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Gulf Resources, Inc. Message Board

alan74z 26 posts  |  Last Activity: Dec 12, 2014 2:32 PM Member since: Feb 2, 1999
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  • Reply to

    my take on Q3 2014 earnings

    by alan74z Nov 7, 2014 9:14 PM
    alan74z alan74z Nov 7, 2014 9:29 PM Flag

    second part:

    The thing that made me happy is that they finally spoke about an important acquisition in the Chemical segment, they said it should be completed by the end of the year, so less than 2 months to go: "Currently the Company is in discussions with a large sized chemical company based in China majored with TMP crude product and TMB. We intend to enter into an acquisition agreement by end of the year. The Company is also doing deeper prospecting on its well project in Sichuan, in order to evaluate the underground resources besides bromine"
    Now I want to find out what "large sized" means in term of cost and production facilities/revenue opportunity. I also am curious to find out what other underground resources they are looking at besides Bromine in Sichuan, they are a Bromine and crude salt company, are they thinking of starting a new Business with other resources, just curious. I doesn't mean that I would like them to diversify in other resources as their core competency is with Bromine but curious to see what it is. All this could justify the use of some of their accumulated cash. If by the end of the year they announce a 10's of millions acquisition of the Chemical company with good revenue and profit prospect, then I would be happy and so should the market as they would finally put their accumulated cash to a good use instead of sitting idle like today and I would be OK (I didn't say happy, just OK) with no dividend or stock buy back even if I think such a buy back would have been a great opportunity at the current stock price.
    Anyway, Q3 earnings once again are in line with my expectation, now I will wait and see if their acquisition announcement is going to happen as said and what are the financials behind such an acquisition, so I can reconsider my 2015 revenue and earning expectations. Sichuan news is right now highly discounted in my view but let's see if they can surprise me positively.

    Sentiment: Hold

  • First of all no big surprise as expected, Q3 looks a lot like Q2, comparing to Q3 2013 has to be adjusted for the relocation of factory payment that distorted Q3 2013 earnings so a comparison to Q2 is more accurate to see trends, the trend is flat, total revenues went down by 2% from Q2 to Q3 driven by crude salt down by 9%, Bromine and Chemical down around 1%, so flat. COS went down too by 3% resulting in gross margin $ to be flat. then G&A was up by $190K and they wrote off some materials that they replaced as part of the project improvement for $663K which is what brought operating down from $7.6m to $6.7m, without this write off the operating profit would have been pretty flat too, like at the end of Net Income. So as I said no positive or negative surprise here, their average bromine price at $2,885/ton or around 17,500 RMB/ton was not a surprise and is pretty close to what it is today for Q4, paving the way again to an uneventful Q4 in term of revenue and profit. By the way now over 60% of the profit is coming from the Chemical Business and unless the price of Bromine and crude salt turns around this should now be certainly the on going picture, which is not bad as the Chemical business is less volatile and should provide more consistent profit over time.
    Now looking at cash flow which is more interesting, they generated 9.4m of operating cash flow despites an increase of $3m of AR, but they used $6.5m as part of their improvement project, resulting in roughly only $3m in increased cash from $129m to $132m, still $3.36/diluted share !
    to be continued .....

    Sentiment: Hold

  • Reply to

    response from the company to my letter

    by alan74z Sep 4, 2014 9:03 PM
    alan74z alan74z Oct 31, 2014 12:36 PM Flag

    FYI, I sent a new email this morning preparing for the coming Q3 earning release and conf call:

    "Hello Helen,

    As we are now approaching Q3 earning release and conference call, I wanted to make sure that Management is aware of shareholders’ expectations in term of Business/cash strategy update. If no acquisition is announced or no significant investment plan for the $130m+ cash is announced , shareholders will expect some discussion around cash dividend and/or stock buy-back to find a better use for the current cash sitting in a bank and creating no shareholder value.

    Could you make sure Management and the Board are aware of those expectations, not discussing it would certainly impact Management’s and the current Board’s credibility with shareholders.

    Thank you"

    I am willing to continue increasing the pressure and I believe we could have enough shareholders to put pressure on the current Board regarding this topic. The goal would be to use the shareholder meeting and the election of the new Board as a way to put pressure on them and show them we want them to listen to us or we could build support to unsettle the current Board. Let's hope we do not have to come to this kind of confrontation but it is time to increase the pressure.

