bromine production is still flat to negative (this is exactly why prices are up supply have been kept tight as demand has not really increased much) . The Chemical Business was the most disappointing, especially the old Business. The new Business didn't do so well if you take the restatement (2 months last year, 3 this year). They blame it on the weak economy and on the Chinese New Year which impacted their orders, yes they say that since they have seen a catch up but not enough in the old Chemical Business to make up for what was lost in Q1, the new Business should do better.
    I will go through the report in details but this is my first take. On the Daying County project, nothing really new excepted for the fact they are still moving forward at the speed of a snail and expect real drilling to start in Q4 !
    On the positive they are getting close to having enough cash to finance the project with $148m out of the $170 needed, they should be there by Q3 at the latest even if they announced that they will spend some money on the Bromine infrastructure, hopefully not a huge amount.
    As usual not sure if this disappointing quarter will push the stock price up or down, previous quarters with great earnings saw the stock price going down so who knows this time disappointing earnings could push it up in this crazy trading world !

    Sentiment: Buy

  • alan74z alan74z May 11, 2016 12:33 PM Flag

    Thank you, I will ;)

    Sentiment: Strong Buy

  • alan74z alan74z May 7, 2016 11:02 AM Flag

    Thank you, I will not leave this message board but will limit my posts and spend less time on it, I will also still read the messages of people who have interesting things to say but will block the others or those who attack people instead of talking Business but thank you for your kind message.

    Sentiment: Strong Buy

  • alan74z alan74z May 5, 2016 10:35 PM Flag

    Yes if I am still owning my shares of GURE it is because I still believe that there is a potential for a good return otherwise I would have sold them, call me optimist, seeing the glass half full, yes I am very frustrated like most shareholders who have been around for so many years but I will not give up. Yes I send regularly communications to the company expressing my frustration but also suggesting them to take some actions to finally give the shareholders the return they deserve based on the financial performance of the company. My communications are not only complaints but also suggestions based on my knowledge of the stock market and my corporate business experience, but I must say that I am still learning about the Chinese way of doing Business and the Chinese Authorities way of interfering with the Businesses. Again I am not giving up and will keep pushing for such actions and if I gave up I would sell my shares and you would not see me on this board anymore. By the way I am considering reducing the amount of time I spend on this board as it doesn't bring me a lot of satisfaction or interesting points of view, there are a few exceptions with people posting valuable information but it is very limited. My observations and analyses are mainly for me and I was willing to share them but not worth my current frustration with this board.

    Sentiment: Strong Buy

  • alan74z alan74z May 5, 2016 8:05 PM Flag

    so now I am also someone paid by the company haha
    It makes sense that the company write to me exactly what they then put in the chairman's letter (by the way the Chairman not the CEO), it would have been weird if they wrote something contradicting it. Anyway speak about the Business and give your opinion even if different from mine but stop personal attacks as I have never attacked personally anyone, just debated their ideas or inputs, leave it as a debate of ideas and opinions please, this message board is becoming way too nasty, please go back to discussing Business and stop attacking people. By the way I am French so never was raised with the concept of cheerleader haha

    Sentiment: Strong Buy

  • Reply to

    Bromine price up...

    by sevendaysisall Apr 11, 2016 4:58 AM
    alan74z alan74z May 5, 2016 3:52 PM Flag

    yes in fact even 27,010 RMB/ton, the hihest it went was in Q1 2011 at close to 30,000 RMB/ton, so with quotes already at 28,000 RMB/ton, the price of Bromine is getting close to its historical high. It will at least improve earnings and cash flow if not the stock price !!! Again I would now expect a guidance for 2016 EPS close to $1/share if the price of Bromine remains where it is today.

    Sentiment: Strong Buy

  • Reply to

    Website updated

    by sevendaysisall May 4, 2016 8:12 AM
    alan74z alan74z May 4, 2016 11:53 AM Flag

    Agree fully but for me the interesting new information in this letter was the possibility of developing their export Business and/or buy a foreign operation, this is something new and interesting that I would like to see happening. It would give them access to much needed foreign currencies but also help as their activities outside of China would gain them more credibility.

