# QIN - Quintis Limited



## lazyfish (30 October 2007)

Can't find a thread on this so I will start one :

TFC is a Managed Investment Schemes (MIS) company that grows Indian Sandalwood trees in Western Australia. TFC mostly grows trees for investors (called growers), and TFC also grows some trees for itself. Indian Sandalwood is an endangered species and highly priced for its oil, which is used in famous perfume brands such as channel and Christian Dior, incense, and woodworking. The number of natural grown sandalwood tree is diminishing fast due to illegal logging activities and the price of Sandalwood tree has been going up at an aggregated rate of more than 20% a year for 5 consecutive years. Currently Indian Sandalwood is worth more than $100,000 a ton.

*TFC’s deal (simplified model)*

Each unit of land (lot) is 1/6 ha. A one off fee of around $10,000 is paid by the grower for each lot. Then, growers pay around $1200 management/leasing fee to TFC annually. It takes 13 years for the tree to mature and be harvested. The expected return (in future dollars term using TFC’s own estimation is around $200,000 per lot). Using an interest rate of 8%, we get a NPV of over $50,000 for every lot you invested.

*Valuation*

TFC reported a net profit of 12 cents EPS for 2007, EPS has been going up for 3 consecutive years. This places the company at a modest PER of just 8, before the recent issue of shares to acquire more land to grow trees. After the recent issues, the PER is just 9.1. Given the simple business model of TFC, it is clear that the limiting factor of earning potential is how much land they can lease out every year, because the one off fee is the bulk of the pie. This is not currently a problem at all as TFC just acquired Kingston Rest Property, which provided a dam and 2400 ha of land suitable for growing trees. In 2007 TFC closed its project oversubscribed at more than 525 hectares. So the new land acquisition will at least be able to supply land at the same rate for 4 additional years. TFC also pays 5 cents per share dividend, which is a little more than 5%. 

*Potential upsides*

Carbon Credits (which I think is not currently taken advantage of)

On one lot, being 1/6 of a hectare, which is around 1666sqm^2, you can fit roughly 40 x 40 trees in, assuming a gap of 1m in every direction between trees. That is around 1600 trees. A grown tree can absorb 48lb of carbon dioxide, 1600 trees can absorb around 34 tons of carbon dioxide. The lease agreement says the growers only own 50% of the carbon credits. Companies like COZ charge $16 dollars per ton of carbon dioxide per year. One unit of land would thus potentially generate $544 a year, of which $272 would go to TFC. This figure would go over a million for over 1000 hectares every year.

*Snap Shot*

184M shares, of which directors own over 47M
SP = $0.960 (30th Oct 2007)
Market cap of 176M
2007FY net profit of 19M
Director recently spent over 170k buying shares at 99 cents
9 Million Cash
21 Million Debt
Owns lots of trees and land


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## Sainter (4 November 2007)

*Re: TFC - TFS Corporation Limited*

Reading a sandalwood prospectus will give you the tree density which becomes a major factor in your CO2 calcs. Personally, I cannot see how your estimated allocation of only 1m2 per tree (10,000/ha) would be feasible. 
Cheers!


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## lazyfish (4 November 2007)

*Re: TFC - TFS Corporation Limited*

Hi Sainter,

Thanks for the interest and sorry about the calculation. I understand that the number of Sandalwood is far smaller, in fact I think it's around 500-600 per hectare. However, if I am not wrong you need to have host trees to assist the growth of Sandalwood. I didn't find anything from TFC's prospectus but managed to find some stats here http://www.wasandalwood.com/download.php?599d17cee409fb8b9ddfa72cf9049ca3
Please note this is WA sandalwood. 



> Sufficient host trees and sandalwood seeds will be planted to
> provide for an average of 625 sandalwood trees per hectare and
> 1875 host trees per hectare after the first 2 years from planting.




So I think the correct number of trees should be around 2000-2400 trees per hectare, not 1600 per unit, that's just grossly inappropriate. Sorry about that. 

Cheers


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## So_Cynical (4 November 2007)

*Re: TFC - TFS Corporation Limited*

There is huge potential for Indian sandalwood in the Aussie tropics.

When growing rare timbers its really about the timber and
the carbon benefits are just a side affect, and in the big 
economic picture are somewhat irrelevant.

Sandalwood is a parasite tree and rather difficult to grow
and slow growing...also 1 of the most valuable timbers
in the world.

good luck to those holding.


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## technologic (9 May 2008)

wise-owl.com commenced coverage of TFC today 12Mnth target of 1.65, currently trading round 1-1.05
"Valuation offers compelling upside. Wise-owl.com have a $1.65 per share DCF valuation for TFC, which is substantially above current levels. Our model is based solely on MIS sales, and excludes future harvest proceeds which are expected to be the main earnings driver from 2013 and suggests upside potential at current levels to our valuation."

I got in bout a month ago and think this one could be a goer short term and long term its prospects are astounding.


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## emu2 (18 August 2008)

I think & bet that this one has potential of becomming a very nice income producing long term Blue Chip investment. Track record to date "Classic". Ciao e.


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## bloomy88 (22 October 2008)

I am seriously considering buying some tfs corporation shares in the near future. The fact that they are growing the most expensive wood in the world is a fairly compelling argument.
Apparently their wood is used extensively in the hindu religion, not bad to have the demand of over 1 billion people.
It is also nice they have started paying a dividend
Anyone else have any views on their long term profitability?
Cheers


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## Sainter (24 October 2008)

Currently, profitability relies on selling MIS investments. This ultimately relies on them being able to grow trees in which sufficient sandalwood oil forms. The jury is still out on that feat-a case of wait and see. If it comes good, you're laughing, but if it doesn't....
I do not hold, but I own several Indian sandalwood lots purchased through ITC.
Cheers!


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## emu2 (30 May 2009)

This stock is a potential future "Blue Chip" & deserves  real research & a busy thread . Prospering high value products & partnerships. Profitable & undervalued.  ! e2


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## oldblue (31 May 2009)

The next report from the company will be crucial to its future, IMO. 
At present, its labouring under the MIS cloud which has claimed Timbercorp and Great Southern Plantations. TFC will have to demonstrate clearly that they don't have the same problems, given their own MIS involvement.
In their favour is their low borrowings and plans to be debt free by the end of 2009. If they are confident and convincing on that score I would expect the SP to firm and profitability to increase but I wouldn't quite put them in the "potential blue chip" class just yet.


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## Fool (23 September 2009)

Looks like a nice entry point. Rock solid support at $1 and plenty of people buying, see chart showing increased in volume. 

P/E of 5.4
Dividends - Final 3.00cents 100% franked ex 26 Nov, 09

Positive article out yesterday
http://www.abc.net.au/rural/content/2009/s2692945.htm


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## oldblue (23 September 2009)

I've been wondering how this carbon trading business affects TFC, assuming that something gets agreed at some point.

Presumably, TFC might be entitled to carbon credits of some value while the trees are growing but would incur a liability when the trees are harvested. Does anyone have a handle on this?


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## oldblue (23 September 2009)

One further thought on TFC.

They have a Share Purchase Plan current. $15,000 per shareholder at $1 or weighted average of the SP in the last five trading days before the issue closes on 2 Oct, if that price is lower.

A big incentive for the company to see the SP remain above $1 leading into next week's trading.


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## Fool (23 September 2009)

oldblue said:


> I've been wondering how this carbon trading business affects TFC, assuming that something gets agreed at some point.
> 
> Presumably, TFC might be entitled to carbon credits of some value while the trees are growing but would incur a liability when the trees are harvested. Does anyone have a handle on this?




I think they will always be carbon positive, because of replanting and planting in new areas. 

But I do wonder how the system works...

is a full grown tree worth more carbon credits?


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## Fool (6 October 2009)

Significant volume today, over 1mil shares traded. Last time since this stock has seen this much volume was in Nov 08 and in Feb 08.


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## Fool (12 October 2009)

Interesting report from Wise Owl for people that missed it.

http://tfsltd.com.au/library/file/research-reports/TFC Update August 2009.pdf

and 

JP

http://tfsltd.com.au/library/file/research-reports/TFC_JP Morgan_090916.pdf


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## Hedders (12 October 2009)

Not sure why this stock is getting sold down at the moment. It's 5c below the SPP offered last month. The balance sheet looks good and it keeps going in the right direction. I hope the valuation of circa $2.70 comes true, as quoted in Wise Owl!


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## Rainmaker2000 (12 October 2009)

Just a note of warning on a stock like this........

I recently ran the ruler over it and every annual report since floating.....TFC is lot too much like Timbercorp for me to have any idea what its worth....I can't value it

TIM had growing earnings and growing net tangible assets almost every year untill it was supposedly bankrupt

TIM's flaw was that it relied on regular capital infusions to grow and once the stock price died after gov regulation.......it was a self fulfilling prophesy as the banks decided they needed their money back.......and now we are selling almond plantations at half price to Singapore!!!!!!!!!

In short, TIM had insufficient ongoing cash flows, that once government killed orchard creation.......the banks decided the pyradmic scheme was off........TFC relies even more on up front money than TIM did

My point is that TFC runs off exact same model albeit.......appears with better margins

Buyers of this stock need to realise where each years growing profits come from..........

Simply, TFC derives almost all its profit each year by writing new shares, buying plant and equipment and being paid to establish an 'orchard' for investors.......and they have been making greater profits by doing more each year.

One can see the risk with this model..........I don't think one of TFC's trees have been harvested yet.........and then there is the regulatory risk......

