Each night, when I go to bed, I die. And the next morning, when I wake up, I am reborn."
- Mahatma Gandhi
Quote of the Day.
Company Update : Noble Group Develops Ethanol Plants in USA
Noble Group (NOBL: SGX), a global supply chain manager of agricultural, industrial and energy products, has announced that the first ethanol plant under construction by MABE, a Nebraska based holding company specializes in the development of ethanol plants. The 44 million gallon plant located in Madrid, Nebraska is expected to reach mechanical completion by December 2006. Senior lenders to the Madrid plant are lead by Societe Generale, for whom this project represents the first ethanol transaction in the USA.
Noble, a shareholder of MABE, is the assigned marketer of all ethanol output produced by the Madrid plant as well as any new projects including the development of a new ethanol plant to be based in Cambridge, Nebraska. Noble's investment in MABE is US$6.5 million “We have been building this business for several years and are well placed to capitalize on the emergence of alternative energies such as ethanol which has been positively affected by the passing of the US Government Energy Bill last year and the transformation of agricultural products such as corn, wheat, barley and sugar to fuel,” says Fabrizio Zichichi, Noble’s US based Executive Vice President of Clean Oil Products.
In concert with its CBOT market maker status for the ethanol futures contract, Noble is integrating a global ethanol expansion - sourcing and merchandising in the World markets including Brazil and China.
As early as January 2007 Noble will be distributing in the US ethanol market, volumes in excess of 200 million gallons per year. The Group has over one billion gallons in off-take agreements signed for plants under development and is actively seeking to finalize additional contracts.
This transaction is not material for the purposes of the Singapore Exchange Securities Trading Limited Listing Rules.
Announcement excerpted from:
http://info.sgx.com/webcorannc.nsf
/e876e9cf6461aa6b48256fc800090876/
e7c52e405c03ebf44825713a000355a3?OpenDocument
Is Canon Fully Developed? - By Nathan Parmelee
With earnings season still a few weeks away, and most companies relatively quiet on the news front, it's a good time to check up on existing holdings and make sure that competitive positions and valuation still make sense. Up for review in my portfolio today is Canon (NYSE: CAJ).
Canon, which is well-known for all things imaging, continually innovates with new products and manages its financial health quite well. However, the stock has been sitting at its highs lately, and today it's hitting another 52-week high. That doesn't make it automatically overvalued, but when I originally purchased the shares, I had valued the company around the current price of $66 per share.
Competitively, I like how the company is positioned in its printer, copying, and digital camera businesses. I also believe that Canon will continue to gradually improve its bubblejet printing offerings and gain share. However, these are all very competitive industries, and rivals Hewlett-Packard (NYSE: HPQ), Sony (NYSE: SNE), and Lexmark (NYSE: LXK) are working toward improving their offerings as well. Given the rapid change of technology, it's always possible that Canon could be leapfrogged.
The largest concern is one of valuation. Over the past five years, Canon has generated 224.6 billion yen ($1.9 billion) in average annual free cash flow. In comparison, the company generated 384 billion yen ($3.3 billion) in net income last year, and wants to generate 550 billion yen in net income within five years, which is 7.4% compound annual growth. That level of growth is not too shabby, but assuming free cash flow grows at a similar 7.4% rate for the next five years, and using a discount rate of 10%, I see a company that is fairly valued to slightly overvalued right now.
It's not all that simple. From 2002 to 2004, the company generated more in free cash flow each year than in 2005, and 2001 is abnormally low -- only 98 billion yen ($845 million) in free cash flow. Throwing out the 2001 data, and using the average rate of free cash flow for the last four years -- 256.3 billion yen ($2.2 billion) -- shows that the company may still be slightly undervalued. This level is probably more appropriate, but I believe that Canon will see higher-than-normal capital expenditures for the next few years as it moves to further automate its manufacturing. Automation is a smart move for the long term, given the demographic shift that is occurring in Japan's population, but not one that comes for free.
Canon is a healthy company, and certainly not fully developed. It should still have several years of growth ahead. At least some of that growth is priced in; my more conservative valuations now show that the company is either fully valued or fairly close at $66 per share. This exercise just goes to show how "flexible" valuations are. The calculations are concrete, but the inputs and the accuracy of the assumptions behind them can make a huge difference in the final result. With that said, I have some work to do on double-checking my assumptions for Canon over the next week -- and deciding whether to sell or hold.
China blocks VOIP calls for two years: FT
China has moved to protect its fixed telephone line business by banning free Internet telephone services for at least two years, the Financial Times reports.
Wang Leilei, chief executive of Chinese internet portal group Tom Online, which has a joint venture with Luxembourg-based telephony provider Skype, said China would not issue any licenses for computer-to-telephone calls until 2008.
The government "is not going to issue VoIP (Voice over Internet Protocol) licences until 2008," Wang told the newspaper.
The move would likely be major setback to Skype, which was reportedly in talks last year with Chinese telecom operators to launch its computer-to-telephone service, SkypeOut.
Wang, whose company is controlled by Hong Kong's wealthiest businessman Li Ka-shing, played down the decision.
For Tom Online, "our strategy is to grow our user base. With a big user base, there is a lot you can do. Revenue (from SkypeOut) is not important to us because we have not put in a lot of cost," he said.
Skype is a leader in VoIP and provides a subscriber service that enables web users to make ultra-cheap or free phone calls using an Internet connection on their computers.
Skype's computer-to-computer calls are free while computer-to-telephone calls are charged at rates often much less than with fixed line services.
