GMG Global

GMG Global

Postby winston » Fri Jul 11, 2008 8:40 am

SINGAPORE, July 11 (Reuters) - Rubber plantation firm GMG Global may be in focus on Friday after China's Sinochem <600500.SS> said it would make an offer to buy 51 percent the firm for S$267.98 million ($197 million).
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Re: GMG Global

Postby winston » Fri Jul 11, 2008 9:08 am

Sinochem seeks control of rubber firm GMG Global
Thu Jul 10, 2008 4:30pm EDT

SHANGHAI, July 11 (Reuters) - Chinese state-owned oil trader Sinochem (600500.SS: Quote, Profile, Research, Stock Buzz) said on Friday it would make an offer to buy 51 percent of GMG Global Ltd (GMGG.SI: Quote, Profile, Research, Stock Buzz), a Singapore-listed planter and processor of natural rubber.

The offer to all shareholders will be made at a price of 26 Singapore cents per share, a premium of 16 percent to GMG's last market price of 22.5 cents, Sinochem said.

The Chinese company will offer to buy 1.03 billion shares, valuing the 51 percent stake at S$267.98 million ($197 million). GMG's two biggest shareholders, which together own 60.71 percent of the shares, have pledged to ensure Sinochem reaches its 51 percent ownership target, Sinochem added.

GMG, which has operations in Africa and elsewhere, will remain listed on the Singapore stock market, Sinochem said. GMG made a net profit of S$8.3 million in the first quarter of this year on core operating income of S$59.2 million.

Sinochem said the purchase would boost its presence in the global rubber industry while improving GMG's earnings potential.
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Re: GMG Global

Postby millionairemind » Mon Jul 14, 2008 9:37 pm

For those who like to track prices for different grades of rubber to get a feel of the impact on earnings way b4 it is announced, this is the website I use.

http://www3.lgm.gov.my/mre/daily.aspx

Homework, Homework, Homework
:mrgreen: :mrgreen: :mrgreen:

Hope this helps.
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Re: GMG Global

Postby millionairemind » Wed Sep 10, 2008 8:45 am

Published September 10, 2008
GMG Global upbeat about prospects
Partnership with Sinochem gives GMG access to China market: CEO

By OH BOON PING

RUBBER producer GMG Global is upbeat about its business prospects following China's Sinochem International taking a 51 per cent stake.

Speaking to BT, its chief executive Elson Ng said the partnership will give GMG access to the huge China market via Sinochem's established network.

Listed on Shanghai Stock Exchange, Sinochem is the biggest rubber player in China with sales of 5.6 billion yuan (S$1.2 billion) coming from the rubber segment in FY07.

As GMG already has two plantations in Cameroon and Ivory Coast that caters to the European market, Mr Ng said the partnership is a 'win-win' one, since it helps Sinochem grow beyond the Chinese market.

In July, Sinochem had made a $267.9 million bid for a majority stake in GMG - or 26 cents per share - pricing the counter at 24 times last year's earnings.

Under the joint business plan, the parties will explore new plantations in Africa and the possibility of buying up existing ones in South-east Asia for supply to Europe and China respectively.

Although Europe and the United States are already big rubber markets, Mr Ng pointed out that China is a fast-growing economy with a business potential 'that cannot be ignored'.

As it is, GMG does not have direct sales to China now.

For the half-year ended June 30, 2008, the firm reported a doubling of net income to $13.3 million, while sales jumped 72 per cent to $113.2 million.

Europe contributed some 80 per cent of its business, while North America and Asia accounted for the rest.

Following the investment, GMG chairman Yudson Gondobintoro will step down under a management reshuffle, while three new directors from Sinochem will join the new board.

They are Xian Ming - the new non-executive chairman, non-executive director Qin Hengde and executive director Li Xuetao.

Mr Ng will continue to be the president and CEO, while Jeffrey Gondobintoro will remain an executive director and chief operating officer.

Chief financial officer Danny Lo will become the CFO of the new group.
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Re: GMG Global

Postby millionairemind » Fri Feb 20, 2009 8:33 am

Published February 20, 2009

GMG Q4 earnings up 6.4%, full-year profit jumps 86.5%

By OH BOON PING

RUBBER producer GMG Global yesterday reported a 6.4 per cent rise in net income to $8.4 million on a 5.6 growth in sales for the fourth quarter ended Dec 31, 2008.

Revenue for the quarter stood at $61.6 million, while earnings per share were 0.42 cents - up from 0.39 cents a year ago.

On a full-year basis, its net income went up 86.5 per cent to $41 million, while sales jumped 47.6 per cent to $245.6 million.

During the year, its revenue was boosted by relatively higher rubber prices and higher tonnage of rubber sold.

