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Bushman

Bushman

Joined
6 June 2007
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Guys;

Noticed there was no CII thread so thought I would quickly start one to get some discussion going.

Overview: there is increasing talk of an agricultural 'super cycle' starting being driven by population growth, a change to Western diets, bio fuels demand etc. As we all know, modern agricultural technology needs fertiliser to drive optimum crop yields. Blah, blah.

CII - CI Resources is an ASX listed company with investments in phosphate and fertilizer. Specifically, CII holds the following interests -
- 38% stake in Phosphate Resources, a phosphate producer that carries out a 700k tpa phosphate operation on Christmas Island. As per 1/5 ann, PR has taken a stake in 3 Chinese phosphate mines in Guizhoi Provence (expected to increase to 300k tpa within 18 mths).
- 51% stake in XiFeng, a Singapore company holding a 32% stake in a fertilizer plant in Guizhou Provence, China.

Financials - CII:
- Profit year-ended Dec 2007 $1.38m.
- Net cash $5m
- Net assets $13.7m being cash plus $8.9m stake in Phopshate Resources and XiFeng.

I think the current shares in issue is 62.880m which gives a current NTA per share (based on Dec'07 accounts) of 8.6 cps. Thus the current share price of $0.55 cps is trading at quite a premium to NTA. Current profit of $1.38m vs market cap of $34.58m gives a cap rate of 4% too. Note that these numbers do not include the recent acquisitions.

So as you can see, it is a bit harder to come up with a val for this at the moment until the economics of the recent acquisition is explained.

What we know is -
1. It is cashflow positive;
2. It has increased its phosphate production to 38% of 1m tpa capacity;
3. It has cash to fund further purchases etc.

Anyway it is an interesting prospect given the action in agri plays in the market. Whether $0.55 represents fair value - not sure? Rushing to complete this so will have another look on the weekend.
 
Thanks Bushman for the CII thread.

I have been buying CII mainly for 3 reasons;

- They are a Phosphate Producer.
- They are actively looking for further Phosphate opportunties.
- They have a 38% interest in Phosphate Resources who produce 700,000tpa. Last half they had revenue of $37M, resulting in a nett profit of $2.9M.


My rough workings for this year are:


700,000t P2O5 * $350t = $245,000,000
Costs $36M*2*15% = $ 83,,000,000

Gross $162,000,000
Tax @ 40% $ 72,000,000

NETT $ 90,000,000 *38% = $34,000,000 for CII

Now with 73M shares that equates to 46.5 eps.

Please note this is very rough and I would be happy to have input as I keep shaking my head thinking I have done something wrong.:eek: I also allowed an extra 15% in the costs over last years.

I have emailed the company to try and find out if sales are at a contracted price or spot, but I have not had a reply yet.

Also the mine life is 5-7 years and it looks like this will not be extended, but they are appealing it.

It is tightly held with the top 20 holding 84% at Dec 2007.

I am interested to hear other comments as this ones seems to have fallen under the radar to some extent.:D
 
All very quiet on this company? Was hoping that I might have got some feedback on my figures as I keep thinking I am missing something.:confused:

Notice that the price has firmed up over the last couple of days from the low 50s into the 60s. The AGM is on the 30th of May, so maybe there will be some more news.

I am amazed how little attention CII gets considering it is a producer and is actively looking to futher its interests in the Fert industry.

Any comments?:D
 
crisstoff said:
All very quiet on this company? Was hoping that I might have got some feedback on my figures as I keep thinking I am missing something.:confused:

Notice that the price has firmed up over the last couple of days from the low 50s into the 60s. The AGM is on the 30th of May, so maybe there will be some more news.

I am amazed how little attention CII gets considering it is a producer and is actively looking to futher its interests in the Fert industry.

Any comments?:D
Click to expand...

Hm thats a very short mine life 5-7 years!

thx

MS

Business Description
CI Resources Limited (CII, formerly Asset Backed Holding Ltd) is involved in investments, with an interest in Phosphate Resources. This is currently the only major investment, following a decision to narrow the focus of the company.
 
They have applications in for a more land on Christmas Island, this is not straight forward as there are pending Appeals.

They have recently announced an acquistion in China through Phosphate resources, who after approvals will own 51%. This mine produces 120,000t pa of phosphate and it is planned to increae to 300,000tpa within 18 months.

http://www.asx.com.au/asxpdf/20080501/pdf/318xgjqzslp8kt.pdf

Still looks cheap IMO. I do not think the food crisis is over and we may see further increases in the price of phosphate yet. ;)
 
yeh ive had my eye on them and trying to keep up with all their announcements for about a month anow nd they have been pretty steady. Interesting to see how they will go with any aquisitions considering phosphate prices keep on rising
 
Good comment today from Phosphate Resources, which CII own 38% of -

"The Board also advises that it anticipates a substantial profitability improvement over the
next year notwithstanding continuing market volatility in pricing, exchange rates and fuel
costs and some alteration in the grade of phosphate ores available"



Also note that Wise Owl recomended CII with a target price of 82.
 
I kept trying to buy into this today but than something distracted me and the price has just rocketed.

Everyone loves this stock and it is very tightly held.

should do well over the next year.
 
Can you believe it - now $1.13 aftre another 17% increase today. When I wrote this 6 weeks ago it was $0.55!

Did not give anyone much chance to get set did it. Only problem for me is that I did not buy any at 55 cps. Bugger.

Will need some more research to see what is driving this. It looks like it is being accumulated.

So it goes. Phosphate is hot.
 
Still it is being accumulated. $1.46 - up 8% on a dark day for a dark year for equities.

