Is it just me or was the last company ann actually extremely positive. I have been waiting to see the comments of some soul who is more talented at reading into these things than myself but I think this is way off the radar of the average punter or even micro cap trader for the moment.
So here is what I personally like about it;
'The 6 month review has identified a continued turn around in the performance in the Puneng's operations, with the months from April 2010 to September 2010 figures showing profitability.'
So they are looking at purchasing a company that is already turning a profit which is awesome as many start up company's take years just to achieve this or never will.
'This is an important turn around especially taking into consideration of the expansion of the plant, which is due for completion in the first half of 2011.'
The plant is already being updated which would have been a major cost and this will lead to future increases in profit.
'The subsequent increase in production has been forward sold as Puneng has entered into a number of forward Sales contracts for Grade 2 Coking coal. These companies include Xiling Steel Group Limited, Jilin Steel International Trading Limited and Jilin Xin Da. The aggregated minimum contract amount is as follows: 320,000 tonnes in 2010, 900,000 tonnes in 2011 and 1,500,000 tonnes in 2012. The
sale contracts are executable at market price.'
So they already have forward contracts for their business, the amount of coke produced and sold each year is on an increasing scale and the pricing is at market. To me this just spells $'s and amounts that are moving exponentially upwards; especially as these are contracts for minimum or base amounts. Having forward contracts for their products shows the demand is there for future growth which is not surprising given the amount of coal that is imported into China.
So all in all it looks like a very positive due diligence report; can anyone tell me any differently? Is there anybody out there?
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