Asian Citrus Holdings Ltd EPIC ACHL

WEB SITE : http://www.asian-citrus.com/gyen/index.php

Shares in issue circa 61 million

Interim period end 31/Dec

Full year end 30/Jun

AGM 14th Nov 05

Est next int : 29/03/06 Est next prelim : 11/10/06

Diluted EPS for year end 30/06/05 34p

NAV : 126p per share

PE ratio : 3

Info : LINK

In my opinion this could be a bargain and a potential large riser within 12 months if the sun keeps shining. Its a plantation share yes, so its not a trading share but one to invest in by tucking a few k away, and as a plantation share it has its risks, the natural occurring type ! But on a last year PER of times 3.52 on the diluted EPS figure there is too much risk in the price and a times 15 rating of current year forecasts would be more appropriate. The market in China is of course massive and oranges and OJ are only now starting to become more popular as the trend of fitness and vitamins starts to take off in China.

The potential is massive and the new supermarket agreement (LINK HERE) shows that margins are improving in the form of direct to supermarket deals, and that a deal with a supermarket chain (Guangxi is but a tiny province of China with a very small population level compared to others) in one province can take up a large amount of production.
The other benefit is that it is well known that the RMB will be appreciating to the US dollar over time, gradually. The RMB is at near historic high levels against sterling due to the weakness of the dollar and the conversions in results are at 14.25 where a more normal level is around 12 RMB to the pound (I can still remember when we used FEC and still have some locked away somewhere ).

The rise of the RMB over time will again assist in sterling profit terms. The company has also stated that from year end 2006 a dividend will commence being paid so this all adds to my large rise within 12 months cauldron thinking. I think Evo forecasts will be beaten as well.

Evolution Securities forecasts pre-tax profits of 14.6m for 2006, with EPS of 24p and a dividend of 7.3p.

People will say plantation, people will say China and a multitude of reasons of risk but from my experience in China ventures by Overseas Chinese (HK, Taiwan and Macau) do well and not to be confused with real foreign ventures which tend not to do well.

Final comment is a quote of the Shareholder Value paragraph of the full year results

Shareholder Value

To maximize shareholders' value, the Board is committed to observing a strict set of internal financial policies. Depending on the capital expenditure plan and working capital requirements of the Group, the Board intends to adopt a dividend policy that will recommend a dividend payout equivalent to at least 10% of the net profits starting from the year ending 30 June 2006. As opportunities
arise, management will consider different ways of fund raising in order to cater for the Group's investment needs whilst maintaining an appropriately structured balance sheet. As a yardstick, to avoid over-expansion, management considers that it is prudent to maintain gearing of less than 40% of the Group's net assets and an interest coverage of not less than four times.

But DYOR ! and remember its a plantation stock !


Major shareholders :

Market Ahead 41.96
Huge Market 40.31
Henderson Global Investors 4.28
Kingston Corporate Finance Limited 3.26

A slow but steady climb back from the lows.