It just takes on year, for whatever reason, TFC stops planting........and then its a basket case............yes, they have diversified a little, but not near significantly......the growth from 20cents to 90cents over last few years have essentially been fuelled by writing shares at higher prices!!!!  That's what Soros called 'reflexivity'

Just an end note:  It's still possible TFC could be a killer company......for those who analyse income statement a bit...........I'm not sure if I've ever seen a greater profit/revenue margin............it has been getting worse over the years and continues to slide...........but it does suggest TFC does very little work for a big payoff...........the killer risk is just that one year they can't plant or sell 'investment product'

Personally, as a rule I will not touch a company that continually writes a heap of shares........there are exceptions to every rule......but with so many killer stocks out there at moment, this one was easy to turn down......Best of luck to all


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## Fool (14 October 2009)

Cash‟ Revenue
        FY06	FY07	FY08	FY09	FY09 v FY08 % Change
($M)	20.73	34.65	56.82	78.35	    +33.2%


As with all stock there is an element of risk and your post has highlighted some of them. Rainmaker2000 please give some evidence to support you claims
From what I can seen there have been about ~60mil new shares created since 2006, the majority in the recent placement of 28mil and $1. 
So I don’t see how they can be making the sort of money show above from creating new shares. The maths doesn’t add up. 

Some good points taken from the ‘TFS SUCCESSFULLY COMPLETES $28.0M INSTITUTIONAL PLACEMENT’ ann
•	TFS’s first planting was in 1999 and it now manages the largest area of Indian sandalwood plantation in the world, with 1,750 hectares planted. TFS has a land bank of over 4,000 hectares
•	Its heartwood currently trades for in excess of A$100,000 per tonne on average, having risen at a compounding rate of over 21% per annum over the past 17 years.
•	TFS was the winner of the 2006 State Regional Water Award.
•	TFS was recently ranked as an industry leader in ethical and sustainable practices by Oekom Research, a leading international ratings agency.3
•	Plus alot more ++ to many to post, this was from one ann.

it is my view that someone is accumulating at below  $1 hence the increase of volume and seen in my above graphs.  
Disclaimer I hold . DYOR


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## Fool (14 October 2009)

As I thought someone is playing funny games with this stock.  Seems to be someone wanted to transfer their holding from one account to another(but the trade wasn't a cross trade). Any other ideas?


Time,Price,Volume,Value,Condition,
04:10:13 PM,0.935,1,0.94,,
04:10:13 PM,0.935,9906,9262.11,,
04:10:13 PM,0.935,12736,11908.16,,
04:10:13 PM,0.935,21229,19849.12,,
04:10:13 PM,0.935,2500,2337.50,,
04:10:13 PM,0.935,25000,23375.00,,
04:10:13 PM,0.935,3000,2805.00,,
04:10:13 PM,0.935,628,587.18,,
04:10:13 PM,0.935,25000,23375.00,,
*04:10:13PM,0.935,575000,537625.00,,
04:10:13 PM,0.935,25000,23375.00,,*    <=== the 600k shares
03:58:58 PM,0.950,1090,1035.50,,


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## Rainmaker2000 (14 October 2009)

Hi, here are some numbers.....not really making any claims as its straight from Annual reports

Keep in mind, the father of 'growth' stocks, Philip Fisher, one of his rules was only buy companies that can grow from operating cash flows

05 Report operating cash flow was $605 thousand........prior contributed equity was $14 million.........in that year TFC issued $8 million of stock

06 Operating cash flow was a mere $1.2 million......TFC issued no shares but took on over 6 million in debt

07 Operating cash flow was a mere $2.5 million.....TFC issued no shares but took on another 11 million in debt

08 Operating cash flow significant at $27 million.....then it gets eaten up by $22 million in 'lands and buildings'.........then TFC issues almost $20 million in shares.......and pays back round $7 million in debt

09 Operating cash flow $11 million......dwarfed by asset expences......then the company takes on over $30 million in debt.......which funny enough......they had to issue some more stock now to keep the bankers at bay

Just writing down these numbers made me troubled cause it was like timbercorp all over again............with timbercorp, the assurance was alway that the debt was going into assets......only the assets ended up being meaningless in a fire sale.....

It's identical here.........there is almost no free cash flow or genuine profit to speak of.....just financial engineering

I hope it turns out well for all holders


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## Junior (14 October 2009)

Another point to note is that most Financial Planners are scared to sell MIS following the collapse of TC and Great Southern...so their new product sales may struggle in the short term.  Additionally all of their plantations are in one location, they will reach a point where there's a shortage of suitable land, or the Sandalwood price will be negatively affected by a sudden large increase in supply when they commence regular harvest.


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## smalldiamond (17 October 2009)

*Re: TFC - TFS Corporation - look deeper $$$$$*

Hi team,

One of the reasons TFC is such an amazing opportunity is because 99% of investors at present don't do the full analysis or understand TFC or is business model.  TFC is poles apart form other MIS companies.  This is why TFC is on a very low PE and will be significantly rerated.  In my view as soon as news of Carbon Trust sales activities come through end 2009 calendar year - reduced reliance on MIS (also part of the business strategy...MIS is a means to an end...repeat instututions and fund interest is the model going forward).

Ask yourself the question "how and why would Merryl Lynch a significant global analyst / broker and provider of research internationally and importantly to funds / institutions / soverign wealth funds lead a placement of 28 mill shares in a company that is just another Timbercorp!"   Credibility issues?   TFC only raised 5 mill from private investors - they didn't need the money, but chose to give private investors an equal buying opportunity (fairness).

The answer to the Merrly question above -  is no they wouldn't...and more significantly look at the TFC agenda for their upcoming AGM it states clearly that Merryl not only lead the placement, but the placement was just to Merryl clients! 

In terms of the financials - the normal back of the envelope / bush accountant approach does not give you the full picture / understanding.   Analysts appear to understand the business model - theoil through the trees.  

Have a read of the broker reports on
tfsltd.com.au/shareholders/research-reports/

Again ask yourself...."Given the recent climate - would there be liability issues for Aussie brokers at least if TFC was at all like Timbercorp and they continued to publish reports with such a positive outlook / valuation e.g. $2.79/share?

The answer is clearlly no.

To answer some of your financial related questions.

I agree with you that you want a company to grow from operating cash flows, but using debt as well (if done wisely) is not always a bad thing especially if you have the balance sheet strength and cash flows to support it – which IMO TFC has.   TFC has a clear business model and plan to achieve great things - global integrated supplier of sandalwood products (I have always liked the word monopoly).

In terms of having no free cash flow – I disagree with you on this point.  Sure they had only $11 million operating cash flows at 30 June 2009 but you are not taking into account the $29.8 million that they will receive from Beyond Carbon post year end and which is sitting in current debtors – this is a timing issue only due to the change in the sales mix – if this cash had been received prior to year end that would have boosted operating cash flows dramatically.

In terms of the $11 million operating cash flows being dwarfed by Asset expenses of $15.5 million – well $8.3 million of this outflow was to buy 100% of Mount Romance.  Given that Mount Romance cost them $11 million all up and contributed full year equivalent EBITDA of $3.57 million.  A very good buy purchasing a business on an EBITDA multiple of 3 don’t you think? 

In terms of debt levels their bank debt is circa $66 million of which $19 million of this amount came bundled up in the purchase of Mount Romance.  Stripping out the unearned income and deferred tax liabilities from their Total liabilities – TFC has total cash debts (current & noncurrent) of $97 million which can be covered by current assets of $100 million .So unlike Timbercorp – TFC is not dying of debt by any stretch of the imagination. Also remember historically MIS sales are all done in second  ½ of the year – they needed the debt to cash flow their operations until sales came in – under the institutional model this may well change with sales happening in both halves.

In the coming year(s) – TFC will have to buy or lease more land and this may cost around $80 million dollars for an outright purchase.  Yes TFC will be raising additional capital to do this as well as taking on more debt.  But hey once this is completed – it will have no further pressing asset purchase requirements and in fact the Institutional Investors will be buying the land back off TFC every year freeing up more cash for growth. When this starts happening Rainmaker – you will get your wish of having fantastic cash flows from operations and genuine free cashflows – but you have to be patient.

TFC is nothing like Timbercorp – dig a little deeper - and as I have said before to others, TFC is a large uncut diamond lying their staring you in the face.  Pick it up have a good look and  off the dust and dirt on the surface (MIS environment) and you will realise a gold mine is sitting in your hand.

Point of disclosure I am a significant holder of TFC and continue to acquire shares.

Small Diamond


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## Rainmaker2000 (17 October 2009)

Small diamond........you make a few good points like TFC actually diversifying into a 'real operating business' MT Romance....using raised capital......but most of your 'looking deeper' refers to some type of faith we should have in the system......and Merril Lynch............

As for that.........why would Merril Lynch buy one sub-prime loan......or that other global bank Bear Sterns.....which does not now exist....but they do that for their own reasons.....and I rarely agree with their reasons

I'm happy to take on business risks.....but only business risks I think I can understand.......patience gets reward by the market, but not faith

The fact is TFC may develop into a great company and it may be building some great assets....and its earning may actually be 'real'....but I can't tell from the companies' financials

The company reported a profit before tax of $49 million in 09 and $39 million on 08 on operating cashflows of $11 million and $27 million respectively.......

I don't invest in companies like this.........but I realise others do so I wish you all the best


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## smalldiamond (18 October 2009)

Hi Rainmaker,


I agree with you entirely - most people do not understand the business model and without a full understanding of the model, the a/cs can be very difficult to conclude on.  That is why many retail investors are remaining shy at present ,despite positive analyst forecasts etc.  This however will change at some point - you can only deny reality for so long.  

I think the reference to mistakes of corporates in the area of financial innovation has no relevance for the analysis of TFC.  And I agree we as investors should not be buying shares for which we do not understand - this is not faith this is called gambling.  In this case again you have hit the nail on the head - TFC is currently priced by wide spread misunderstanding (even with analyst support the common view of the retail investor is - its MIS - run!) and therefore 'faith' is in effect working in the opposite direction - not interested in buying - negative faith .  However where there is genuine understanding by the investor - in my mind this only leads to one fundamental conclusion - buy and hold !