Average selling price was $3,911 per tonne in FY2008 - an increase of $784 per tonne from the average price of $3,127 per tonne in FY2007.

Total tonnage sold for FY2008 was 62,802 tonnes - up 9,597 tonnes or 18 per cent from the 53,205 tonnes sold in FY07.

Said CEO Elson Ng: 'We made synergistic strategic alliance and welcomed Sinochem as GMG's majority shareholder.

'Propelling the alliance forward, GMG also upgraded to the mainboard. Lastly, we are very pleased with the strong set of results that the group achieved despite the prevalent global economic crisis.'

In its stock exchange filing, the group said that its performance is highly dependent on a number of factors such as global economic stability, market prices of natural rubber and production volumes which could have an impact on sales.

Other factors include the yields from the plantations and weather conditions that could impact production both from internal and external supply sources.

Due to the current global economic slowdown, GMG said that natural rubber prices had 'fallen to approximately US$1,300 as at the date of this announcement'.

While natural rubber prices, like other commodities, have declined significantly since the last quarter of 2008, and are expected to remain volatile in 2009, the directors remain confident in the longer term fundamentals of the natural rubber industry and the growth expectations in Asia.

'However, the uncertainty of demand for rubber by tyre manufacturers and other users will be a concern over the immediate to medium term.'

The group proposes a first and final dividend of 0.5 cents per share.
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Re: GMG Global

Postby millionairemind » Tue Jul 28, 2009 9:02 am

Published July 28, 2009

GMG raising $100m through rights issue
See Hup Seng also seeking funds - through rights issue of warrants


By WINSTON CHAI

RUBBER producer GMG Global and corrosion prevention service provider See Hup Seng are both in the market to raise funds of $100 million and $1.7 million respectively.

GMG Global plans to raise the gross amount through a 9-for-10 rights issue of about 1.82 billion new shares at 5.5 cents each.

The company said it plans to use the proceeds to explore acquisitions and to strengthen its balance sheet.

Sinochem International, which controls 51 per cent of the firm, has undertaken to subscribe for its entitlement. GMG's directors also intend to take up their entitlements.

Sinochem has further committed to sweep up any rights shares that are not taken up by GMG Global's shareholders.

The cash call comes at time when poor market conditions are crimping demand for GMG Global's products. The company yesterday reported a net loss of $3.85 million for the three months ended June 30, compared with a net profit of $4.94 million a year earlier. Q2 sales dived 28.6 per cent to $38.53 million, from $53.98 million a year ago.

For the first six months of the year, GMG Global's net profit fell 99 per cent to $101,530, from $13.26 million a year earlier.

In a separate announcement, See Hup Seng yesterday said it is planning a rights issue of warrants to raise net proceeds of $1.7 million for working capital purposes.

The firm will issue up to 178,128,050 warrants - at the rate of one warrant for every two ordinary shares held - at one cent each. Each warrant can be used to subscribe for one share at an exercise price of 23 cents. If all the warrants are exercised, the company will be able to raise a further $40.97 million.

See Hup Seng's executive chairman Thomas Lim, vice-chairman Lee Chee Seng and executive director Tan Ong Huat have agreed to subscribe for their respective warrant entitlements. The company's acting CEO Lum Chee Kong and non-executive director Goh Yeo Hwa have also made a similar commitment.

Collectively, the five See Hup Seng officials hold 12.3 per cent of the firm's shares.
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Re: GMG Global

Postby millionairemind » Mon Oct 26, 2009 7:44 pm

October 26, 2009, 5.43 pm (Singapore time)

GMG Global swings into the red in Q3

By ANGELA TAN

GMG Global Ltd on Monday reported a net loss for the third quarter ended September 30, 2009, compared to a net profit a year ago.

The company generated a loss of S$371,696 for the third quarter compared to a net profit of S$19.48 million the previous year.

Revenue fell 27.5 per cent to S$51.38 million.

The company had made a profit warning in July.
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Re: GMG Global

Postby winston » Mon Jan 11, 2010 7:41 pm

Not vested.

1) How stable is Cameroon and Ivory Coast ?
2) What about Execution Risk ?

=================================================

Bouncy outlook for plantation play GMG By VEN SREENIVASAN

IF THERE is one overiding investment theme which has emerged over the past few months as the global economy claws its way out of recession, it must be commodities.

All set to roll: GMG - 51% owned by Sinochem, the largest rubber producer for the China market - is the cheapest plantation play here, trading just above its NTA per share of 11 cents

Most investment houses are 'overweight' on this sector - and for good reason. The demand for commodities - both mineral and agricultural - is set to quadruple over the coming decade to feed the needs of populous and fast growing economies such as China and India.