    Sentiment: Hold

  • alan74z alan74z Oct 7, 2014 1:09 PM Flag

    I rarely read this message board anymore as it is a bunch of negative people with little understanding of what is going on and pretend they are experts, and when they start attacking people who are decent people doing their job even doing a pretty good job like Mr Seiden, then I cannot stay silent.
    Just a few key points that seem to be ignored or worse falsified by those people. If you believe this company is not a fraud, then the last reported assets in 2011 were showing over $100m of current assets most of it in cash or cash equivalent. If you believe it is a fraud why do you care as there is nothing to recover, just move on, if you are long sell your shares if you are short don't know what you are waiting for anyway.
    So yes Mr Seiden has spent $300K already and certainly more could be spent before we see some recovery for the shareholders but again put this in comparison to the $100+m of current assets and a company market value today of $8m, so even if he spent $1m or $2m to recover most of the assets, shareholders would still get the bulk of it.
    Then one thing these people do not tell you or perhaps don't know is that the group of 50+ shareholders who supported the legal action and the appointment of Mr Seiden as receiver paid only $25K as a retainer to Mr Seiden which means that whatever money he is spending paying even other companies working with him is money that he is willing to risk assuming he will be able to recover some assets to pay for the bills. So in some way the higher the bill is the more incentive he will have to get the company to cooperate or lose control. If like some people say he will recover nothing as there is no money to recover or Ren doesn't have to comply, so then he will never get paid excepted for the $25K the shareholder group gave him !

    Sentiment: Hold

  • alan74z alan74z Oct 7, 2014 1:21 PM Flag

    and finally what I find also terrible about this message board is all those negative people, not only keep insulting people who have had the decency to jump in and become public like Mr Seiden or the shareholders who signed their name on the legal documents, while the people attacking them are doing it under pseudo anmes without ever providing their names or reason for bashing those people. Anyway this is my venting for the day, I should not have gone back to this message board and read these insulting messages and will certainly not come back anymore. Nevertheless I have to acknowledge that this message board has been key to form the shareholder group and enable us to start this legal action and therefore there used to be real shareholders who were reading it (they gave us their name, address and number of shares they own) so if there are still some real shareholders reading this message board, I wanted to let them know that they are not alone and we shareholders are going to drive this process as far as we can go with the goal of ensuring that all shareholders (US and Chinese) get what they deserve. We don't know if we will succeed but at least we are making progress compared to where we were when the company went dark and refused to talk to us, the real results will be when money is given back to shareholders one way or the other and the value of their holdings is closer to the asset value of the company.
    By the way I have put all the bashers on ignore so won't see their posts anymore as frankly those posts are not worth my time.

    Sentiment: Hold

  • Reply to

    No Questions on call

    by joeski496 Nov 10, 2014 8:32 AM
    alan74z alan74z Nov 10, 2014 11:04 AM Flag

    I was disappointed that there were no questions, I would have liked to know what resources they are looking for besides bromine in Sichuan at least. My fault as it was at 5:00am my time and I just came back home late last night so was not able to join the call. I will make sure I join the Q4/10K call especially when we will know by then what this acquisition is about, company, products, price, cash versus shares. This will be the call where we should have all the hard questions.

    Sentiment: Hold

  • Reply to

    Another $5M to the coffers

    by gocoltslionssuck Nov 10, 2014 11:23 AM
    alan74z alan74z Nov 12, 2014 2:54 PM Flag

    I tried to send you the email address of Helene but I am being blocked by this message board, it starts with beishengrong, is it what you have ? she is usually pretty responsive, talked to her a couple of weeks ago.

    Sentiment: Hold

  • Reply to

    Added More Shares

    by tradelogic2001 Sep 25, 2014 2:48 PM
    alan74z alan74z Oct 3, 2014 12:24 PM Flag

    Just to keep you informed, I received an email Yesterday from the company saying that right now they are on vacation for the whole week but that management and the board "will have a discussion and make a decision soon" this was regarding my email telling them that they better have a significant acquisition this quarter or announce a dividend like CGA or other form of action providing shareholders with value. So let's see what they will say when they return from vacation and if nothing is said the next earning call is when we should grill them on the topic. The only thing that made me feel a little more optimistic is that even during a major holiday, the company sent me an answer which frankly I didn't expect until at least next week. Hopefully they are getting plenty of requests similar to mine and feel the pressure. I had also told them that I was speaking for more than just myself as I have already received support from other shareholders representing close to 3% of the shares without even having started a concerted action.