Why are they issuing shares?  Well they are being very prudent before this year's 'ruler on MIS providers and the 2010 PDS is applied by regulators' AND to pursue growth opportunities e.g land for faster expansion (institutional plantation demand could very quickly exceed land capacity) and for pushing forward on their vertical integration model / strategy.   This is all about delivering / meeting the underlying business strategy.  Land availability may become an issue....but I would rather have that problem that no buyers.  After all the institution model allows for the sale of land to the institutions at market price as part of the package.  So TFC unlike other agri land acquirers can afford to bid very competitively.  I wouldn't be surprised to see TFC come up with a very novel agreement over the 8000 hec they currently have first right of refusal on in the Ord!  

TFC remains very undervalued at present despite having done very well in the worst economic backdrop and mess in the wider MIS arena June 2009.

Junior noted they may have problems given Financial Planner hesitation.

Keep in mind June 2009 was the worst conditions for MIS.  The Financial Planners assoc (can't quite remember their name) during the height of the MIS mess reviewed their list of recommendations for MIS schemes.  TFS remained one of their few positive recommendations.  Also TFS as noted is moving rapidly away from reliance on retail MIS to funds / institutions for plantations.  While they may not have sold all allotments to retail investors June 2009, their total plantation sales targets were filled by retail and fund / institutions.

I suspect this year (now selling all year round and not influenced by tax offset buyers in last 1/4 June 2009) there will in fact be competition by retail MIS for residual access - in other words the pool and opportunity for retail investment is narrowing quickly.


SD


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## brianwh (18 October 2009)

Is there any credible data on yields and quality of product from these plantations? As indicated by Rainmaker "they have not harvested a tree yet".


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## Sainter (18 October 2009)

As I recall CALM had done some research years ago but I'm not aware of the results and I think it was only a relatively small plot. What IS of interest is that some company or newspaper clip came out a couple of months back and said they had a genetic test which could tell how much sandalwood oil a tree would produce or, I expect, a 'disposition' to how much it would produce. When I heard about it I thought TFS and ITC would be keen to do some tests-who wouldn't in their position-unless they were worried about the answer...


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## Fool (19 October 2009)

Sainter said:


> As I recall CALM had done some research years ago but I'm not aware of the results and I think it was only a relatively small plot. What IS of interest is that some company or newspaper clip came out a couple of months back and said they had a genetic test which could tell how much sandalwood oil a tree would produce or, I expect, a 'disposition' to how much it would produce. When I heard about it I thought TFS and ITC would be keen to do some tests-who wouldn't in their position-unless they were worried about the answer...




Yeah they did independent tests 2004, have a look in FULL YEAR RESULTS PRESENTATION 20/08/2009. The results came in above expectations.


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## craigj (19 October 2009)

isnt the tfs story as simple as supply and demand ?

they have a niche product that a sector in the world demands

if the forest / agriculture experts do their job correctly then the stock is a winner

cash flow is the same as a farmer waiting to sell his produce when mature


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## smalldiamond (20 October 2009)

Hi there,

Yes there is a level of uncertainty over the oil yields.  However TFS continues to collect evidence in support of predicted.  This has included sampling trees grown in the ord region (privately held trees, Forestry trial trees and their own trees).  Evidence to date supports yield meeting at least PDS assumptions.

Bear in mind that TFS has managed their grower plantations to optimise growth and yield.  Others would argue that growth and oil yield are negatively correlated.   So the jury is still out on that one.  But evidence is supportive.

TFS has demonstrated that oil has started to be produced and suprisingly in trees of a young age.   They have no reason to believe otherwise than harvested trees meeting PDS assumption.  

Also keep in mind if the oil yields are lower than expected, then the initial impact is on the grower and not TFS.   Obviously this could impact on future sales of MIS - reduced rate of return.   However the rate of return on offer is significantly above other agri schemes .....Also if rates of oil yield turn out more positive, then TFS reaps 30% of additional profits.

Yes there was an article in the paper recently on the discovery of the gene responsible for triggering oil production.   This is not the gene for production, or for looking at current oil content.   However the finding of this gene will be significant in terms of tree selection of trees going forward - seedlings etc.  Big additional bonus.

TFC is in the business of producing oil that the world is in short supply of and prepared to pay $$ for (western counrties for perfume and the east for religious / cultural practices).   However TFC doesn't just want to be a supplier of the raw commodity (which has being going up in price >20% pa)...they want to be in the value added end of the supply chain.   That is soil - to oil - to product.   There is huge potential for them to make $$$$ if they effectively control the global supply of sustainable sandalwood and own manufacturing and distribution facilities for final products.

They are currently looking into the pan (mouth wash / masala) market middle east and asia.  The pan mouth wash market is a $3 billion market alone with sandalwood mouthwash selling at a premium.  Consider the value captured by TFS having a small ammount of sandalwood in each bottle and you control the liquid gold that goes into this ....huge.

Bear in mind that TFC is being very smart and tying up competitive interest in its products.  They have signed up Lush cosmetics, French perfume house Aberville etc and now into the Middle east .....

They are also growing trees and buying land in the Ord region....the future fruit bowl of Australia....I would like to own swags of land there and be growing high value products with no water limitation!

SD

From end year presentation August 2009:

•Testing supports PDS assumptions for yield results.
•2004 -Independent testing on 14 yoKimberley-grown Sandalwood yielded the following results:
•Oil quality to international standard ISO 3518 Indian Sandalwood oil.
•In 2008 TFS tested Kimberley-grown Sandalwood trees aged from 8 –14 years (8 year old trees TFS-grown; remaining from private growers).
•Superior growth rates for TFS-grown 8 yotrees: -Double the size of private 14 yotrees in this test
-75% the size of 14 yotrees in 2004 test (at only 56% of the age)
•Yields from 8 yotrees at harvest are expected to be consistent with the PDS.


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## Fool (20 October 2009)

Hi Smalldiamond,

Thanks for your comments on TFC, very helpful in understanding more about the company.


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## smalldiamond (20 October 2009)

You're welcome,

Any questions please feel free to fire these my way and I will answer and do further research if needs be.  As noted I am a committed investor in TFC and welcome alternative views as this serves to challenge my own ongoing assumptions.

This is not about being right / wrong but sharing considerered thought.

Regards
SD


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## lazyfish (20 October 2009)

Hi SD,

Do you think you can comment on the demand and supply situation of the indian sandalwood market. The way I understand it, when harvesting begins, TFC will be producing 6.5-7.5ktons, and current demand is only about 8ktons. Don't you think that is going to have a strong negative impact on the price of sandalwood? If so, do you think they will have trouble getting people to grow them once harvesting starts?

Thanks

p.s I have taken profit on this some time ago and currently do not hold


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## Sainter (20 October 2009)

Thanks for the feedback and clarification on the gene test guys. I do not hold TFS but I own a few sandalwood plots through ITC (Elders).
Gene test would still be handy for the trees already planted-to see if they're duds or potential winners re oil producibility.

As with all agricultural schemes, there is still an element of risk. It is heightened in contrast to , say, wheat, which is very much a tried and tested crop. There is still a lot of uncertainties in the sandalwood game. Obviously I hope it works out well.


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## smalldiamond (21 October 2009)

Hi there,

In terms of supply and demand the best way to approach this question is from a macroeconomic perspective.  

It is clear that sandalwood is an important commodity and has been since adam and mohamad were boys.  The simple fact is that sandalwood oil is found in 70%+ of world manufactured perfumes (its a very effective base / frangrance fixative) and other cosmetic products.  It also has very significant cultural and religious support and use.   Aside for products made from oil, the wood itself is very valuable and is used in a variety of products through to incense sticks (spent charge after distilling oil form heartwood).

In terms of supply it is clear that natural stands of Indian sandalwood are declining rapidly through unsustainable forestry practices.   The native tree takes upwards of 50 years to mature before cutting.   The tree is also obviously of very high value so despite government efforts to manage deforestation e.g in India and other parts of the world deforestration continues.  There also remains significant levels of poaching and illegal trade going on in the background.

This of course has introduced an ethical dilema for the western perfume houses who for marketing reasons do not want ingredients associated with such activities.  They would prefer to acquire supplies of 'green ingredients' and on a contract basis / continuity of supply.

So I do not see the demand for ethically and sustainably grown indian Sandalwood demand decreasing.  In fact with the option of continuos supply there is likely to be competition between the perfume houses to gain access to this supply.  And what si the TFC strategy...entering into supply contracts well in advance - lush, Amberville and now the Middle East.

Macroscopically as you would be aware globally we have a number of countries that are stepping into the spot light, to have their day in the development sun.  We of course have India, Asia, China and the middle east.  Traditional western markets are not the growth future they once were.

With significant population, development and growth comes increasing numbers of middle class with increasing amounts of discretionary $$$.

Now sandalwood oil, its wood and products have been used by these cultures for generations.  And the use of sandalwood is less of a nice to have, but more of a must have for religious and cultural reasons. Are you aware that the Koran sanctions sandalwood as one of the few approved perfumes!  Hindus require sandalwood religiously and the Chinese were traditionally huge consumers (well until communism).

So in summary...I could go on, we have a situation where sandalwood is diminishing in supply macroscopically, increasing wealth of traditional users, a market desperate for sustainable and continuity of supply with a swag of religion and culture thrown into the mix..

Do I think prices will go down....no I don't think so. Any additional supply will be taken up by the market and in my view there will be a premium paid for product that is certified sustainable.   Sandalwood is actually a listed endangered species - CITES.

TFC will, if all goes according to plan, be for the next 15 -20 years the biggest grower of Indian sandalwood outside India and looking to be the only intergarted global supplier of sandalwood, its oil and products.