Singapore's agri-commodity stocks are primarily regional palm oil plays. Stocks like Indofood Agri, Wilmar and Golden Agri have been running up amid bullish analysts' reports about the prospects for crude palm oil.

But one Singapore listed plantation/ commodity player appears to be cruising quietly well below the radar. This is GMG Global, the only pure natural rubber play listed here.

GMG has been a supplier of processed rubber and latex to the world's big tyre makers like Goodyear and Bridgestone. It has over 40,000 ha of landbank in Cameroon and Cote Di Voire (Ivory Coast) in Africa, half of which is rubber plantation.

It also recently bought processing facilities in Kalimantan. GMG's total rubber output is just under 70,000 metric tonnes (MT).

But what is interesting about GMG - and what the market seems to have largely missed - is its parentage.

The Singapore-listed company is 51 per cent owned by Sinochem International Corp, a Chinese state-owned enterprise which is the largest rubber player in that country.

Shanghai-listed Sinochem - with sales of over 27 billion yuan (S$5.5 billion) and assets of over 15 billion yuan - bought into GMG in September 2008. It did so for good strategic reasons.

Sinochem is the single largest rubber producer for the Chinese domestic market, commanding just over 10 per cent of China's rubber supply. In 2008, it supplied 325,000 MT of rubber to China. But this is barely enough to feed the country's growing appetite for the commodity, especially from the automotive sector.

China is now the world's largest automotive market, with total vehicle sales in 2009 of some 13.5 million - well exceeding that of the United States. And this is expected to grow at 15 per cent annually over the next 10 years.

Total natural rubber consumption in China is around 2.7 million MT, or 27 per cent of global output. And the only domestic rubber source is some 500,000 MT from Hainan, in southern China. The rest is imported.

This demand has been a major cause of the doubling of global natural rubber price over the past 12 months.

With China's rubber consumption projected grow at around 10 per cent over the coming decade, the country has to continue importing substantial amounts of natural rubber to meet its demand. This is why Sinochem made the strategic acquisition of a controlling stake in GMG in 2008.

Today, GMG is the Chinese state-owned enterprise's international platform for sourcing and supplying rubber for country's national consumption. But to play its role effectively, GMG needs to more than triple its output to around 250,000 MT. It appears to have the means to do so.

Following a $100 million fund raising via a share placement last year, GMG is sitting on a cash-pile of some $170 million.

It is already in talks with potential sellers of processing facilities and plantations in South-east Asia, and recently bought one plant in Kalimantan. At least a dozen more similar acquisitions could be in the pipeline in Thailand and Indonesia over the next 12 to 18 months. Meanwhile, GMG still has another 20,000 ha of land in Cameroon and Cote Di Voire which have yet to be planted.

The company has virtually no gearing, and made $41 million profit in FY2008, after raking in $22 million in FY2007.

But FY2009's numbers could be depressed as the company found itself at the wrong end of forex moves and was locked into long-term unfavourable supply contracts with global tyre makers. However, these commitments have been gradually wound-down.

Meanwhile, the stock is currently trading just above its NTA per share of 11 cents, making it the cheapest plantation play here (compared to peers which are trading at 2.5 times and more). Despite its attractive numbers and promising prospects, this is a company which gets scant coverage from analysts.

But the recent stirrings by its stock suggest that some of the more savvy investors may be starting to take notice of this rather reticent and low profile company.

Source: Business Times Singapore
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Re: GMG Global

Postby millionairemind » Mon Jan 11, 2010 7:47 pm

winston wrote:Not vested.

1) How stable is Cameroon and Ivory Coast ?
2) What about Execution Risk ?


I have a major issue with GMG's management.

I have a pretty decent position back in 2007 when commodities was booming. The stock was back then trading at all time high. The company was having bad yields problems in its plantation due to poor weather in the Ivory Coast. While the stock broke new high, the management kept mum about its problems till 2 weeks before the release of the results.

The stock tanked 20% in one day and I lost alot of money on that trade.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: GMG Global

Postby Musicwhiz » Wed Jan 13, 2010 1:03 am

millionairemind wrote:
winston wrote:Not vested.

1) How stable is Cameroon and Ivory Coast ?
2) What about Execution Risk ?


I have a major issue with GMG's management.

I have a pretty decent position back in 2007 when commodities was booming. The stock was back then trading at all time high. The company was having bad yields problems in its plantation due to poor weather in the Ivory Coast. While the stock broke new high, the management kept mum about its problems till 2 weeks before the release of the results.

The stock tanked 20% in one day and I lost alot of money on that trade.


Thanks for the info. Shocking indeed! They shouldn't keep quiet on such material issues. Tsk tsk! :shock:
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