QIN - Quintis Limited

[Value Collector]

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.

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.

 

[pavilion103]

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.

 

[Valued]

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.

 

[piggybank]

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]

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

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[pavilion103]

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?

 

[stuartedwards001]

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?

 

[Rinsewind]

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.

 

[oldblue]

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.

 

[Value Collector]

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.

 

[skc]

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?!

 

[Value Collector]

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?!

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.

 

[So_Cynical]

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.?

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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.

 

[oldblue]

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

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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.

 

[KJS]

Would interested to understand the latest sediment on this stock?

 

[skc]

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.

 

[peter2]

TFC now trading as QIN.

 

[skc]

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!!!!".

 

[kid hustlr]

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!!!!".

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

 

[System]

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