China Telecom has described Skype's services as illegal and the newspaper said last year that China was experimenting with software in Beijing, Shanghai, Guangzhou and Shenzhen to block them.
Fixed-line operators are concerned that SkypeOut could undermine their core business.
Last September US technology group Verso Technologies admitted that it had sold software to an unnamed major Chinese telecoms firm that would allow China to block such telephony services.
Risk or Safe?
In 1929, John Raskob had a sexy wife, smart kids and a great job. He was the chief financial officer at the world's largest company, General Motors.
Then he did a silly thing. He offered this advice to anyone who would listen: Invest just US$15(S$24) per month in stocks. In 20 years, it will grow to US$80,000.
That translates to a super high annual return of 24 percent. But in the booming 1920s. It was believable.
On 3 Sep 1929, just days just after his comments were published, the Dow Jones stock index hit an all-time high of 381(Today it is over 11,000)
Two months later, US markets crashed. Then over the next two years, shares lost 80 percent of their value. Millions lost their life savings and Mr Raskob's advice was ridiculed. How can you be so wrong?
Today, if you had stuck with Mr Raskob's advice, you would have done all right. Your US$15 per month would have grown to US$17,000 in 20 years and US$65,000 after 30 years.
That's a return of 13 percent per year, which is less than the 24 percent Mr Raskob forecasted. But it is respectable and far exceeds "safe" investments like bonds which earned just 3 percent over the same period.
The lesson from this amazing story is that risky investments are not risky in the long-run. To prove it, we need data from the US. Since 1926, US stocks have out-performed bonds 80, 90 and 100 percent over periods of 10, 20 and 30 years.
In fact, there has never been a 30-year period when stocks have lost money or even earned less than bonds. Returns to stocks averaged 10 percent against 5 percent for bonds.
We think of bonds, savings accounts and fixed deposits as safe. It turns out, however that the safest way to preserve your wealth is to buy and hold a diversified portfolio of stocks.
What's a Bond? - By Motley Fool Staff
Most of us have heard of bonds, but many of us don't understand just what a bond is. It's essentially a long-term loan. If a company issues bonds, it's borrowing cash and promising to pay it back at a certain rate of interest.
Bonds sold by the U.S. government's Treasury Department are called "Treasuries." State and local governments issue "municipal bonds," while businesses issue "corporate bonds" (sometimes called corporate "paper"). Companies that may be perceived as low-quality are forced to offer high-interest-rate "junk" bonds to attract buyers. There's a higher risk that someday they won't have the cash to cover interest payments and the bonds will default.
Bond investors receive regular interest payments from the issuer at what is called the "coupon rate." For example, a $1,000 bond with a coupon rate of 10% generates payments of $100 per year. When the bond matures -- after perhaps five, 10, or 30 years -- investors get back their initial loan, called "par value." Most corporate bonds have a par value of $1,000, while government bonds can run much higher.
Sometimes a company will "call" its bond, paying back the principal early. All bonds specify whether and how soon they can be called. Federal government bonds are never called.
To calculate a bond's yield, divide the amount of interest it will pay over the course of a year by its current price. If a $1,000 bond pays $75 a year in interest, its current yield is $75 divided by $1,000, or 7.5%.
Once issued, bonds can be traded among investors, with their prices rising and falling in reaction to changing interest rates. For example, when rates fall, people bid up bond prices. If banks are offering 6%, an 8% bond starts looking good.
In the long run, stocks have outperformed bonds handily. According to Jeremy Siegel's Stocks for the Long Run, from 1802 to 1997 (yes, you read that right -- 195 years), the stock market offered an average nominal annual return of 8.4% per year, compared with 4.8% for long-term government bonds.
Stocks outperform bonds even when you eliminate the 19th-century data. According to Ibbotson & Associates, from 1926 to 2000 (notice that includes the Great Depression years), U.S. Treasury bills returned an average of 3.8% per year, compared with 5.3% for long-term corporate bonds and 11% for stocks. If you had invested $5,000 in T-bills 50 years ago, it would now be worth $33,272. Growing at 11% in stocks, it would be worth $922,824. (From 1926 to 2000, inflation grew at an average rate of 3.1% annually.)
For long-term investors, stocks offer the best potential for growth. Still, it's smart to understand how bonds work before you dismiss them. And also to understand that although stocks may average 11% growth over a long period, over the next five or 10 or even 20 years, the average return may be different.
Article Excerpted from:
http://www.fool.com/News/mft/2006/mft06031603.htm
Company Update: UTAC, SMIC's China venture factory starts output
SINGAPORE, March 17 (Reuters)
The following statement was released by the company:
Semiconductor Manufacturing International (Chengdu) Corporation Holds Grand Opening Ceremony for Assembly and Testing Facility
Shanghai, China. March 17th, 2006- Semiconductor Manufacturing International Corporation (SMIC) held a grand opening ceremony for its semiconductor assembly and testing joint venture with United Test & Assembly Center Ltd based in Chengdu, named Semiconductor Manufacturing International (Chengdu) Corporation, also known as AT2.
Approximately 300 guests, including customers, investors, banks, strategic partners, vendors, industry experts, various government representatives, and Mr. Lee Joon Chung, Group President & CEO of UTAC attended the ceremony.
The assembly and testing facility is located in Chengdu's Special Export Manufacturing Zone. The total land area is 40,668 square meters.