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## smalldiamond (27 October 2009)

TFC named top 10 stock of quality stocks:


Link www
tfsltd.com.au/news/view/30/the-top-stocks-to-survive-the-crisis/

SD


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## Rainmaker2000 (27 October 2009)

One of TFC directors obviously thought the price has held up well........just sold more than half a million shares, ironically just after the company tapped the market for capital......I'd choose the Bently personally


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## smalldiamond (28 October 2009)

Hi there,

Refer announcement:

tfsltd.com.au/library/file/ASX%20Announcements/Supply%20Agreement_ViroXis_281009.pdf

This announcement is real exciting....the supply agreement is at premium to spot! This says a lot - it's again about securing supply of a rare commodity. If TFC can move further into the medical demand arena and with stringent source quality control, then TFC can demand significant additional cash for its oil. 

Of course as I have said before....they are setting up a number of supply contracts at present (all can see this) east : west : perfume : religious : medical : costmetics.....

I can not think of a better position to be in than becoming a global monopoly in effect for sustainable sandalwood oil and with customers falling over themselves for the supply!

These supply contracts wil also underpin MIS investor interest and more importantly fund / institution investments through Carbon Trust and multi year plantings. 

I also hope your read the whole report....note the comment at the end. 

"In 2009, TFS entered the prestigious Forbes Asia Pacific's ‘Best Under a Billion’, which recognises the Top 200 companies from more than 25,326 publicly-listed firms in the Asia/Pacific region with revenue of less than US$1 billion."

The market is being so dumb at present with TFC...at some stage someone out there must wake up. In my opinion when Carbon Trust activities / results come in there must be a re rating.

How many positive forecasts / views for TFC can be printed and the market  refuses to believe what's staring them in the face....a diamond! Not an MIS model like Great southern etc..


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## smalldiamond (31 October 2009)

*Re: TFC - TFS Corporation - exapnding into India*

Sandalwood grower expands Indian marketREBECCA LE MAY
SMH October 30, 2009 - 7:04PM 
AAP 

A West Australian sandalwood grower is expanding into the Indian market where the fragrant plant has been all but denuded amid growing demand for its pharmaceutical powers.

TFS Corporation Ltd says sandalwood plays a major role in its Indian culture, religion and personal hygiene - opening up a ready market for the Emirates-backed company.

TFS says it has the world's largest sustainably grown plantation of Indian sandalwood, the sought-after variety named santalum album, at Kununurra in Western Australia's far north.

While native WA sandalwood, named santalum spicartum, has been exported from the state since the 1840s, it is a cheaper, inferior variety mainly used in incense and perfumes.

TFS also processes this species at its Mt Romance plant at Albany in WA's south.

With Indian sandalwood oil trading at more than $US1.7 million ($A1.85 million) a tonne on the legal spot market, TFS is throwing its efforts into its 2,500 hectare Indian sandalwood properties in the Kimberley region of WA.

It was oil from the santalum album species that TFS on Wednesday agreed to sell to Texas-based biotechnology firm ViroXis under a multi-million-dollar deal.

This was TFS' first commercial-scale contract with a pharmaceutical firm.

ViroXis will purchase up to three tonnes of the oil a year to develop a botanical drug for use as a topical treatment for viral skin infections including human papilloma virus, which can cause cervical cancer.

"If they are successful (in commercialising the drug) ... it opens up a very big supply market for us," TFS executive chairman Frank Wilson told AAP.

"There's real potential to this market."

Mr Wilson said Indian sandalwood was starting to be investigated by Western medicine after long use in Chinese herbal and Indian Ayurvedic medicine.

Sandalwood's many uses in personal hygiene, such as chewable mouth fresheners that are popular in India and Pakistan, represent a potentially huge market for TFS, he said.

Artificial sandalwood oils are used as a flavour and antiseptic in such products but cause mouth ulcers.

"Because of the dearth of natural sandalwood from suppliers in India, a lot of synthetic and other substitutes are used and there are significant adverse affects on people's health as a consequence," Mr Wilson said.

"The market for natural sandalwood in these products, a healthy product that they will love, is enormous.

"Probably the biggest single market for sandalwood oil in the world is in the mouth freshener market."

Mr Wilson said TFS was poised to penetrate the Indian market through a joint venture with Dubai-based Emirates Investment Group, which is privately owned by a member of the ruling family of Sharjah.

Mr Wilson said he expected TFS would attract other major Middle East investors as it moved away from managed investment schemes (MIS) so sullied by the high-profile collapses of Great Southern Ltd and Timbercorp.

"We're rapidly moving out of the MIS space," he said.

The tax effective schemes were appropriate for start-ups but had been over-relied upon by some agribusinesses, which had lost focus on what should have been their top priority - growing products.

"Great Southern and Timbercorp have caused enormous distress to a lot of people and they are an embarrassment to companies such as ourselves who can't help but be grouped with them.

"But our business model is entirely different.

"We use MIS as a means to an end. MIS has been a great way of building a good business.

"But fundamentally, our business is about growing sandalwood, processing it and producing oil and other by-products.

"We're not tarnished with the Great Southern stigma anywhere else in the world."


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## smalldiamond (31 October 2009)

Rainmaker2000 said:


> One of TFC directors obviously thought the price has held up well........just sold more than half a million shares, ironically just after the company tapped the market for capital......I'd choose the Bently personally






Not all Director sales are for reasons related to the company its performance or the future.....  SD


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## Rainmaker2000 (31 October 2009)

That's what's so great about investing........it's successful 'intuition' that will make you exceptional returns..........

Does the large director sell mean anything.......maybe, maybe not

What does a large contract for a product which you will harvest in the future mean much?........maybe, maybe not

Is a move away from MIS significant, or not?........personally I've always thought MIS was an ingenious tax innovation.....

I don't even get to the 'using intuition' stage on a stock like this or thinking about questions like this......until it demonstrates cash flows with some reasoning in relation to reported profit.........I could never think of investing in it......

It's always fund to be a spectator though....one learns a lot


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## smalldiamond (31 October 2009)

Hi Rainmaker....I wouldn't be a spectator on this one.

Your are correct most news / information are just indicators...tea leaves...but the summary is all positive.  Cashflow and profit on the other hand are real and present right now (you cant hide this)!  The Director sale is confusing, but as noted Director sales are not always related to a negative event.  Sometimes Directors need to diversify, have other interests etc.   They also sometime like to reward themselves given they often get shares issued at a discount.  I however get concerned when there are a number of Directors selling.  This isn't the case. This Director still owns > 2 million shares (he is a small shareholder Director).   

Movement away from MIS....well at the end of the day if you consider the IRR for a plantation investor on its own merrits...the investment makes sense full stop with or without tax incentives (a bit more cream)!  Tax incentives just happen to a bonus.   Wholesale investors aren't entering the arena for tax advantages!  

Rainmaker...get your accountant / advisor to do the cash flow analysis for you.....  Don't discount the opportunity because you don't understand the model.

All I am saying is, its great to be a sceptic and a spectator.....but in a couple of years I don't want you to be in the position of knowing you had the opportunity to invest but never understood what you were looking at....I personally would be very annoyed.  Having been investing since 1996 I have never come across such a great opportunity.  

Do the challenge at get someone to professionally advise you on the cash flow of this company / health of the company.  You will probably find your advisor will buy the shares.....my account did and he can't believe the market is so stupid!

This share WILL give you exceptional returns!  Its just a tming issue!
Like TFS said ..."they are caught up in the MIS mess...but their business model is poles apart"

SD


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## prawn_86 (31 October 2009)

SD,

Why should anyone that already invests personally and doesnt understand the model get someone else to try and understand it for them? That just adds another layer of complication.

One of the golden rules of my investing is that if you dont understand it, dont invest. Saved me from many bad stocks (ABC, Allco, BNB etc etc). Thats not to say you cant make money, but its a hassle i would rather not bother with personally.


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## Rainmaker2000 (31 October 2009)

I agree Prawn

That's the interesting issue, isn't it........I have already got the qualifications and experience to understand their model.........I don't really like to call myself an 'expert' at anything......and I do 'understand' their model......what I'm saying is that 'there is not enough in the financials for me to verify the 'profits'.......that does not mean TFS will not be a good investment at some price

As for being sad at the one that got away........that's not going to happen.....it does not work like that

As Benjamin Graham said something like 'investing is done best when it's most business like'.......

I already have a few stocks that have appreciated several hundred percent this year......I'm just focusing on my method and leaving the emotional stuff for my private life


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## smalldiamond (6 November 2009)

Hi Raimaker,

Thought you may be interested in the following by Criterion from earlier this year (pre June results):

REFLECTING on Timbercorp's demise, we're struck by the similarities between the managed investment game and a Ponzi scheme. After all, both rely on a flow of new subscriptions to maintain the caper.

MIS agri-schemes lure investors (or "growers") with a tax deduction and the promises of an eventual commercial return on the produce. Given the long lead time to harvest, it takes years before the rosy prospectus projections can be proved.

Given that Ponzi schemes are illegal and MISes aren't, we won't stretch the comparison any further. Suffice to say Timbercorp became unstuck by dwindling subscriptions, high debt and poor returns from projects such as grapes and hothouse tomatoes.

Criterion doesn't believe in guilt by association, which bring us to TFS and its lure of $US2000 per kilogram returns from its Indian sandalwood acreages in northern WA.

Widely used in perfumes and other applications including Hindu ceremonies, Indian sandalwood is in short supply. TFS has 840ha under cultivation and hopes to harvest its first tree in 2011-12.

Ord Minnett analyst Martyn Jacobs says the exit of MIS operators makes it easier for TFS to achieve its current year target of $61 million in sales. "Their establishment fee is more than enough to buy land, fund the operation and have a healthy profit margin," he says. "They don't need to sell next year's project to fund this year's expenses and don't need to raise debt to fund the project."

