China Haisheng Juice 0359

China Haisheng Juice 0359

Postby winston » Mon Jul 14, 2008 8:34 am

Haisheng factory deal to boost juice output
Chen Liyi
Monday, July 14, 2008

China Haisheng Juice Holdings (0359), the mainland's largest exporter of apple juice concentrate, has acquired a factory in Shandong for 46 million yuan (HK$52.35 million).

The acquisition in mid-June will allow the Xian-based company to boost its annual production capacity by 35,000 tonnes annually to 350,000 tonnes a year, executive director You Yong told The Standard. He said Haisheng is seeking to triple its global market share - currently at about 12 percent - to more than 30 percent over the next few years.

To do so, the company's expansion strategy has changed from building new facilities to acquisitions. "Firstly, this will reduce our financial cost, and secondly, it will reduce competition in the industry," You said.

The factory, located in Qixia city in one of the mainland's biggest apple-producing regions, was initially priced at 100 million yuan, but Haisheng was able to acquire it for far less because it was badly mismanaged, he said.

"There are [also] large supplies of peaches and pears in the region, which will help us lower the costs of developing peach and pear products," You said.
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Re: China Haisheng Juice 0359

Postby winston » Mon Jul 21, 2008 9:12 am

Squeezing the competition
Chen Liyi; Monday, July 21, 2008

When Gao Liang went to North America as a member of a Shaanxi provincial government delegation, he was impressed by the size of the apple juice industry. If the United States can do it, then why not Shaanxi, he pondered, during that visit in 1995.

The following year, China Haisheng Juice Holdings (0359) was launched by Gao, and today, Shaanxi province alone has a bigger annual apple harvest than the United States.

China has become the biggest exporter of apple juice concentrate in the world.

"Annual harvest of apples in the United States is 2.5 million tonnes, and Shaanxi's is 4 million tonnes," said You Yong, vice-general manager and executive director of China Haisheng.

"Even though the United States is a big apple supplier, it cannot match up to the one province of Shaanxi alone."

Haisheng's nine factories are located in the biggest apple-producing regions of mainland China, the Loess Plateau, the Bohai Gulf and the Yellow River.

"Being close to our supplies helps us avoid the risks of disrupted supplies due to natural disasters," You explained.

In 2007, Haisheng built two facilities in Hennan and Anhui. Its newest factory is in Qixia, in the Yantai region of Shandong Province, one of China's top apple-growing regions. It was acquired just last month for 46 million yuan (HK$52.44 million).

You said the company is looking for acquisitions.

"Acquisitions can greatly reduce our capital expenditure and reduce competition in the industry," he said.

>Haisheng wants to increase its export of apple juice concentrate from around 12 percent of China's total at present to more than 30 percent.


To do so, Haisheng needs to increase annual production capacity from the current 350,000 tonnes to 600,000 tonnes in five years, as well as expand its product range.

"As of 2007, all products excluding our apple juice made up 4 percent of our output," said You.

"In 2008 to the first half of 2009, new products will make up about 10 percent of our total sales."

Technically, Haisheng has three products, including pear juice concentrate and apple aroma, but an overwhelming proportion of its output is clear apple juice concentrate.

That is set to change, as Haisheng has set its sights on expanding into the production of strawberry, peach and carrot juice concentrate and cloudy apple juice concentrate, under a joint venture with Japanese beverage-maker Katoaka.

According to You, 80 percent of world demand for apple juice is in Europe and the United States. In the last financial year, 51.2 percent of total sales revenue was from the United States, while Europe and Russia combined made up 28.3 percent.

You said the company is well aware of the potential that lies in emerging markets on China's doorstep.

He said the market in China has the potential top grow tenfold.

More than 90 percent of Haisheng's production is exported to more than 30 countries and clientele includes major food and beverage brands such as Coca- Cola, Pepsi, Nestle and Kraft.

The high profile list of customers gave Haisheng the impetus to list on the Hong Kong Stock Exchange in 2005, said You.

"For Haisheng to grow further, we really needed to go through the process of listing, to open ourselves to scrutiny from society and investors," said You. "Then we can learn to be more meticulous, transparent and stable."

You said the management has grown more aware of its responsibility to its investors, society, the environment and its own workers' well-being since the listing.