Construction area is 215,000 square meters, including approximately 1,000 square meters of clean room. Investment will amount to approximately US$175 million in the first phase.
As an investment entered by one of the leading foundries in the world, SMIC, and UTAC, a leading semiconductor test & assembly company, AT2 services SMIC's global customers and also China's growing spectrum of semiconductor activities with a comprehensive suite of technology and product.
AT2 has commenced pilot production on TSOP. Initial IC packaging product is expected to focus on TSOP, SO8, TSSOP, PDIP, TO220 and DPAK in the first quarter of 2006 and mass production will be expected to produce up to 10M to 100M pieces chips per month for assembly line according to the requirements of different products.
At the opening ceremony, Dr. Richard R. Chang, President and CEO of SMIC, said, "China has become the largest IC market in the world. With support from our partners and the Chengdu government, we aim to offer a complete turn-key solution in China for our global customers. We are already seeing strong demand for our services and I believe the partnership between SMIC and UTAC will continue to serve the needs from customers here in China and around the world."
"We are delighted that our maiden joint venture with our partner has begun operations and is already seeing strong demand," said Mr. Lee Joon Chung, Group President and CEO of UTAC.
"The semiconductor market in China is growing rapidly and we believe that this new facility will complement UTAC group's existing operations in Shanghai to better serve our customers."
Mr. Ge Honglin, the Mayor of Chengdu, said, "The opening of SMIC (Chengdu) marks the new milestone of SMIC's development in China, and we appreciate the opportunity to cooperate with SMIC. We would continue to try our best to support SMIC's development with highly efficient services to create a good investment environment and infrastructure for corporations in Chengdu."
[Outline of Semiconductor Manufacturing International (Chengdu) Corporation]
Company Name: Semiconductor Manufacturing International (Chengdu) Corporation
Date of Establishment: December 24, 2004
Total Investment: US$ 175 Million
Address: High Tech West Area, Chengdu City, China
Cleanroom Area: Approximately 11,000 square meters
Estimated Production Capacity: 10 to 100 Million chips/month with various products
Other Articles on this Blog.
United Test And Assembly Centre purchased new building for expansion
United Test and Assembly Center - Good Times Ahead
Singapore's UTAC to replace Great Eastern in STI
Taiwan stocks offer route to benefit from China’s growth: US fund manager
HONG KONG— While investors around the globe hunt for stocks that will help them cash in on China’s red-hot economic growth,a United States-based fund manager says neighbouring Taiwan offers investors a good route to capture this growth
“Certain Taiwanese companies that are active in China offer excellent potential returns,” Mr Steven Champion, president of the Taiwan Greater China Fund, said in an interview with Dow Jones Newswires.
Mr Champion’s picks for the closedend,New York Stock Exchange-traded US$115 million ($186 million) fund include Taiwanese companies that export goods to China or have substantial investments in China.Taiwanese companies are some of the largest investors in China: Two-thirds of China’s information technology exports are made by Taiwanese companies with factories in China.
Mr Champion’s fund, established in 1989, includes Taiwanese large capitalisation companies such as Hon Hai Precision Industry Co, which manufactures electronics for several global brands; and AU Optronics Corp, Taiwan’s largest liquidcrystal-display maker by revenue.
Mr Champion said the fund had 70 per cent of its holdings in Taiwanese technology companies that have strong business ties with China, mainly through production facilities in the mainland.
Technology companies account for around 60 per cent of the market capitalisation of the companies in the Taiwan Stock Exchange Index.
Technology companies offer the best link to China because they manufacture and export a large portion of their goods from China, Mr Champion said.
But Taiwanese banking stocks are not on his list.
“We don’t have financial stocks because they are not allowed to invest capital into China,” said Mr Champion.
The fund is also looking to find smallcap stocks to invest in. Mr Champion said small-cap companies offered good value and growth prospects and would allow the fund to diversify its portfolio.
So far, the fund has been able to beat the benchmarks. Last year, the Taiwan Greater China Fund returned 8.16 per cent,compared with the 6.8-per-cent gain in the Taiwan Stock Exchange Index in US dollar terms and 6.4 per cent in the MSCI Taiwan Index, according to Mr Champion.
That beat the drop of 8.3 per cent in China’s Shanghai Composite Index, though the fund fell short of the 12-per-cent rise in the Hong Kong H-share Index. The H-share Index is made up of Chinese companies listed in Hong Kong.
Mr Champion said Taiwan’s market,when compared with China’s exchanges, offered investors interested in the Chinese growth story a more transparent vehicle to tap into.
“Taiwan has much higher levels of corporate governance than China,” said Mr Champion.
“China is an economic miracle, but it is not so easy to play this.” China’s domestic stock market lacks risk controls and good corporate governance standards, and Mr Champion is not the only one who says Taiwan operates to a higher standard.
The 2005 CG Watch, published by CLSA and the Asian Corporate Governance Association, ranks Taiwan fifth out of ten Asian economies in corporate governance standards.
China ranks ninth on the list topped by Singapore and Hong Kong.
Several Taiwanese companies, which are included in the fund’s top 10 holdings,are among CG Watch’s top-ranked companies for corporate governance. There are no Chinese companies on the list.
“We wanted to invest in a more developed market but get good exposure to China,” said Mr Champion.
