Guangzhao is principally engaged in the production and sale of Guangzhao Fast Growing Poplar, a variety of poplar with fast growing characteristics.
The business is divided into 3 segments:-
1) sale of Guangzhao Fast Growing Poplar propagated seedlings
2) sale of Guangzhao Fast Growing Poplar grown saplings
3) planned sale of timber from their Guangzhao Fast Growing Poplar*
* the cultivation of grown saplings for eventual sale as timber.
The first batch of trees will be harvest in starting of 2008.
With a total land area of 200,000 mu of land, 20,000 mu of land is due for harvest.
DBS has estimated each tree is worth RMB$50-60 and 1 mu of land consists of 110 trees.
Initial conservative estimates:
20,000 mu x 110 trees per mu x 90% ( assume 10% trees are damaged ) = 1.98 million trees
1.98 million trees x RMB$50 = RMB$99 million or S$19.8 million.
This will greatly improved the cash flow of Guangzhao in 2008.
Another 180,000 mu of land are due for harvest periodically till 2010. So by 2011, almost
180,000 mu or abt S$178 million worth of trees will be harvest.
Almost S$200 million of trees will be harvest by 2011. This represent S$200m/512m shares = S$0.39 per share without dilution, or S$0.285 assuming all warrants are exercised.
With cash flow set to increase, this will enable the board to purchase more land, and start to grow more trees for domestic consumption.
I will call for a buy with a min target of S$0.30 by 2008.
The business is divided into 3 segments:-
1) sale of Guangzhao Fast Growing Poplar propagated seedlings
2) sale of Guangzhao Fast Growing Poplar grown saplings
3) planned sale of timber from their Guangzhao Fast Growing Poplar*
* the cultivation of grown saplings for eventual sale as timber.
The first batch of trees will be harvest in starting of 2008.
With a total land area of 200,000 mu of land, 20,000 mu of land is due for harvest.
DBS has estimated each tree is worth RMB$50-60 and 1 mu of land consists of 110 trees.
Initial conservative estimates:
20,000 mu x 110 trees per mu x 90% ( assume 10% trees are damaged ) = 1.98 million trees
1.98 million trees x RMB$50 = RMB$99 million or S$19.8 million.
This will greatly improved the cash flow of Guangzhao in 2008.
Another 180,000 mu of land are due for harvest periodically till 2010. So by 2011, almost
180,000 mu or abt S$178 million worth of trees will be harvest.
Almost S$200 million of trees will be harvest by 2011. This represent S$200m/512m shares = S$0.39 per share without dilution, or S$0.285 assuming all warrants are exercised.
With cash flow set to increase, this will enable the board to purchase more land, and start to grow more trees for domestic consumption.
I will call for a buy with a min target of S$0.30 by 2008.
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