    Sentiment: Buy

  • Reply to

    Another $5M to the coffers

    by gocoltslionssuck Nov 10, 2014 11:23 AM
    alan74z alan74z Nov 11, 2014 1:04 PM Flag

    I agree 100% with you, the balance of sellers versus buyers is still on the seller side, therefore the continued selling as there are still lots of unknown, getting the details behind the acquisition if they show that the company is really expanding and projecting higher revenues and earnings per share after this acquisition and start using this idle cash to deliver on their growth strategy, then we should see less uncertainty and certainly a seller versus buyer moving to a buyers' advantage meaning an increase over time of the stock price. Again this is if the acquisition is large enough, looks like a good deal and a good use of the cash (meaning low or no stock issued for the deal and good financial projections) and is closed by the end of the year as told. The stock price now at 2 times projected current earnings and now close to 1/3rd of the cash value doesn't represent an economic price but an emotional price where people have discounted the financials significantly and consider that such financials are highly questionable. I am still on the camp of those who believe based on industry reports that GURE is a valid company and the financials are accurate but I agree that management doesn't really care about the US shareholders, at least it is not their first nor even second priority, I see it as kind of pretty last one and do not expect them to do anything about it in the near future.

    Sentiment: Hold

  • Reply to

    Non Event

    by gocoltslionssuck Nov 17, 2014 9:52 AM
    alan74z alan74z Nov 17, 2014 11:16 AM Flag

    Yes this is my name, and if I were a manipulator I would hide behind a pseudo like you do not go public as I did. Anyway you are on ignore right now as I have nothing to do with people like you, just here to criticize/insult people for sharing their opinion or teaming up with other shareholders to defend their interests against bad management of these companies which this message board were supposed to be about.

    Sentiment: Hold

  • Reply to

    Share Repurchase Program Renewed - $1.20 target

    by puzzle4free Nov 17, 2014 8:35 AM
    alan74z alan74z Nov 17, 2014 10:59 AM Flag

    I agree this is just to avoid delisting, yes they increased the target price to $1.20 so what, just a little higher than the previous floor but it will in no way raise shareholder value just limit the risk of going below $1.20. The true test of their focus on shareholder value will be the acquisition, what they are buying, how much they are paying, what impact the acquisition will have on the revenues and profit but also very key how they are paying for it, if all cash, yes it will help the stock price and enhance shareholder value if mainly in shares at the current price of $1.20, it will destroy current shareholder value given the current book value of the company it will dilute potential shareholder value of the current shareholders significantly. So I am not over excited by the buy back announcement, just knowing that $1.20 could be as low as the stock has gone for now and it is now very comforting when it was at $2 in early September (!) but the acquisition is still my main concern.

    Sentiment: Hold

  • Reply to

    No dividend.....

    by cyclopz_n_taz Nov 7, 2014 7:43 PM
    alan74z alan74z Nov 8, 2014 11:26 AM Flag

    Yes they always have this in the 10Q quarter after quarter and in fact 2 years ago issued new shares for 50% of the price of the new production facility ($5m cash $5m shares) which they said was requested by the seller as the price of the shares was at $1.29 at the time. I do hope the new acquisition is mainly in cash with little stocks as they have the cash, if it is with a significant amount of stock, I will drive a campaign to have GURE's Management Buy back those shares if the price remains where it is with the cash that they will not have used unless the acquisition is for over $100m+ and take a significant portion of their cash but seems unlikely to be that high.

    Sentiment: Hold

  • Reply to

    Another $5M to the coffers

    by gocoltslionssuck Nov 10, 2014 11:23 AM
    alan74z alan74z Nov 13, 2014 2:48 PM Flag

    My only concern is that if the purchase of the Chemical facility is going to be part cash part stocks, there could be an incentive for whoever is associated with the deal to push the stock price down as much as possible before the deal closes to get as many cheap shares as possible for the deal. This is something that I will want to understand when they announce the purchase and if any insider is part of the deal and get some of the cash and stocks, I would seriously question what happened before the deal and would submit an official complain to the SEC as it would be crime but let's see what the deal is about. I will certainly inform IR that I am keeping an eye on this unexplained stock movement and I am ready to step in if they did something wrong.

    Sentiment: Buy

  • Reply to

    Non Event

    by gocoltslionssuck Nov 17, 2014 9:52 AM
    alan74z alan74z Nov 17, 2014 4:55 PM Flag

    Thank you for the nice messages, yes I agree I have a tendency to be on the optimistic side but if I am deceived by the company I am willing to fight them. After this last personal attack I was ready to give up this message board and stop sharing my analyses and opinions. I will put these attackers on ignore and it will hopefully make this board at least for me more valuable. I like people coming up with different opinions from mine and even if I do not see things the same way, I do not ignore what others have to say as I know I cannot be always right, they could be right and it helps me forming an opinion over time. I only like people who have a real contribution based on perceived facts or probable scenarios not emotions and there are several people on this board with who I have been debating in the past and for who I have a lot of respect even if we have different views but I hate personal attacks and insults. Thanks again for your support. You will certainly not hear from me until we know what this acquisition is about.