Yet, while Taiwan offers investors a more transparent market than China, it still has plenty of risk. This includes poor treatment of minority shareholders and lax accounting standards. — DOW JONES BLOOMBERG
A Fleet of Foot Stocks - By Jeremy MacNealy
Consolidation continues to shrink the field of viable contenders for the title of Best Footwear Investment. Fool contributor Jeremy MacNealy focuses in on the athletic side of footwear and highlights one large-cap, medium-cap, and small-cap stock to see how each one measures up.
The spirit of the Olympics has been on full display in recent days, and in light of this world-class, worldwide competition, it's a good time to check on an equally tough sport -- the battle for your athletic feet.
Recently released 2005 data from research firm NPD Group shows that, once again, footwear sales growth continues to outpace apparel. With 9% revenue growth at NPD, an analyst characterized the year by saying, "Footwear is on fire." And where there's fire, we may just find an investment or two to heat up your portfolio. The number of companies in this sector seems to be shrinking, with buyout offers becoming standard practice -- Adidas' purchase of Reebok being just one example -- but there are still enough companies left for us to examine.
In this investigation of the industry, we will focus on three enterprises, representing large to small capitalizations in Nike (NYSE: NKE), Timberland (NYSE: TBL), and Stride Rite (NYSE: SRR), respectively, to see what each offers as potential investments.
The reigning running champ
In the University of Oregon's track and classroom are found the seeds that grew into the Nike behemoth. Track coach Bill Bowerman and accounting student Phil Knight made a small partnership, amounting to about $1,000, in order to import a Japanese-made running shoe. Fast-forward more than 40 years later, and Nike's pinkie-toe-sized beginnings have ballooned into an empire with a market capitalization of $22 billion and annual sales of more than $14 billion.
Like an athlete preparing for the Olympics, Nike continues to push its abilities to higher levels of performance. For example, from 2001 to 2005, sales, gross margins, the cash-to-long-term-debt ratio, and the return on equity have all steadily strengthened for the company. What this tells us is that Nike not only knows a thing or two about selling shoes but also that management knows how to run a business. As investors, we are looking to invest in well-run companies, and Nike is meeting that challenge.
In the most recent quarter, footwear sales led the charge with high double-digit growth in the U.S. and the Americas. In the Asia-Pacific region, however, sales improved only marginally. But that means there's an opportunity for growth, and management suggested in its quarterly conference that Nike will begin employing a more aggressive strategy in China and India. CEO Bill Perez put it bluntly: "We want to own those markets."
To tackle that objective, Nike plans to use a more cohesive global strategy to better connect the brand to the consumer by removing gaps in its distribution model and making greater use of both its Nike stores and the Internet. Something tells me that the enterprise that brought us His Airness, Michael Jordan, and the new young king, Lebron James, to the world of footwear will indeed conquer these emerging markets.
Hiking up distribution
In the NPD report, Timberland was mentioned as a company that stands to benefit from the recent trends toward the "SUV of footwear" -- a term that points to boots and hiking styles. A look at Timberland's fourth-quarter results however, doesn't exactly paint a picture of an athlete in his or her prime. Revenues for the quarter increased by a paltry 2.3% compared with the year ago period. Against industry trends, ironically, it was Timberland's apparel and accessories units that offered the greatest growth -- they increased 5.4% year over year.
Time will tell whether the company's recent SmartWool acquisition will help kick-start sales. For 2005, SmartWool's annual sales are estimated to be in the $42 million range -- a nice boost to Timberland net revenues for 2006. I helped out SmartWool's top line by purchasing several pairs of its socks for hiking. This is a line that Timberland, given its more expansive distribution model, should be able to integrate into its existing structure and build upon.
In the meantime, Timberland's cash position and cash generation are two positives worth mentioning. It currently has $213.2 million in cash and no debt. This kind of balance sheet gives it plenty of flexibility to aggressively expand its operations either organically or through additional acquisitions.
Additionally, the company is doing a decent job in bringing in the free cash flow (FCF). Despite inventory write-offs in 2005, which dropped its FCF slightly from 2004 levels, it still produced $156.3 million in FCF. What's more, with a market cap of $2.3 billion, Timberland trades at roughly 13 times FCF. In light of management's mid-single-digit growth estimate for 2006, as well as upside potential that may come as Timberland builds out the SmartWool brand through its distribution model, this is a reasonable multiple.
A baby shoe worth looking into
With a market cap of $522 million, Stride Rite is by far the smallest of these three footwear companies. But don't take it for a chump. The scrappy company has been a champ of an investment over the past three years, with a compound annual growth rate over that period of 21% -- almost 7 percentage points more than the S&P 500's performance.
Why has it done so well? It seems the market keeps underestimating Stride Rite's potential. For example, using the consensus estimate of $0.93 per share for the year, it's trading at roughly 16 times this year's earnings. It is also being valued at approximately 16 times the trailing 12 months of FCF. Analysts, on the other hand, are expecting the company to achieve strong double-digit revenue growth (25.6%) and earnings-per-share growth (41%) this fiscal year.
A major reason that growth is expected to jump this year is a result of Stride Rite's recent acquisition of Saucony, which, along with its Hind brand, should help Stride Rite make solid advances in the athletic footwear and apparel market. Saucony, for instance, will soon be launching a new line of retro footwear. Set to hit stores in fiscal 2007, Saucony Originals are a technical running shoe modeled after an early-1980s version.
If redoing the old styles works for apparel retailers such as Guess? (NYSE: GES) and Abercrombie (NYSE: ANF) -- with their flared pants, which are hot all over again -- it should work for a shoe manufacturer. Should the company continue to improve its growth rate organically with product innovation and through smart acquisitions, Stride Rite could indeed be considered an interesting small-cap play.