I guess the phosphate mines are in China so it will make it cheap regarding transportation.

Trying to get a grip on the increase from ann is harder but the bit of info is in the ASX price query a few weeks back. There CII state that Phosphate Resources, of which CII have a 39% stake in, have a current Net Asset Backing of $7.26 per share. Now I know that CII have no debt on its books. So CII hold 1.327m shares in PR @ 7.26 * 39% = NAB of $4m. This compares to current mkt cap of 72m shares at 1.46 = $105m. There is some serious upside in the phosphate profit being factored in.
 
I have been following this stock for sometime as well, up over 400% since February and another 11% today!! Not too much interest on this forum though, suprising when all the rage is minemakers

This might be old news but as announced "the consolidated unaudited net asset figure as of 30th April 2008 was $24,887,000 which equates to a net asset backing of $7.26 for each ordinary share"

A fully franked dividend of 30 cents was also paid recently for all issued ordinary shares.

Does anyone have any insight as to where they might be heading, would they be looking to other phosaphate assets?
 
Green Machine said:
I have been following this stock for sometime as well, up over 400% since February and another 11% today!! Not too much interest on this forum though, suprising when all the rage is minemakers

This might be old news but as announced "the consolidated unaudited net asset figure as of 30th April 2008 was $24,887,000 which equates to a net asset backing of $7.26 for each ordinary share"

A fully franked dividend of 30 cents was also paid recently for all issued ordinary shares.

Does anyone have any insight as to where they might be heading, would they be looking to other phosaphate assets?
Click to expand...

like you bushman, i picked this up around the 40c mark and have watched it go and go. I hate myself for being a uni student right now :( but still thinking of jumping on board. Seems that Phosphate looks the 'it' resource atm (as well as iron ore). Also looking into agribusiness but dont know where to look

Green Machine, just to clarify (im still learning) that the $7.26 figure is a representation of CII's potential?
 
I'm unsure, I don't know exactly what this asset figure represents, need to do some more research myself. Would like to know if they could be easily sold off. Bushman are you able to help?
 
Green Machine said:
I'm unsure, I don't know exactly what this asset figure represents, need to do some more research myself. Would like to know if they could be easily sold off. Bushman are you able to help?
Click to expand...

Hey guys;

The $7.26 is the NAB (or net asset backing) per share of Phosphate Resources, an entity that CII holds 39% in. Refer to the following ASX announcement whereby the company tries to clear up the confusion re the $7.26 figure.

http://www.asx.com.au/asxpdf/20080619/pdf/319q6fjjm326gn.pdf

Note that you cannot simply take 39% of the '$7.26' to get back to what CII's share is worth on an NAB per share basis as Phosphate resources has less than 10m shares on issue (I forget the exact number -see my earlier post).

IMO the re-rating that is occuring is due to the acquisition of the Chinese phosphate mines and the future kicker this will have in CII's earnings. Bit hard to tell at the moment given what is known.

Up another 13% today to $1.52. Just another day at the office for good old CII.
 
Bushman said:
Hey guys;

The $7.26 is the NAB (or net asset backing) per share of Phosphate Resources, an entity that CII holds 39% in. Refer to the following ASX announcement whereby the company tries to clear up the confusion re the $7.26 figure.

http://www.asx.com.au/asxpdf/20080619/pdf/319q6fjjm326gn.pdf

Note that you cannot simply take 39% of the '$7.26' to get back to what CII's share is worth on an NAB per share basis as Phosphate resources has less than 10m shares on issue (I forget the exact number -see my earlier post).

IMO the re-rating that is occuring is due to the acquisition of the Chinese phosphate mines and the future kicker this will have in CII's earnings. Bit hard to tell at the moment given what is known.

Up another 13% today to $1.52. Just another day at the office for good old CII.
Click to expand...

Hi thansk for that info, its quite interesting. This one has fallen below the radar until not that long ago, but I wonder how much is worth

Has any broker doen any recommendation or research on it?

CII, IPL, RWD, MAK, NUF, ADY, STB, GCR

CII.jpg


thx

MS
 
2 July 2008
Phosphate Resources Ltd

The Board advises that with effect from the 15th July 2008 it has negotiated significant CNF price increases with its major customers in the range of 85 % to 95% above current CNF prices.
Click to expand...


I might have this wrong but CNF means cost & freight.Therefore the seller pays for the cost & freight to the port of destination.
The wording, negotiated significant, makes it look like an 85 % - 95 % increase is a good deal.
 
Been waiting and waiting for this one to retrace to 50/60 cps but it is sticking around the 90 cps support level.

Nice announcement about Christmas Island today. Mine is already producing so if they can ramp up phosphate production, that is further blue sky.

Still a long-term bull about agriculture. More people, arable land stays the same, so per capita it decreases every year. Fertilizer increases yield. As they say, a no brainer.
 
qldfrog said:
Any understanding vs 25pc loss yesterday.this is not a penny stock so unexpected
Click to expand...
Not a penny stock, but is very gappy

21/1 -19%
27/1 + 8%
3/2 +18.2%
5/2 +15.4%

15/2 - 25.2%

What sort of liquidity filter are you using?
 
Trav. said:
Not a penny stock, but is very gappy

21/1 -19%
27/1 + 8%
3/2 +18.2%
5/2 +15.4%

15/2 - 25.2%

What sort of liquidity filter are you using?
Click to expand...
thanks Trav, the sort which is not good enough obviously :) , I will have to confirm on each of the systems which bought CII, one is my oldie so may have nothing, usually a kind of volume X close price >$xxx
 
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