    Sentiment: Hold

  • Reply to

    Added More Shares

    by tradelogic2001 Sep 25, 2014 2:48 PM
    alan74z alan74z Oct 1, 2014 12:19 PM Flag

    I also added some and will continue to add some if the price continues falling but I am approaching my maximum allocation for GURE, I am of course not going to sell a single share but could sit on the sideline until the company's 10Q for Q3. I also this morning sent the company a new message sharing with them the China Green Agriculture announcement of $0.10/share or about 20% annual payment on their depressed market price and the statement of the Chairman and CEO saying that they are doing this to reward shareholders for their patience. CGA has a lot less cash than GURE, they also have debt and are going through a major channel realignment including the introduction of online selling that could be disruptive to their existing Channel but they still decided to pay this dividend, this is showing serious commitment to shareholders. GURE is sitting on a huge pile of cash and no debt, yes they have stated that they want to use the cash for buying production assets but have not bought anything for 2 years, so again unless they announce such a significant asset acquisition very soon, they have to consider using the cash. I would prefer a Buy Back but would take a dividend too. If they declared a $0.10/share quarterly dividend it would cost
    them less than $4m quarter while they have operating cash flow of $10m a quarter and certainly more than $130m in cash by now.... We will see what they answer but this has to be put again as a topic at the next quarterly earning call if no major acquisition is announced.

    Sentiment: Buy

  • Reply to

    my take on Q3 2014 earnings

    by alan74z Nov 7, 2014 9:14 PM
    alan74z alan74z Nov 8, 2014 11:34 AM Flag

    I agree, let's wait until we see what this acquisition is, how they pay for it and what projected impact it will have on revenues and profit. We should have less than 2 months to wait anyway. I am going to hold on my shares until such a time for sure and will review what to do next based on what they do.

    Sentiment: Hold

  • Reply to

    response from the company to my letter

    by alan74z Sep 4, 2014 9:03 PM
    alan74z alan74z Nov 3, 2014 4:02 PM Flag

    I will set up an email and a distribution list if they do not talk about their cash strategy after Q3 results and we will see how many people would be willing to join and start an action, we will have to decide what action to take, my guess is that it should be something related to the annual meeting and the election of the Board after they have filed their 10K, so not immediately but it takes time to get something like this organized. Hopefully just the threat of shareholders organizing will convince them to change attitude.

    Sentiment: Hold

  • Reply to

    response from the company to my letter

    by alan74z Sep 4, 2014 9:03 PM
    alan74z alan74z Oct 31, 2014 3:29 PM Flag

    fully agree with what you are saying, time to force them to change attitude or start a shareholder action.

    Sentiment: Hold

  • Reply to

    Another $5M to the coffers

    by gocoltslionssuck Nov 10, 2014 11:23 AM
    alan74z alan74z Nov 14, 2014 3:34 PM Flag

    You are not a fool, we are all in the same boat, there is for sure plenty of corruption in lots of these companies but there is also a lack of understanding or concern for what to be a US listed company with shareholders means. The Insiders think that they still own the whole company and in some way can do whatever they want without caring about shareholders, even sometimes things that could hurt those shareholders and sadly enough small shareholders have little to say and little control. I am trying with other shareholders a few things with companies that went dark and we will see if we succeed to make some major changes on the way the company is managed, including taking control from the Insiders which will for sure shock them but it takes time. If we do succeed this could be a warning to all these Chinese companies listed in the US and we should in fact use it to show them that they have to stop ignoring their shareholders but until we have a success story, I have low hopes that these companies will focus on shareholders' value. It also makes me sad to see what is going on but I at least want to try to fight it, not sure we will succeed but at least we will try.

    Sentiment: Buy

  • Reply to

    Another $5M to the coffers

    by gocoltslionssuck Nov 10, 2014 11:23 AM
    alan74z alan74z Nov 13, 2014 2:22 PM Flag

    OK I know I perhaps should not but at the current price I started placing a buy order at $1.17 as even if there is still a lot of unknown with this Chemical facility buying, I know that the company will buy back if the price reaches $1, they still have a $2m authorized stock buy back that they have never used, so the downside seems now less than the upside, again in my view and I understand if people disagree but I am the one taking the risk and it could now become worth the reward as I think that the company is in a better shape than when it was between $2 and $2.50 at the start of the year, so if it just went back there this is a 100% return versus a potential 17% loss if it goes back to $1. So moving from a hold to a buy at this price (below $1.20)

    Sentiment: Buy

GURE
1.02-0.01(-0.97%)Dec 19 4:00 PMEST

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