Time to lace 'em up?
Nike, Timberland, and Stride Rite are all trading at approximately 16 times this year's projected earnings, even though each has different growth expectations for the year. But whether it's dynamite operational performance in Nike, a reasonable enterprise value-to-FCF multiple in Timberland, or a solid estimated double-digit growth in Stride Rite, all three carry a reasonable value at today's prices. Both Nike and Stride Rite add an extra incentive to investors with comparable dividend yields. Finally, Nike stands out above the other three with its exceptional consistent performance on margins, balance sheet, and returns on equity.
All three are worthy candidates for additional research, but there is a reason why the Swoosh is the most recognizable symbol in athletic apparel and footwear -- the company is a champion.
Article excerpted from http://www.fool.com/news/commentary/2006/commentary06022404.htm?ref=foolwatch
Noble Group : An Undervalued Business Model.
"Buy when others are fearful"
Noble Group is a market leader in managing the global supply chain of agricutural, industrial and energy products. With a network of over 70 offices in 35 countries serving more than 3500 customers. Noble Group adds value at every link in the supply chain. With 2004 revenue of US$8.6 billion.
In 2005, Noble Group was assigned ratings from Moody's Investors Service and Standard & Poor's Ratings Agency and joined the benchmark Straits Times Index and MSCI Index in Singapore. During this period, the Group was also recognized by Hewitt Associates as one of Hong Kong’s Best Employers, The Asset for its excellence in Corporate Governance while topping the annual Forbes 2000 list of best stock performers over the past five years. In 2004, the Group’s Board of Directors was awarded the Listed Company (Main Board) Board Award from The Hong Kong Institute of Directors and ranked first on the Billion-dollar club of the Singapore Stock Exchange for Total Shareholder Returns over a 3 and 5 year period.
Let me show you my buy decision making for Noble Group.
On 8th September 2005,
Noble group subsidiary Noble Energy expanded into the Global Carbon Market. Lead by a experienced team.
On 1 January 2005, the EU established a new carbon market through the implementation of the EU ETS. The EU ETS resulted in approximately 7,300 companies being exposed to greenhouse gas emission compliance requirements. Through legislation enacted by the local governments of the 25 EU member states, the affected companies have imposed upon them tight carbon emission restrictions. The first compliance period under the EU ETS is 2005-07 which precedes the first Kyoto Protocol compliance period which starts in 2008. Under the EU ETS, many companies, and especially those in the power industry, received substantial under-allocations of emission allowances and will have to obtain credits from the market to meet their compliance requirements. Non-compliance with EU ETS requirements has significant adverse financial consequences as penalties for non-compliance in the first EU ETS compliance period are € 40 per tonne of excess emissions plus the requirement that the entity still obtain the necessary emission credits (currently market priced at approximately € 20 per tonne) to be compliant. The second emissions compliance phase in the EU runs from 2008-12 (parallel with the first Kyoto Protocol compliance period) and will bring even tighter emission allocations and higher penalties (€ 100 per tonne) for non-compliance.
The ratification of the Kyoto Protocol by Russia and its coming into effect on 16 February 2005 has created from 2008 onwards a worldwide emissions compliance market with many interesting opportunities. For example, countries such as Japan and Canada are expected to be “short” in
respect of emission rights and accordingly such market players will have to source additional credits from the world market.
The existing combination of Noble’s coal and raw material portfolio, its excellent global contacts and positioning in the fast growing Asian markets, in conjunction with the new carbon credit team’s skills and market access, will allow the Group to pursue many promising emission market opportunities in the future.
The new carbon activities of Noble will operate from its Dublin subsidiary, Noble Carbon Credits Ltd. and supported by two offices in Frankfurt and Amsterdam. Leveraging off its current businesses and industry contacts, Noble plans to quickly expand this business worldwide
and sees itself as the first player with a global sourcing, marketing and portfolio management approach to this new market.
The activities of the new carbon team will initially focus on the global sourcing of CERs from Kyoto’s “Clean Development Mechanism” projects in developing countries and the sourcing of EU Allowances. Subsequently, Noble plans to become directly involved, through investment and otherwise, with greenhouse gas abatement projects.
Noble Energy expands into India
Noble Group, has hired Mr Ajay Mishra to expand its Carbon business in India and the Asia Pacific Region. Mr Mishra was most recently with TATA International. Mr Mishra has broad experience in the full range of carbon products (Coking Coal, Coke, Anthracite and PCI). Mr Mishra will be joined by other experienced personnel in forming the new Kolkatta operation of Noble Energy. This team will allow Noble Energy to capture geographic and product group synergies with the formation of this new office.
"Ajay and the team will be key in expanding Noble Energy role within the carbon market in India. It is a very exciting time in the Indian steel market and to be supported by the most experience team in the market place allows us a solid base to expand business going forward. This team will also support Noble Group’s other strategic relationships in India” said Mr William Randall, Director, Noble Energy Inc.
Quoting an article from BusinessWeek.
In Asia, A Hot Market For Carbon; The Market For Carbon Credits Is Cutting Pollution
In Developing Countries
BusinessWeek
19 December 2005
by Frederik Balfour
On the outskirts of Bangkok, generators fueled by methane from swine manure make electricity. In China's Inner Mongolia, wind farms are sprouting up along the breezy steppes. In India's Andhra Pradesh state, villagers power their tractors with a cleaner-burning diesel substitute pressed from seeds of the mighty honge tree.