And listing allowed the company to raise funds for expansion.

In the last financial year, turnover and profit attributable to equity holders increased 117.9 percent to 1.88 billion yuan and 146.2 percent to 161.9 million yuan respectively.

But the company's stock has fared poorly this year, having declined 43 percent versus a 20 percent slide in the benchmark Hang Seng Index.

On Friday, the stock had its sharpest fall since starting trade on the main board in November, 2005, plunging 12 percent.

The company said it was not aware of any reasons for such movements in its share price.

"We also confirm that there are no negotiations or agreements relating to intended acquisitions or realizations dicloseable" under stock exchange rules, it said in a statement to the authorities.
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Re: China Haisheng Juice 0359

Postby winston » Mon Jul 21, 2008 9:15 am

Not vested.

Hygiene first
Monday, July 21, 2008

China produced around 70 percent of the world's apple juice in 2007, according to the US Department of Agriculture, and it supplies 42 percent of US demand, according to US Apple Association.

"In the first two years that we entered the industry, the United States came up with really stringent food safety, hygiene and chemical standards," said You Yong, vice-general manager and executive director of China Haisheng.

"A lot of Chinese juice manufacturers resisted this. Instead of trying to improve their products to meet the standards, they were hoping for the Chinese government to intervene and protect them.

"Our attitude was totally different. We felt that as the world improved and the economy developed, people were starting to care more about their health and their lives.

"So we adapted. We worked hard to improve our food safety."

Haisheng has obtained numerous accreditations for its food practices and hygiene standards, not only in China. It claims to have quality control standards higher than internationally recognized standards.

You said this has proved to the company's advantage, as last year when there was an international backlash against some food products exported from China, Haisheng's sales increased.
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Re: China Haisheng Juice 0359

Postby winston » Tue Nov 03, 2009 7:47 pm

Not vested.

Goldman has stake in China group suing M Stanley: FT

NEW YORK - Goldman Sachs Group is the largest foreign investor in China Haisheng Juice Holdings, a Chinese company suing Goldman archrival Morgan Stanley over a derivatives deal, the Financial Times reported on its website on Monday.

Morgan Stanley and Haisheng are battling in British and Chinese courts over a hedging contract.

In London, Morgan Stanley is pursuing US$26 million it alleges it is owed after Haisheng failed to post collateral relating to the renminbi-dollar hedges. The Chinese company also is suing the US investment bank in a domestic court, accusing Morgan Stanley of misleading sales.

Goldman Sachs made its first investment in Haisheng in early 2005 and its private equity arm holds 20 per cent of Haisheng's Hong Kong-listed shares, the FT said. Goldman does not have a board seat on Haisheng.

A Haisheng victory would likely embolden other Chinese companies to take action against foreign banks, the FT said.

Goldman, for example, is negotiating with Shenzhen Nanshan Power, a utility, to settle a dispute relating to oil derivatives.

Goldman and Morgan were not immediately available for comment. --

Source: REUTERS
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Re: China Haisheng Juice 0359

Postby stilicon » Wed Jan 19, 2011 10:16 pm

Taifook put a TP at HK$1,45 on Jan 7th 2010.

some extracts from their report :

i) We have turned positive on Haisheng's earnings outlook.
ii) Haisheng's production bases are strategically located in areas with an abundant supply of apples. By June 2009, the company had nine plants spanning six provinces with a total annual capacity of 350,000 tonnes.
iii) Haisheng's domestic sales represented only 5% of total sales in 1H09, implying much expansion potential.

from Taifook Report, dated 7th January 2010.
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Re: China Haisheng Juice 0359

Postby stilicon » Wed Jan 19, 2011 10:28 pm

From what ET Net says about it (ie nothing), this co. is under-analyzed.
It seems inexpensive to me, and I am looking for a good reason why it is so.

- The communication of the co is not perfect.
- The sharp drop in revenue as per the interim report 2010, and the meanwhile sharp increase in net income is bizarre. - Due to a low international price for AJC, they supposedly voluntarily lowered their sales.
- The litigation against MS over a Future loss is over.
- GS seems to hang on its just below 20% participation, which might be seen as a positive sign. (Their analytical skills are far superior than mine, and they seem to like the co)

Does anyone has some knowledge about this co. ?
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