One of the top companies on my wish list is a Chinese play.
– Hanfeng Evergreen: Of all the Chinese listed companies, this one is one of my favorite. The company sells slow release fertilizers in China and South Asia. The management team is great, company has a long history, big 4 auditors, good governance. The company is the leader in its industry and has a huge first mover advantage. They have a strong brand name, relationship with government, strong margins, clean balance sheet, strong balance sheet growth, and huge growth potential.
Reading the 10K and letter to shareholders, you get a sense the management has done a fabulous job building a bit moat, its brand name and product quality, and taking the right decisions to position the company for a solid long run.
One of the major problems with slow release fertilizers (SRL) is its costs. SRLs have proven that they are great for corp yield and for the environment, especially water. The biggest concern and reason for slow adoption has been the cost of SRL has been prohibitive. Hanfeng has been a leader in the industry.
I would be a buyer if i could get the shares cheaper, although I doubt that chance will come.
More reading:
– Controlled Release Fertilizers: Everything you would need to know about this group of products.
6 responses to “On my wish list, Hanfeng Evergreen”
What are your thoughts on Migao?
I ran across this one while looking at Hanfeng. I haven’t researched it in detail but was on my list of companies to look at. Will let you know once I’ve looked at it.
I would be a buyer if i could get the shares cheaper, although I doubt that chance will come.
Then shouldn’t you buy it now? 🙂
You got to be patient and disciplined. Missing opportunities is something you can live with. Getting in at wrong price could be painful. You have to give yourself enough margin of safety to protect your capital.
parasd,
I have done some research on MGO.to
They seem to have the “cheaper” fertilizer compared to HLF, but have managed to keep pricing favorable. It also helps that they are using potash (major input) at lower rates than today. It may push up gross margins for awhile.
The big question is can the market absorb all the incoming capacity expansions, and MGO keep prices steady/higher.
http://pettycash.wordpress.com/2010/08/04/migao/
Thanks for the link. I will look at it soon.
Paras