What do these far-flung projects have in common? They're all the direct result of the 1997 Kyoto Protocol, a sprawling global initiative
to reduce emissions of greenhouse gases linked to global warming. The U.S. and a handful of other nations spurned this treaty, in part because it exempted emerging nations from making their own cuts. But the innovative financial systems that Kyoto inspired have made it relatively easy for developing countries to hop on board.
Under the Kyoto treaty, developed countries are required to cut emissions by an average of 6% from 1990 levels by 2012. Each
country is permitted to emit a certain number of tons annually of carbon dioxide or its equivalent. Governments then issue emission "allowances'' to polluters within their borders, and these can be bought and sold by companies worldwide.
Through this carbon trading system, big polluters in developed countries can pay companies in developing nations to cut emissions in their stead. Since many factories in developing countries use dirty, inefficient processes, it's often cheaper to clean them up than to replace the more modern equipment used in wealthy nations.
The system is helping foster green investments in countries that are home to some of the world's biggest polluters. In August, a Japanese consortium led by engineering outfit JGC Corp. and Marubeni Corp. joined up with a chemical maker in China's Zhejiang Province to recover gases released in making refrigerants. The deal will result in a reduction of the equivalent of 40 million tons of
CO2 -- creating credits worth about $200 million.
Sumitomo Corp. and Rabo Bank of the Netherlands have a similar contract with Gujarat Fluorochemicals in India for 3 million tons of carbon credits. And Paris-based chemical maker Rhodia is cutting nitrous oxide emissions at its plants in South Korea and Brazil.
Rhodia will likely sell those credits, equivalent to as much as 13 million tons of CO2.
Worldwide, developing countries are promising sweeping action, from cleaning up concrete plants, to sowing new forests that absorb carbon dioxide, to harnessing methane from landfills to generate power. So far, 39 projects have been registered with the U.N., and hundreds more are in the pipeline. Ultimately, the scheme could net as much as $12.5 billion for developing countries by 2012, the World Bank says. "There is a lot of appetite for these credits," says Edu Hassing, a project specialist with the Asian Development Bank in Manila.
Since the Kyoto accord took effect on Feb. 16, the market for emission allowances has soared. Most of the action is on the Amsterdam-based European Climate Exchange, or ECX. In the exchange's first month, 1 million tons of CO2 credits were traded. Next year, it's expected to be 700 million tons -- roughly 2 million tons a day -- and volume is expected to grow to some 4.8 billion tons in 2008. "It's a large baby for its age,'' says Sara Stahl, an ECX economist. The baby is getting richer, too.
Since the beginning of the year, prices have more than doubled, to $26 per ton of carbon dioxide.
So far, credit purchases from developing countries are relatively rare, and more often than not they're funded by public institutions
rather than private companies. For example, several European governments have pledged to buy up to $1.1 billion worth of credits through the World Bank, which is acting as matchmaker for companies in the developing world that want help funding cleanup efforts.
Recent examples include wind turbines with capacity of 26 megawatts in a remote part of the Philippines and a project to capture and harness methane gas released from coal mining in China's Shanxi Province that will cut emissions by 4 million tons annually. But as 2012 approaches and companies in the West realize it's cheaper to buy credits than to clean up at home, purchases of credits from developing countries are expected to soar.
There's little doubt that India and China will be big sources of credits. Both are industrializing at a breakneck pace with little regard for the environmental consequences, so there's no shortage of areas where pollution can be reined in. India has already negotiated dozens of carbon credit sales in projects ranging from hydro stations to harnessing methane gas released by decomposing garbage.
China, on the other hand, has been a relative laggard, with just three such deals so far. But many others are in the works. "China has
a huge potential to become one of the largest markets'' for pollution credits, says Kishan Khoday, team leader for energy and the environment at the U.N. Development Program in Beijing.
Some projects are clear winners. Gases released from making refrigerants, for instance, have 11,700 times the global warming potential of carbon dioxide. So capturing even small amounts can add up to huge numbers of carbon credits. Methane, meanwhile, does 21 times the damage of pure carbon dioxide, and it's a fuel in its own right, so harnessing it can offer a big payoff. Such projects are rarely undertaken without carbon trading, but with it they can be highly profitable, offering returns of as much as 30% per year, says Zhao Jianping, an energy specialist at the World Bank.
Other potential projects, though, will be harder to pull off financially. For example, in China it costs about 6.2 cents to produce a
kilowatt-hour of electricity using wind power, compared with 3.7 cents for coal. Current prices for carbon credits translate into a subsidy of roughly 0.6 cents per kilowatt hour, though funding initiatives planned by Beijing may make wind power more attractive.
How valuable will carbon credits become? Currently, credits cost up to 70% less than allowances because if a project falls through
and the developing-country partner doesn't clean up its act, the company that bought the credits is held responsible. "We must do
a hell of a lot of due diligence,'' says Thorsten Ansorg, director of Noble Carbon Credits Ltd., a subsidiary of Hong Kong trading firm Noble Group that has bought millions of tons of credits from developing countries. "We have no desire to buy something that never materializes.'' But as the market gets more efficient at separating smart projects from wishful thinking -- and as companies in the West struggle to meet their Kyoto targets -- prices are likely to rise. "As the deadline gets near,'' says Andres Liebenthal, an environment specialist at the World Bank in Beijing, "there is going to be a scramble'' for credits.