Ord Minnett forecasts a $44.7million net profit this year (earnings per share of 23.8c), while Foresight Securities expects $31.6 million (16.7c). Unlike Timbercorp, TFS has supported capex from its existing subscriptions, rather than relying on new ones or on debt.

"MIS operations are highly capital intensive given the up-front land purchase requirement before planting," says Foresight Securities analyst Adam Michell. TFS, however, has enough land to meet expected growth over the next four years.

Ultimately, TFS will succeed on its ability to achieve a steady harvest. A parasite requiring a host tree, Indian sandalwood is hard to grow- buy.


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## Rainmaker2000 (6 November 2009)

How many of these do you own Smalldiamond?  You seem pretty committed

Although Criterion may accidently get a stock call right once and a while does not mean that Criterion is not among the worst stock tips around.....these stock tips are given out for free on the news dot com website

The beauty of Criterion is that thankfully no one, including the columnist, is forced to put any money on these recommendations.

I actually agree with Criterion that TFS may be building a lucrative business.....I also agree with Criterion that I can't find any evidence on the balance sheet and cash flows of this fact......None is cited by Criterion.

Your red highlight seems to emphasise no need for debt......Well, why would a company need debt when it continually writes so much equity....I note the company is not debt free also

Which brings me back to my first point: any company that continually writes shares makes it almost impossible to project what earnings per share one will get from one's investment today.........it's just diluted and diluted right through the rainbow

That is not investing to me or to some of the stockmarket classics


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## smalldiamond (6 November 2009)

Hi Rainmaker.

Yes very committed...  

I think we will just leave it there...I have run out of energy trying to explain debt / equity / difference in timing between MIS income coming into toward end June and capital expenditure at other times of the year e.g. growing the business - such as buying Mt Romance, land etc etc. Supporting grower debt / selling grower debt, re establishing grower debt in difficult market GFS. Getting the business bullet proof for this year's MIS / fund interest and more business growth development.

That it for me.....won't be back chatting here I'm afraid....

All the best and one last before I go 'do look hard into TFS'.... IMO you will be smiling...but if 't own the shares...well there is always the one that got away.  And 'if by chance TFC doesnt ome to be be....well then you will hear a 'bugger' uttered in the ditance!

Oh I may come back in a year or so...just to check in ;-)

:cool
:SD


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## notting (26 July 2011)

*TFC*

Performing a little softly given allot is about to start happening for this one


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## oldblue (26 July 2011)

*Re: TFC*



notting said:


> Performing a little softly given allot is about to start happening for this one




OK, I'll bite.

What is "about to start happening with this one" or is that just an attempt to start some discussion?

I've followed TFC, at a distance, for some time now so have more than just an idle interest in their prospects.


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## Tyler (27 July 2011)

*Re: TFC*

Bought in at .84 sold at .9 due to the raising of the debt & cashflow concerns (it has now taken on waaaay too much debt) also would you not rather be the debt holder
11% interest & options at 1.30, so you get your 11% every year & if it does turn out to be a success you get upside in share price (if the business survives)


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## notting (16 January 2012)

Their operators used to say 'bring on 2012 when we start it all up.'
Seemed like a great idea.
Nobody loves me at .52!


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## skc (16 January 2012)

notting said:


> Their operators used to say 'bring on 2012 when we start it all up.'
> Seemed like a great idea.
> Nobody loves me at .52!




Pretty hard to find another sector like forestry that has a higher proportion of dogs.

May be fisheries or uranium.


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## notting (16 January 2012)

Yeah but it's almost not forestry even though it requires land and trees.
Pure sandalwood is great stuff and is loved in the east and Middle East and is valued highly as well.
I’ve bought and sold it a few times and lost interest owning it when they started carving off peaces to major share holders and leaving retail holders with less, but still am keeping a lazy eye on it.
It could be a goer once it is producing reasonable volumes.


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## RBgO (7 August 2012)

anybody still here?


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## So_Cynical (7 August 2012)

RBgO said:


> anybody still here?




I'm still here....waiting for this mob to fall over.


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## burglar (7 August 2012)

RBgO said:


> anybody still here?




We are here most nights.


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## RBgO (7 August 2012)

So_Cynical said:


> I'm still here....waiting for this mob to fall over.




Why "this mob"?


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## So_Cynical (7 August 2012)

RBgO said:


> Why "this mob"?




RBgO "this mob" are in the tree growing business, the same business that the following mobs were in.


TIM - Timbercorp (In Liquidation/Administration)
GPL - Great Southern (In Liquidation/Administration)
WFL - Willmott Forests (In Liquidation/Administration)
ARK - Ark Fund (Rewards Group) (In Liquidation/Administration)
FEA - Forest Enterprises (In Liquidation/Administration)
ELD - Elders (Now Trading at 23 CPS but were $14 in 2008)
GNS - Gunns (Last Traded at 16 CPS currently in suspension and have been since March)

Get the picture? Do you see where im going with this?


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## oldblue (8 August 2012)

Fair comment, F-C. Not great company for TFC to be keeping!

It's a long time since I looked seriously at them but it could be argued there are several important points of difference between TFC and the companies that you mention eg TFC's admittedly slender profitability; a producer of valuable sandalwood; owner of a sandalwood oil processor; less dependence on tax-driven sales.

Not one that appeals to me but I wouldn't write them off at this stage.


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## Junior (8 August 2012)

oldblue said:


> Fair comment, F-C. Not great company for TFC to be keeping!
> 
> It's a long time since I looked seriously at them but it could be argued there are several important points of difference between TFC and the companies that you mention eg TFC's admittedly slender profitability; a producer of valuable sandalwood; owner of a sandalwood oil processor; less dependence on tax-driven sales.
> 
> Not one that appeals to me but I wouldn't write them off at this stage.




Without looking at the research....if they've lasted this long maybe they'll surivive.  Those other groups all fell in quick succession.  Once the big ones (great southern and timbercorp) went down banks withdrew funding from the lot.  What are TFS debt levels like?  Where did their revenue come from last year?  MIS sales are dead so they must have other sources of revenue.


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## So_Cynical (8 August 2012)

Junior said:


> What are TFS debt levels like?  Where did their revenue come from last year?  MIS sales are dead so they must have other sources of revenue.




Ok from memory (looked at them about 4 months...again) There debt is insignificant and there funding is totally non MIS sales based  instead they have a handful of large private funders, supposedly including a sovereign wealth fund. 

Now don't get me wrong here...i like Sandalwood, i like the "story" and the business makes sense to me...in general im a supporter but cant see myself as an investor..i don't mind a punt but everyone has to draw the line somewhere.


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## oldblue (9 August 2012)

So_Cynical said:


> Ok from memory (looked at them about 4 months...again) There debt is insignificant and there funding is totally non MIS sales based  instead they have a handful of large private funders, supposedly including a sovereign wealth fund.
> 
> Now don't get me wrong here...i like Sandalwood, i like the "story" and the business makes sense to me...in general im a supporter but cant see myself as an investor..i don't mind a punt but everyone has to draw the line somewhere.




And that's a bit different to "waiting for this mob to fall over"!


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## So_Cynical (9 August 2012)

oldblue said:


> And that's a bit different to "waiting for this mob to fall over"!




Sure ok, it was a bit of a throw away line, still the glass half empty side of me is waiting for TFC to fall over like all the others did, and the glass half full side really wants to buy in at around this price level (40c) but hasn't got the guts.


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## RBgO (31 August 2012)

Numbers are out.

On the surface not too bad, but the dividend is scrapped and they plan to "explore all strategic options".

Usually that ends with the shareholders screwed and management and outside parties richer...

We'll see.


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## piggybank (26 November 2013)




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## So_Cynical (26 November 2013)

So_Cynical said:


> (9th-August-2012) the glass half full side really wants to *buy in at around this price level (40c)* but hasn't got the guts.






piggybank said:


> View attachment 55520




And there you go again, i should pay more attention to my "Glass half full" side.


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## piggybank (28 November 2013)




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## piggybank (2 January 2014)




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## Woodduck5 (3 January 2014)

piggybank said:


> View attachment 56107




....got to ask the question....What market sentiment is behind this going up (by so much).  It doesn't appear to be on any market announcements, or 'hard data'.   It just seems to be hopeful sentiment from a fickle market.
And the real question - Do we (I) take the profit and run or hold out and ride the wave to when the really big dollars should flow in 2016?  I understand risk remains (staying in).

Completely undecided....


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## piggybank (3 January 2014)

Woodduck5 said:


> ....got to ask the question....What market sentiment is behind this going up (by so much).  It doesn't appear to be on any market announcements, or 'hard data'. It just seems to be hopeful sentiment from a fickle market. And the real question - Do we (I) take the profit and run or hold out and ride the wave to when the really big dollars should flow in 2016?  I understand risk remains (staying in).
> 
> Completely undecided....




If only it was that easy to know when to pull the trigger. If it was the case then why are so many traders trying to find the "Holy Grail"? Most traders and investors have their own criteria - decided by many years of experimenting/perfecting a system that works for them. Every experienced investor/trader has made losses (and still do) but ensuring you keep the losses to a minimum (capital) then you are half way there.


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## pavilion103 (3 January 2014)

Got in at 99c a couple of days ago.
Stop to break-even now.
Will ride the momentum until the market tells me it's time to get out.


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## pavilion103 (6 January 2014)

Another good day so far up 5% again.


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## Woodduck5 (7 January 2014)

pavilion103 said:


> Another good day so far up 5% again.




..and all this activity, based on the only announcement made in the last month (the purchase in NT for near on $8m).  And a lot of activity it has been.  Wow - who would have thought......


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## Value Collector (13 January 2014)

So_Cynical said:


> Sure ok, it was a bit of a throw away line, still the glass half empty side of me is waiting for TFC to fall over like all the others did, and the glass half full side really wants to buy in at around this price level (40c) but hasn't got the guts.




Would have been a decent gain for you, they have been around $1.20 lately.