    Sentiment: Strong Buy

  • Reply to

    Website updated

    by sevendaysisall May 4, 2016 8:12 AM
    alan74z alan74z May 4, 2016 10:47 AM Flag

    I prefer a long message addressing all the important items than a 3 or 4 year old message and yes there were new items in it that I found interesting. Again I know such a message will not by itself solve the stock price valuation but I am finally happy to read something about acknowledging it and listing the actions they are considering with the advice of investment bankers. I am also happy that they started updating their website. So do whatever you want with your shares but I know I am not selling my shares yet and giving up, I will continue buying more on weakness but right now waiting for Q1 results and see if they are in line with my expectations.

    Sentiment: Strong Buy

  • Reply to

    Website updated

    by sevendaysisall May 4, 2016 8:12 AM
    alan74z alan74z May 4, 2016 10:30 AM Flag

    Yes I went to the website and read the new message from the Chairman, I know it doesn't change anything but I was happy that first they started updating their website with more current information, the old letter was at least 3 or 4 year old. I also like the fact that the Chairman doesn't talk only about the Business performance and the Daying county opportunity but also addresses the shareholder value/stock price and initiative they are considering. I do know that Chinese companies with no foreign currency access like GURE have a hard time paying a dividend as the government limit the export of currency and the new item I liked is that they are considering developing an export Business (certainly the chemical Business) and that they are even looking at the possibility to buy a Business outside of China ! This is something new and if it happens would definitely provide a new opportunity for GURE but would give them finally a source of foreign currency generation. Yes this is an encouraging letter and I liked it.

    Sentiment: Strong Buy

  • Reply to

    Bromine price up...

    by sevendaysisall Apr 11, 2016 4:58 AM
    alan74z alan74z May 3, 2016 10:36 AM Flag

    and still going up today, it seems that we breached the 27,000 RMB/ton for the average price with quotes between 26,500 and 27,500. The highest it has been in years now. By the way read the press release of GURE on May 7th last year talking about the possibility of Bromine prices to increase in China, Mr Liu, the CEO, was right on at predicting it (go to their web site under press releases), right on excepted for the last sentence: "We believe we are on the right path to significantly increase shareholder value" !!!

    Sentiment: Strong Buy

  • alan74z alan74z May 2, 2016 6:05 PM Flag

    tow elements will impact Q1 earnings year over year, one is like you said the higher price of Bromine providing better margins in both the Bromine Business and the Chemical Business as Chemical prices should follow to some extend the bromine price increase, the second element is that in Q1 2015 only 2 months of the new Business were included while in 2016 they will have 3 months. These two elements should help the Q1 performance year over year and make the profit look like booming year over year, Q2 will be more interesting as there is no Chemical business addition and the year to year comparison will be more reflective of the true growth of the Business revenue and profit wise. The strong price of Bromine should definitely help making Q2 a strong quarter too but the comparison year over year will certainly be less impressive. Anyway only about a week to wait and we will see.

    Sentiment: Strong Buy

  • Reply to

    More and more....

    by chairmanbarack Apr 29, 2016 11:37 AM
    alan74z alan74z Apr 29, 2016 12:27 PM Flag

    I agree with you, yes the Chinese authorities do not want this wealth to leave China and are making it hard for companies to pay a dividend if all of their cash and their income is in China and in RMB, companies with foreign currency revenues and profits have more flexibility ....

    Sentiment: Strong Buy

  • Reply to

    Bromine price up...

    by sevendaysisall Apr 11, 2016 4:58 AM
    alan74z alan74z Apr 29, 2016 12:16 PM Flag

    I am as frustrated as you are, I have given up seeing any significant action like a stock buy back, a dividend, a dual listing in another exchange, etc... until the end of the year but if by the 4th quarter when they will have the funding for Daying county and certainly better view of what Daying county can be as an opportunity, if they do not take a significant action to drive the stock price up, I could give up but right now I will not sell a single share and I have been buying a few more at the current price as I feel the risk is limited on the down side and the probability of seeing a higher stock price has better odds but by Q4 I will reassess my position.

    Sentiment: Strong Buy

GURE
1.50+0.03(+2.04%)May 27 3:59 PMEDT