Clean & Green
Carbon credits are helping developing countries clean up their industry
COUNTRY PROJECT VALUE CARBON
(MILLIONS CREDITS OF (MILLIONS DOLLARS) OF TONS)
China Generating power using methane recovered from coal mining $17 4
India Recovery of gases released in making refrigerants $15* 3
Indonesia Capture of pollutants from cement production $11 2*
Guatemala 43-megawatt hydro plant to replace coal facility $5 2
Philippines 25-megawatt wind farm to generate clean electricity
$2.4 0.6
* BusinessWeek estimate Data: World Bank
Nuclear energy
“Noble seems well-positioned to prosper from Chinese growth,” said BusinessWeek. “With Beijing planning to build 30-plus nuclear reactors by 2020 to meet the country’s energy needs, Elman wants to get into the business of importing, transporting, and processing uranium for China.” The magazine also took note of Noble’s plans to participate in the global market for carbon credits, which the company sees as an emerging lucrative business as a result of emission-control laws.
I am a contrarian and I have faith in its management and CEO Richard Samuel Elman to bring this fantastic company to greater heights. I was stunned when some forumners in CNA commented that the company's management is incompetent.
Look back , and you realised that Noble was build up meticulously by its management.
Regarding the transparency issue, the management has had given enough reasons to reassure current shareholders. More details should be given as commented by Elman.
For more information on Noble Group's business model:
Noble Group Presentation 2005
The business model is clearly "undervalued" by fellow investors.
Noble Corporate Website
Hear the Media Briefing held on 23Feb2006
Cheers
Niversphere.
Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information.
United Test and Assembly Center - Good Times Ahead
UTAC FY05 Net Profit More Than Triples To $41.8 Million On Doubling Of Revenue
• 4Q05 net profit highest-ever at $20.1 million, a five-fold increase over 4Q04
• 4Q05 revenue grew 19% QoQ, above prior guidance of 10-15%
• Record performance marks 10th consecutive quarter of sequential revenue growth and profit
• Guidance of 3-8% sequential revenue growth in 1Q06 vs 4Q05
• Target revenue growth rate of 40% for FY06
Group President and CEO of UTAC, Mr Lee Joon Chung, said, “We are pleased to have
achieved our 10th consecutive quarter of revenue growth and 7th consecutive quarter of profit growth. I would like to commend the UTAC team for achieving a splendid set of results, recording a milestone $100 million in revenue for a quarter while notching over $20 million in quarterly net profit.”
Company Background
The Company was incorporated in Singapore on 26 November 1997 under the name of United Test Center Singapore Pte Ltd and subsequently changed its name to United Test and Assembly Center (S) Pte Ltd in January 1999. It was converted to a public company limited on 15 May 2000 and changed its name to United Test and Assembly Center Ltd.
UTAC is a leading independent provider of test and assembly services for a wide range of semiconductor devices that include memory, mixed-signal/RF and logic integrated circuits. UTAC was ranked as the 9th largest independent provider of semiconductor test in 2002 by Gartner Dataquest. UTAC was ranked as the 8th largest independent provider of semiconductor test in 2004 by Gartner Dataquest.
Headquartered in Singapore, UTAC has manufacturing facilities in Singapore and Shanghai, as well as well-established sales network in Singapore, China, the United States, Italy, Japan and Israel.
UTAC offers full turnkey services that include wafer sort / laser repair, assembly, test, burn-in, mark-scan-pack and drop shipment, as well as value added services such as package design and simulation, test solutions development and device characterization, failure analysis, and full reliability test. The Company's manufacturing facility in Singapore is certified under ISO 9001, QS 9000, ISO 14001 and SAC Level I quality systems.
Its customers comprise integrated device manufacturers, fables companies and wafer foundries that design and manufacture semiconductors that power modern electronic devices. Its expertise in both memory and non-memory (mixed-signal/RF and logic) semiconductor devices allow it to provide wide-ranging solutions such as multi-chip packages that integrate memory and non-memory die. For the non-memory segment, its "BM/W" strategy focuses on further strengthening its capabilities in the faster growing Broadband and Mobile/ Wireless communications sectors
An Article from Dow Jones:
Utac plans expansion by first half of the year: Sources
UNITED Test & Assembly Center (Utac) is pressing ahead quickly with expansion plans in a sign that demand for chip testing and assembly remains robust.“Utac is looking at expanding the Singapore operations by the end of the first half of this year,” a person familiar with the matter told Dow Jones. A second source said the company would expand its Singapore operations by setting up “a new factory”. “They are also expecting to expand in Shanghai ... and are hiring more engineers there,” this second source said. A company spokesperson could not immediately comment. At Utac’s fourth-quarter earnings conference in January, its chief executive Lee Joon Chung indicated the company wanted to expand production facilities but gave few details.“We are looking at an expansion for new sites ... Our Singapore plant is getting quite tight in terms of capacity,” Mr Lee said. At the January conference, Utac forecasted a capital expenditure of US$180 million to US$200 million ($291 million to $324 million) for its current financial year to expand production in Singapore, Taiwan and Shanghai. Utac expects stronger take-up of thirdgeneration mobile handsets and demand for bluetooth and MP3 players to help it reach its target of a 40-per-cent increase in revenue in the current fiscal year. The chip assembler and tester posted a net profit of US$20.1 million for the three months ended Dec 31, compared with the US$3.8 million recorded in the corresponding
period — DOW JONES
Recent Developments For UTAC:
Media Release - UTAC Begins Testing of Satellite Communications Chip For GCT Semiconductor, Inc.
