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

Thanks for the post. I held FTO last year but it didn't perform for me and now out of the stock. I keep an eye on it though and also RCG. I'm looking to buy more Achl when I can free up some money.

Keep posting.

A post copied over from AFN;


justjim37 - 11 Dec'05 - 11:07 - 242 of 242

ACHL is the headline tip on the front page of The Small Company Share Watch magazine this month and is also one of their 2006 naps. (2005 naps performed well with an average peak-to-high gain of 91%)
Some highlights from the article include:
"it is easy to see why the share price could be dramatically higher a year from now......"
"The Tong family hold 42% Chaoda has 40.3% leaving ony 17.7% in the hands of the public....."
"supply of oranges has been unable to meet demand"
"plantations developed to US standards..."
"in 2002 production was 42000 tonnes and sales were 9.4m, last year was 97000 tonnes with sales of 22.6m. Evolution are forecasting sales of 27m and a pretax profit of 14.6m for the current year...."
"operating margin has improved from 49% to a mouthwatering 53% in 2005....due to very low staff costs"
"it will shortly begin direct sales to supermarkets... the first such contract has been signed...and the move is likely to generate an additional gross margin of circa 15%"
"The Tong family tell their story well and there seems a great opportunity. On a prospective PE of 5.3 its hard to disagree. Evolution has a target of 174p. Buy"

Could be a very blue day today !

Good to see your into this one Papal. You seem to like the Emerging Market commodity plays like me. Congrats on your achievement with the Champion investor competition.

Glad to see this is doing well. I'm still topping up.

tallsiii I like all of them that have potential to grow :). I see ACHL and EKA as ones that will have a good 2006.

Champ invest I am struggling this month, I have 2 large longs, the biggest being LEAD based on a trading update due this week, so if LEAD moves I might be able to get back to number 1 in the monthly spot as well as overall, if LEAD does not move its going to be a bad month, but I think it will move, maybe starting tomorrow.

Moving up again today and so far 2 MM buys.

PpP: You'll be interested to learn that Nicolas Smith, a director of ACHL, has just been appointed a non-exec director of PMK, a recovery stock I'm holding.
sd.

squidd, very interesting. Have not looked at PMK recently, will have another look.

And now, Nicholas has bought 100k shares in PMK today at the going rate 25p.

Good news there squidd.

Did he buy some more in ACHL ? There was a 500K X trade today, normally is director/institution buying when the cross trades go through.

I thought these might finish year end weaker, but looks like they will be strong, 25K MM buy this morning and a move up on the mid price buy.

Even stronger today !!

Finished today with a very decent rise, and there is still plenty of upwards movement to come from this one in 2006 (maybe even more this year)

Started today well as well, moved up strongly, 180p target ?

Gone well, to break 160p should be soon.

After having a strong run in the Christmas week I am hoping for a same again performance this week as hopefully its a sign of PI's getting in before the big boys do their January shopping. If this goes to form then ACHL should have a very strong January 2006.

Current year pr PER is around times 6.5 and next year pr PER is around times 4 so there is plenty of upside to come here.

And moving up well again today, bid has now passed 160p, could we be over 200p some time in January ? I think its very possible.

Good to see we start the year on a blue note :)

And another blue day ahead :)