I bought in at 93cents, Based I my valuation the company owned 2400 hectares of trees is worth more than 93cents per share. So I basically bought the trees at full price and got the marketing company, the land, the seedling nursery, and the mt romance refinery for free.


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## pavilion103 (16 January 2014)

This one has recently consolidated a little bit over the last week it so. Up to $1.24 this morning. Will see if it breaks higher again from here or not. It's been a good one.


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## piggybank (16 January 2014)

You may find that it could pull back from here $1.25 (but unlikely), as this was a strong resistance level in 2008.


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## Valued (16 January 2014)

2008 is a bit too far for a resistance level to have any significance. The only reason there is resistance is because people want to sell at that level for a number of reasons, none of which would ordinarily survive five years. These points are based on supply and demand and psychology which all change in such a large space of time.


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## Value Collector (16 January 2014)

Yeah, a lot has changed with this company since 2008. This year the harvest program starts, they will be harvesting the trees planted in 1999, so from now on each year will have a harvest that gets increasingly bigger each year inline with the planting size increases since 1999.


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## Woodduck5 (17 January 2014)

piggybank said:


> ....., as this was a strong resistance level in 2008.




I agree with the others - the circumstances at the moment, are totally different to that of 5 years ago.  While I have an appreciation for charting, its philosophies and cycles - I am not sure the (those) rules apply to this type of company and what it has been through and what it is facing ahead.

Just gotta love the way is is currently trending and (in some cases) against the ASX200 trend.  How long can it last?  Too good to be true?  Time will tell.  I certainly don't have the answer....


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## piggybank (17 January 2014)

Hi Woodduck5, Value Collector & Valued.

*So how far back in time do you class a chart as being revelent? So am I right in saying that when the likes of Colin Nicholson, Daryl Guppy etc do charts over a 5-10 year range (usually a monthly one) then they don't know what they are talking about?*


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## Value Collector (17 January 2014)

Woodduck5 said:


> Just gotta love the way is is currently trending and (in some cases) against the ASX200 trend.  How long can it last?  Too good to be true?  Time will tell.  I certainly don't have the answer....




I got in at $0.93 because it was at a large discount to what I could see it was worth, as I said $0.93 just pays for the trees it owns, So all the other assets including the land is my safety margin. So its not surprising to me the strength has continued, But who knows where the market will go short term, But I am expecting the earning to steadily increase over the next few years, There may be a slight decrease this year because last had a big one off item, but normal earning should be increasing.



piggybank said:


> Hi Woodduck5, Value Collector & Valued.
> 
> *So how far back in time do you class a chart as being revelent? So am I right in saying that when the likes of Colin Nicholson, Daryl Guppy etc do charts over a 5-10 year range (usually a monthly one) then they don't know what they are talking about?*




Hi piggy,

I don't use charts as part of my valuation so I can't help you there, I look at charts sometimes out of interest, but it doesn't form part of my analysis. 

This short funny clip shows more so the kind of thing I do.


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## pavilion103 (17 January 2014)

piggybank said:


> Hi Woodduck5, Value Collector & Valued.  So how far back in time do you class a chart as being revelent? So am I right in saying that when the likes of Colin Nicholson, Daryl Guppy etc do charts over a 5-10 year range (usually a monthly one) then they don't know what they are talking about?




The more recent the resistance the more relevant.


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## Valued (17 January 2014)

Whether a resistance line is relevant is a difficult matter to determine. It depends on many things, such as whether those people have held or whether there was a panic sale, a selling climax, various tests into previous support areas etc. It's not something you just throw a time frame on and say ok it's 6 months or 9 months or one year etc. Five years would almost always be too long. IF anyone was holding for five years they likely arn't selling anyway, so there will be no resistance.

However, as Pav said, the more recent the more relevant and the less recent the less relevant, generally speaking. Of course, recent resistance lines might become irrelevant if, for example, there is a massive and aggressive shakeout resulting in a huge panic sell. This absorbs all the supply that would have been at a higher area, allowing the stock to pass through it with ease.


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## piggybank (27 February 2014)

*Nice jump today. It closed at $1.34 (up 14.5%) on volume of 2.75 million. Up 185% since 28/08/13*


​


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## piggybank (6 March 2014)

Dividend Yield: 2.00%
Market Cap: $397,841,945
Price Book Value: 1.76
PER: 7.28

​


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## pavilion103 (9 March 2014)

Was previously in this one at 99c and out 1.16. 

I just realised that it has since exploded. 

Anyone following this one with interest?


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## stuartedwards001 (22 March 2014)

I couldn't see any recent posts on TFC so I thought it worth updating. The share price has performed well this year following the commencement of trial harvests of original trees planted back in '98 and sale of oil at $4,500 per kilo, the dividends have been reinstated and their records show continuous improvement in tree survival rates and growth with more recent plantings, so earnings should accelerate in coming years and they are in a good position to continue expanding with about 30 % of the land unplanted. Although the price has gone from around 40c to $1.70 in the last year some analysts are suggesting they could go to $2.50 or thereabouts in the near to medium term. Also they have just been included in the Asx 300 for the first time (21 march 2014) so i am guessing that they will appear on the radar for some of the big institutional investors now?


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## Rinsewind (28 November 2014)

Peaked at $2.20.  Now $1.20.  Any ideas what's going on?  Everything I can find is +ve.  Director buys 750,000 =  $1M of shares early Nov.  Another Director buys 100,000 mid December, both around the $1.35 level.  DISCL Holding. Bought @1.90 in Sept 14.


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## oldblue (28 November 2014)

Could it be the negative vibes surrounding the financing of failed forestry companies such as Timbercorp? No direct  association but may be affecting sentiment towards other companies in the industry.


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## Value Collector (28 November 2014)

Rinsewind said:


> Peaked at $2.20.  Now $1.20.  Any ideas what's going on?  Everything I can find is +ve.  Director buys 750,000 =  $1M of shares early Nov.  Another Director buys 100,000 mid December, both around the $1.35 level.  DISCL Holding. Bought @1.90 in Sept 14.




No idea, probably just normal share market ups and down, I got in at 93cents sold most at $1.86, i still have about $8000 dollars worth I kept as a token holding, if it goes any lower I might buy some more. 

Its seems like a good business to me, the harvests in the next few years will not be huge, but there are larger ones on the way. I like the fact they are generating value in a few different ways, eg, there owned trees growing, leasing the land to other investor growers, earning a care taking fee, selling the seedlings to investor growers, financing, processing and selling the oil.


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## skc (28 November 2014)

Value Collector said:


> No idea, probably just normal share market ups and down, I got in at 93cents sold most at $1.86, i still have about $8000 dollars worth I kept as a token holding, if it goes any lower I might buy some more.
> 
> Its seems like a good business to me, the harvests in the next few years will not be huge, but there are larger ones on the way. I like the fact they are generating value in a few different ways, eg, there owned trees growing, leasing the land to other investor growers, earning a care taking fee, selling the seedlings to investor growers, financing, processing and selling the oil.




The issue with TFC has always been the huge discrepency between reported accounting earnings and oeprating cashflow.

For the last 3 years, reported earnings were $25.9m, $55.7m and $82.5m... and it looks fantastic.
Actual operating cashflow, however, were -$60.5m, $21.8m and $7.2m.

They made up a term called "Cash EBITDA" of $51.8m for FY13, but I can't work out how it came about. On a presentation dated 22/10/2013, page 10 showed 'cash' revenue of $119.8 while operating expenses of only $65.7m. However, the actual reported operating expense was $135m. So I have no idea exactly what they do or do not include in calculating "Cash EBITDA". And when the term 'cash' is sitting in quotation, you know it's not real cash either.

So it's important to recognise that most of the profits are simply accounting entries, and they barely make any cash at the moment, let alone free cash flow. Now over time, when the trees grow and get harvested and sold, the accounting profits may turn into real cash flows... but there are plenty of uncertainties between now and then. Every so often, these uncertainties crop up (be they real or perceived) and the share price will fluctuate as a result. It's not something I know how to value with any precision.

And they had Adam Gilchrist on the Board at one stage... I wonder why?!


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## Value Collector (29 November 2014)

skc said:


> The issue with TFC has always been the huge discrepency between reported accounting earnings and oeprating cashflow.
> 
> For the last 3 years, reported earnings were $25.9m, $55.7m and $82.5m... and it looks fantastic.
> Actual operating cashflow, however, were -$60.5m, $21.8m and $7.2m.
> ...




Adam Gilchrist was a shareholder and was one of the larger owners of planted hectares, he is also a well known celebrity in India, a large market of the products.

Obviously when your main business is farming trees that take 15 years to mature, a lot of the value your generating in not going to be in the form of free cash flow. As the crops mature they have to report the value of the crop along the way, and each step is worth more than the state it was in 12 months prior.

Eg, a hectare of 12month old trees, is worth more than the unplanted seedlings from a year ago, and a hectare of 36month old trees, is worth more than a hectare of 12 month old trees etc etc.

Any agricultural product that takes more than 12 months to mature is reported in this way, Tassal reports its fish stocks the same way, because it takes 3 years for a salmon to go from an egg to a fully grown salmon, but obviously the value of a few trays of salmon eggs in a hatchery, is a lot less than a sea pen full of mature salmon ready for harvest, so it makes sense to report the growth in the stock over that 3 year period. It's a perfectly sound method of accounting. TFC is the same, except instead of a 3yr egg to mature fish cycle, its a 15year seedling to mature tree cycle. They only harvested their first trees this year, but now have 15 year classes at various stages of maturity behind it, as they have built this up over the last 15 years, thats real value being generated, its not cash flow, but it is still very real.


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## So_Cynical (29 November 2014)

oldblue said:


> Could it be the negative vibes surrounding the financing of failed forestry companies such as Timbercorp? No direct  association but may be affecting sentiment towards other companies in the industry.




Blue that's 2/3 years ago, water under the bridge, what happening here is something else...the inevitable.?

---

Don't get me wrong, trees are and can be be a good business but there should never ever be a reason to wank the numbers.


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## oldblue (29 November 2014)

So_Cynical said:


> Blue that's 2/3 years ago, water under the bridge, what happening here is something else...the inevitable.?
> 
> ---
> 
> Don't get me wrong, trees are and can be be a good business but there should never ever be a reason to wank the numbers.




Not entirely. The failures happened 2/3 years ago but the repercussions are still being felt - and currently in the news - with actions being taken against some of the financiers of the aggrieved investors. Stirring old memories, re-igniting new concerns? The old greed and fear thing.


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## KJS (28 January 2015)

Would interested to understand the latest sediment on this stock?


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## skc (22 March 2017)

A short seller's report on TFC, calling it a ponzi-scheme.

https://glaucusresearch.com/

I haven't read thru the report but it could be anything from scaremongering to the next Sino-Forest.


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## peter2 (23 March 2017)

TFC now trading as QIN.


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## skc (23 March 2017)

TFC/QIN put up a response to an ASX speeding ticket today. The defense is crappy to say the least.

QIN said the research note is full of errors and inaccuracies... how about some evidences to dispute them? How about some evidence on key accusations like end product price, credibility of distribution partners, yields in the trees etc etc. The only other defense is that TFS's plantations are owned by large respected institutional investors... sure, but so was Bernie Madoff's funds, or Valeant, or Sino-Forest. Doesn't prove anything, does it?

The company had an opportunity to put things straight, and they didn't step up to the plate. Lucky for them there are no borrow stock available, or their stock could have fallen much more than 13%. 

Lots of trees are due to be harvested and sold in the next few periods. No doubt any remaining investors will be hoping QIN can "Show me the MONEY!!!!".


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## kid hustlr (23 March 2017)

skc said:


> TFC/QIN put up a response to an ASX speeding ticket today. The defense is crappy to say the least.
> 
> QIN said the research note is full of errors and inaccuracies... how about some evidences to dispute them? How about some evidence on key accusations like end product price, credibility of distribution partners, yields in the trees etc etc. The only other defense is that TFS's plantations are owned by large respected institutional investors... sure, but so was Bernie Madoff's funds, or Valeant, or Sino-Forest. Doesn't prove anything, does it?
> 
> ...




Feels like a classic case of people thinking money grows on trees.


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## System (28 March 2017)

On March 23rd, 2017, TFS Corporation Limited (TFC) changed its name and ASX code to
Quintis Limited (QIN).


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## skc (28 March 2017)

The plot thickens...

QIN issued a response that wasn't half bad, although it did falg some new issues with its Chinese customers. Then this morning, MD and major shareholder resigned to possibly launch a bid with a 3rd party.

That kind of smells and it's not the scent of sandlewood that I am smelling...


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## craft (28 March 2017)

skc said:


> The plot thickens...
> 
> QIN issued a response that wasn't half bad, although it did falg some new issues with its Chinese customers. Then this morning, MD and major shareholder resigned to possibly launch a bid with a 3rd party.
> 
> That kind of smells and it's not the scent of sandlewood that I am smelling...






> "The US-based global investment management firm referred in the Company’s Beyond Carbon announcement of 28 June 2016 is *GMO LLC*."







> "At no time has Glaucus contacted Quintis; nor has Glaucus visited Quintis’s plantations.
> 
> Quintis notes that:
> i. Quintis abides by Australian laws, including the compliance and governance requirements of the Corporations Act, and prepares financial statements that comply with Australian Accounting Standards. Quintis's adherence to these rules is audited by EY and monitored by ASIC and ASX.
> ...




Who do you think may have done the best due diligence here? Jeremy Grantham's 77 Billion FUM investment business which invested directly into Indian sandalwood plantations or Glaucus (FUM???).  Obviously some big money now thinks that QIN as the management company is cheap enough to make a move on from their understanding of the situation and Frank Wilson seems happy to help - don't think he's ever really been happy with it as a listed company.

With this being in a trading halt prior to the real fight back, I suspect Glaucus will be crapping their shorts. Gap Risk!!! Fun to watch.

Of course Glaucus will probably spin Wilson leaving as rat from a sinking ship to save their shorts but it will be to no avail if an indicative offer from a credible buyer materialises before the trading halt lifts.

Two stories one will be profitable.


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## skc (28 March 2017)

craft said:


> Who do you think may have done the best due diligence here? Jeremy Grantham's 77 Billion FUM investment business which invested directly into Indian sandalwood plantations or Glaucus (FUM???).




I don't know. Who's done more due diligence on Valeant? Bill Ackmen or John Hempton?



craft said:


> Obviously some big money now thinks that QIN as the management company is cheap enough to make a move on from their understanding of the situation and Frank Wilson seems happy to help - don't think he's ever really been happy with it as a listed company.
> 
> With this being in a trading halt prior to the real fight back, I suspect Glaucus will be crapping their shorts. Gap Risk!!! Fun to watch.




QIN resumes at ~$1.20-$1.25 which is still down from ~$1.40 before the report was published. So market is not too convinced that a takeover offer was obvious yet.

If I was a lazy short (e.g. just going along for a ride after superficial research) I would certainly cover on the back of this... one should still be in profit and it's probably not worth the risk of a takeover being potentially real. But if I am doing strategic shorts after thorough research, then I'd probably hold. I don't know which camp Glaucus is in (probably the former).

QIN being a fraud and someone taking it over are not mutually exclusive events (Quindell's shareholders are still can't believe their luck 2 years after SGH showed up with a billion dollar), however.

Personally I hope the takeover doesn't happen, just so that we get to read the last chapter of the story...It's not quite JK-Rowling-getting-hit-by-a-bus-before-releasing-the-last-Harry-Porter-book disappointing, but being taken private may mean the ending won't be revealed...

Disclosure - I have no position.


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## craft (28 March 2017)

skc said:


> I don't know. Who's done more due diligence on Valeant? Bill Ackmen or John Hempton?
> 
> 
> 
> ...




I picked some TFS up once for a bit of a feel but put it back down because I couldn’t get my head around the impact of their volume on future price and whether or not they would have enough market share / demand to set price.

(The time frame for more clarity on these issues has not passed so I have never looked again until your post alerted me to the goings on.)

Normal agriculture risk is also obviously at play on yield and survival.

However I never got the feeling of it being a fraudulent business. High risk/reward with quite a time frame before becoming financially self-funding which made it high risk in regards to ongoing risk of access to funding when I looked at it.

Like I say one of the two stories will be profitable – speculating on stories is not my game though, but if it was I would be going long here – I suspect Wilson has a real desire to see the company go private and forget about speculators. Being listed on the ASX does not really contribute to how it accesses funding, growers or customers so why bother?. I don't believe it to be a fraud - definitely contains business risks that could fail but not a fraud.  It would be sad to not see the end of the story though.

ps

No idea about Valeant – I thought that was an old car.


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## skc (28 March 2017)

craft said:


> Like I say one of the two stories will be profitable – speculating on stories is not my game though, but if it was I would be going long here – I suspect Wilson has a real desire to see the company go private and I don't believe it to be a fraud - definitely contains business risks that could fail but not a fraud.  It would be sad to not see the end of the story though.




Agree there isn't solid evidence of fraud... but a tree growing business with an opaque end market, one can't _craft _a better vessel for a fraud if one tried.

My guess is that the rewards/risks are better for buying this stock later... but a takeover would certainly devoid that opportunity.



craft said:


> No idea about Valeant – I thought that was an old car.




Plenty of other articles thru the years but this is the final chapter. *Warning "contain spoilers".



Spoiler



http://www.afr.com/markets/aussie-john-hempton-beat-wall-street-royalty-on-valeant-20170314-guy6g8


*


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## Miner (2 April 2017)

Just my thought on saQndalwood. 
How many of us have used sandalwood in recent year ?
How many of us have actually smelled the Australian sandalwood grown in Australia, Indian sandalwood grown in Australia and Indian sandalwood as grows in India.
If you have smelt and know the market of sandalwood, then ask who are the users of sandalwood as wood and as oil/essence ?
Affordability of having real sandalwood oil vs simple chemically improvised oil smells like sandalwood.
After these, please look into the claims made by Q Sandal company and see the future.
I have tested all of them and regular user of sandalwood as wood at home. I know the difference and will think few times on my options before putting money on Q Sandal.


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## skc (2 April 2017)

Miner said:


> Just my thought on saQndalwood.
> How many of us have used sandalwood in recent year ?
> How many of us have actually smelled the Australian sandalwood grown in Australia, Indian sandalwood grown in Australia and Indian sandalwood as grows in India.
> If you have smelt and know the market of sandalwood, then ask who are the users of sandalwood as wood and as oil/essence ?
> ...




Can you elaborate? Are you saying QIN's version of the sandalwood market is truthful or unbelievable?

Personally I can't really agree why a bottle of Grange should sell for 200x that of a bottle of whatever $10 wine, or why a LV bag is priced at 100x another totally functional bag. The answer isn't something you can logically deduct/imply from your own personal experience/opinion. Now I can easily see that there are indeed demands for Grange and LV bags at those price points... and the truth for the market of US$4500/kg oil is out there, I just don't know the answer myself.


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## So_Cynical (5 April 2017)

skc said:


> Lots of trees are due to be harvested and sold in the next few periods. No doubt any remaining investors will be hoping QIN can "Show me the MONEY!!!!".




Last year they bought out many of the early wood lot investors, it seemed a little strange at the time, spending money on paying out investors.



skc said:


> and the truth for the market of US$4500/kg oil is out there, I just don't know the answer myself.




The potential for niche/high end forestry is phenomenal, next to no one is growing high value timber on a commercial scale, natural wild timber of many high end species is pretty much impossible to obtain legally, totally impossible in quantity.


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## skc (5 April 2017)

So_Cynical said:


> Last year they bought out many of the early wood lot investors, it seemed a little strange at the time, spending money on paying out investors.




Yes that's what the short seller's report has been pointing at being the telltale sign of a ponzi scheme. On the other hand, there are possible legitimate reasons for QIN buying it's own wood at a higher price. They are vertically integrated with a location advantage (lower transport and handling costs) so if they have an end market demand for the oil, they are best positioned to capture the margins from that part of the value chain.

On very rough calculations, they paid ~$100/kg of wood(2014), and they stated that oil yield is ~3.7%. So each kg of wood yields 0.037kg of oil, worth ~$166 (using $4,500/kg for oil). So on paper it stacks up to sell the oil rather than to sell the wood.


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## So_Cynical (6 April 2017)

skc said:


> On very rough calculations, they paid ~$100/kg of wood(2014), and they stated that oil yield is ~3.7%. So each kg of wood yields 0.037kg of oil, worth ~$166 (using $4,500/kg for oil). So on paper it stacks up to sell the oil rather than to sell the wood.




I will have to do some reading, anyway looking at the whole tree the heart wood would make up about 30-40% of the whole harvest tree dry weight, i imagine they would sell that as timber and just chip, crush
and then use solvent extraction on the remainder, from memory the heart wood has the highest oil content.

Whats not in doubt is the fact that mature Sandalwood trees are very valuable, plantation trees perhaps even more as there are no issues around ethics and sustainability...might take a little punt on this one, a half a position.


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## Miner (6 April 2017)

skc said:


> Can you elaborate? Are you saying QIN's version of the sandalwood market is truthful or unbelievable?
> 
> Personally I can't really agree why a bottle of Grange should sell for 200x that of a bottle of whatever $10 wine, or why a LV bag is priced at 100x another totally functional bag. The answer isn't something you can logically deduct/imply from your own personal experience/opinion. Now I can easily see that there are indeed demands for Grange and LV bags at those price points... and the truth for the market of US$4500/kg oil is out there, I just don't know the answer myself.



Hi SKC
I was not subscribed to this thread so did not have a chance to read your query earlier. Sorry as you were not neglected.
OK coming back  your question:
I did not say or mean that QIN version of sandalwood was unbelievable or untruthful.
Sandalwood, as grown in India, has a different climate than QIN is growing here. They could be same product but fragrance has a lot to do with the climatic condition. 
For example, I have found plenty of Cinamon in Madagascar while working there. They were cheap and good quality. But the smell and taste of the same Cinamon you get in India are much different and taste better.
It does not mean they were fake. 
As you referred to Grange bottle. That is why grapes grown in some climate are better than other climate and hence the wine quality.


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## So_Cynical (6 April 2017)

Miner said:


> Hi SKC
> I did not say or mean that QIN version of sandalwood was unbelievable or untruthful.
> Sandalwood, as grown in India, has a different climate than QIN is growing here. They could be same product but fragrance has a lot to do with the climatic condition.




QIN grows Sandalwood in the Kimberly region of far north WA, dry winter with monsoonal wet summer, very similar to northern India i would think.

Ok so doing some reading -_ (Indian Sandalwood - Santalum Album) _is native to southern India, grows often at altitude and although monsoonal grows in very high rainfall areas, so similar if one considers that altitude is not that important.

Anyway the QIN trees are cloned i think so genetically identical, according to wiki QIN will be the largest supplier in the world by 2018.

https://en.wikipedia.org/wiki/Sandalwood


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## galumay (7 April 2017)

So_Cynical said:


> ...so similar if one considers that altitude is not that important.




I have no knowledge of WA sandalwood compared to Indian, but the assupmtion altitude is not that important could be misleading. ALtitude means temps will be a lot lower and if you consider a crop like coffee, altitude has a very significant effect on flavour profile. Another possible important difference would be soil type - as we know from wine, that too can be critical to flavour profile. 

I realise both of those comparisons are considering taste, but its also possible aromatics are effected too.


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## skc (7 April 2017)

galumay said:


> I have no knowledge of WA sandalwood compared to Indian, but the assupmtion altitude is not that important could be misleading. ALtitude means temps will be a lot lower and if you consider a crop like coffee, altitude has a very significant effect on flavour profile. Another possible important difference would be soil type - as we know from wine, that too can be critical to flavour profile.
> 
> I realise both of those comparisons are considering taste, but its also possible aromatics are effected too.




None of these really matters... the 2 key questions are simply:
- Are there nearly as much biological assets as QIN claims?
- Are the prices achievable and at what volume?

Numbers a bit hard to come by but I think they have sold at most ~$5m of the top shelf album oil. That's no more than 1500kg. That's ~ 40 tonnes of sandlewood heartwood worth of oil. What's the market like when you try to sell 20-50x that amount?


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## galumay (7 April 2017)

skc said:


> None of these really matters.




Ok, if you say so! It was you that raised the question of altitude!!

I suspect that the questions are all entertwined, whether or not the locally grown trees produce an oil of the same quality will be a part of the equation in considering what the potential market is for locally produced oil. 

Without looking any deeper I agree that there is a fair bit of 'potential' in their numbers and increasing sales by 20-50x is a big ask - even if the oli is of the same quality.


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## InsvestoBoy (7 April 2017)

_*Santalum spicatum*, _is the Australian native sandalwood that grows and evolved natively in WA as a symbiote to Acacia acuminata (Jam Wattle) and a couple of other genus and species.

Lots of mining companies plant Acacia acuminata to meet their land rehabilitation requirements, with plans to use it as host for native sandalwood plants in the future. It is a lucrative crop.

Australian native sandalwood, despite the difference in climate and growing conditions for Indian sandalwood, still produces a high quality, high yield product, some of the best in the world. The quality of the end product is also very high compared to a lot of junk that leaves India and other developing countries trying to cash in on global markets. The phytochemical profile is different, but not hugely so.

No interest in QIN or any other plantation stocks, I know this basically only because I'm interested in some Australian native plants as a hobby and grew Acacia acuminata trees in the past.


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## skc (7 April 2017)

galumay said:


> Ok, if you say so! It was you that raised the question of altitude!!




No. I never did. I think miner mentioned it first and So_C took responded.


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## galumay (8 April 2017)

skc said:


> No. I never did.




Well I thought it was you, and thats all that matters!!
(early onset alzheimers is worse on Fridays I find.)


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## skc (10 May 2017)

Ooops... we lost our only credible customer and forgot to tell the market for 5 months. Nice one QIN. Way to earn credibility.

Improved communications will solve all the problems.


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## Boggo (10 May 2017)

skc said:


> Ooops... we lost our only credible customer and forgot to tell the market for 5 months. Nice one QIN. Way to earn credibility.
> 
> Improved communications will solve all the problems.




Seems that not everyone was in the dark and got the ball rolling back in Jan and Feb.


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## So_Cynical (10 May 2017)

43% one day fall, the shorters win again...substantial punishment for today's communication ann.


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## skc (10 May 2017)

skc said:


> Improved communications will solve all the problems.




Just in case it wasn't perfectly clear... this was meant to be sarcastic.



So_Cynical said:


> 43% one day fall, the shorters win again...substantial punishment for today's communication ann.




QIN's most credible client has terminated a contract 6 months ago, and actually hasn't placed an order in 2016. The company knows that it hasn't placed an order because there is no sales to Galderma in the forecast.

So somehow the Board doesn't know the contract has been lost, and didn't care that no sales has come through the door for 18 months. 

They are either lying through their teeth or they are totally incompetent. Probably both. If this isn't a class action prime candidate there should be no class action lawyers (and no director liability insurance industry). 

It never ceases to amaze me how little some Boards actually know what the company is actually doing.


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## pixel (15 May 2017)

Trading Halt at last...
... and I can sense a Class Action coming up. Surely, some Lawyers will smell an easy profit...


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## skc (15 May 2017)

pixel said:


> Trading Halt at last...
> ... and I can sense a Class Action coming up. Surely, some Lawyers will smell an easy profit...




The way this is going, any class action will have be settled in trees.

Here's a new damaging report from another short selling research group.
https://viceroyresearch.wordpress.c...rporation-limited-money-doesnt-grow-on-trees/

The new report alleges some circular dodgy deals between QIN and Frank Wilson which both boosted sales and allowed Frank to skim millions of dollars from the company. 

I think QIN is toasted, barring a minor miracle. No one would in their right mind put up fresh capital (in equity or debt) to keep up with the cash burn. The trees are not of zero value... but we will soon see how big the end market truely is when the wood is sold by the liquidator in actual arms length commercial transactions.


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## pixel (15 May 2017)

If those dodgy dealings have indeed happened, Frank Wilson and the directors that allowed it to happen ought to breathe filtered air - filtered through iron bars, that is.


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## skc (6 June 2017)

4 announcements in one day. Extend suspension, trading update, response to ASX query, new CEO employment.

And within these announcements, the company has basically said our sales have mostly vaporised, our cash is dwindling, we may soon default on our debt, and a change of control transaction was never meant to be a takeover, but a recapitalisation / potential debt for equity deal to our lenders.

Take your hat to the shorters... they certainly knew and cared more than the directors.


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## So_Cynical (7 June 2017)

So_Cynical said:


> (Aug 7 ~ 2012) I'm still here....waiting for this mob to fall over.




Took a few years but i said it first...


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## glowingsack (9 June 2017)

:-( not much else to add...

apart from it seemed good for a while. This stock has given me a wealth of experience in trading and my controlling my emotions. Nothing like a nice loss to galvanise you .


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## galumay (22 January 2018)

Looks like another nail in the coffin for QIN.

http://www.abc.net.au/news/2018-01-21/sandalwood-company-quintis-appoints-administrators/9347190


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