UTAC Selected As Prime Supplier For European Cordless Chip Maker SiTel
UTAC Attains Prestigious TS 16949 Certification For Automotive Sector
UTAC Starts Turnkey Production For Korean MP3 Chip Maker Telechips
Nepes Corp And UTAC To Invest US$30 Million In First 12-Inch Wafer Bumping Facility In Singapore
UTAC Starts Full Turnkey Production For Infineon's 512Mb DDR2 SDRAM
UTAC Strikes Alliance With RF Designer ARFIC; Becomes Partner In Singapore's ICommunity Consortium
UTAC To Be Preferred Partner For Nine Chinese Fabless Companies
Company recently gave its outlook & guidance
2006 capex to be $180~200m
− $98m has been committed in 4Q05 for delivery in 1H06
− Expansion of all sites
− Additional floorspace and capacity in Singapore
− Taiwan to begin MSLP and expand assembly
− Shanghai to begin assembly
Memory – DDR II growth gaining traction
− Chipset issue resolved, DDR II content projected to be >50% by 2H06
− Dual core processors PCs, new OS to drive up memory demand
NAND Flash market continue to be tight
− Additional test capacity in Taiwan
− New applications to sustain growth
Broad-based momentum for MSLP
− Business grew 30% q-o-q in 4Q05
− Faster 3G mobile growth with more 3G content made available globally
− Demand for Bluetooth, MP3 to continue with greater adaptation (eg automotive, PAN)
− Digital media will expand to include digital video
Screenshoots taken from Slides
Management Optimistic About Company.
UTAC operates in a cyclical industry. The investment returns should normally be good if a savvy investor can correctly identify the overall industry cyclical upswing.
UTAC will replace Great Eastern in STI on Wednesday 7th March 2006 and was given a weight of 0.75 which is relatively high.
Singapore's UTAC to replace Great Eastern in STI
See the new changes to the weights of the STI components.
(note: Only changes are shown)
Recapitalisation of STI Component Stock
Cheers
Niversphere.
Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information.
Want Want Holdings - Hot Kid Leading The Way
1st Q 2005:
Revenue Up 29.6%
EPS Up 47%
2nd Q 2005:
Revenue Up 19.6%
EPS Up 31.48%
3rd Q 2005:
Revenue Up 23.1%
EPS Up 55.56%
4th Q 2005:
Revenue Up 51.5%
EPS Up 93.67%
FULL YEAR 2005 RESULTS:
Revenue Up 31.4%
EPS Up 55.7%
Background
The Company was incorporated in Singapore on 28 October 1995. It changed its name to Want Want Hldgs Ltd on 22 March 1996, in connection with the change in its status to that of a public limited company. The principal activities of the Company are those of an investment holding company. The principal activities of the Group's subsidiaries and associate companies are the manufacturing and trading of snack foods and beverages and related products and investment holdings.
The Group started with I Lan Food Industrial Co Ltd, incorporated in Taiwan on 31 May 1962 and produced canned agricultural products for export. In 1983, I Lan entered into a technical cooperation agreement with Iwatsuka to manufacture rice crackers in Taiwan. Iwatsuka is one of the top rice cracker producers in Japan. Since then, I Lan has achieved a profitable track record and established a strong brand name for its rice cracker products in Taiwan under its Want Want brand name.
Majority of the Group's production facilities are located in China with the remainder in Taiwan. Its products are distributed widely with China taking up a dominant share of sales, followed by Taiwan and other export markets.
For many years, we have seen the great branding success by Want Want. Everyone regardless of age, race or religion would definitely have seen the Hot Kid advertisement on our TV sets. I bet you might be humming to the tone already. I have always admired the innovative taiwanese branding capability, and Want Want's management never failed to impress me either.
See Want Want advertisements(if you haven't got enough of it):
Want Want advertisements
Want Want is definitely the dominant player in the rice crackers industry in China. It operates it in an increasingly competitive environment. Want Want's focus on branding and nice packaging gives them a durable competitive advantage over other competitive brands furthered strengthened by its savvy management.
Want Want made an excellent move in 2002 to introduce the market with another subbrand of its own, Yi Wang. Flipped over the package and you will see the bottom right hand corner, Want Want Holdings in orange bold. This is a strategic move by the management to flood the market and maintain market share while eliminating would be cheap competitions. Based on the lastest financial report, it shows that there is an decrease in the contribution on their subbrand. I would like to think that consumers are increasingly becoming brand conscious and their purchasing habits changed. Want Want range of products broadly categorised as rice crackers, milk products, snacks, candies, beverages (coffee and carbonated drinks).
See their company website : Want Want Website
Many gave doubts when Want Want ventured into building a hospital, Want Want Hospital. Want Want's management talk freely to investors about its affairs and do not clam up when troubles and disappointments occur.In addition, Want Want did share buybacks during in 2003 after BNP Baribas issued an unfavourable report on Want Want. This shows the strength in depth of the management of Want Want.
Based on the lastest balance sheet, it shows that the hospital is starting to show some contribution to the bottomline of the company.Earnings would have been higher by US$ 2.2m if not for the one-off writedown in negative goodwill for acquisition of Qianhe Hotel.
Link: Want Want Hospital
Want Want Holdings is a company with a broad heart and is definitely always welcomed.
"As we have benefited greatly from the support of the general pubic through our years of growth,the Company reciprocates with active involvement in various charitable causes.To-date,Want Want Foundation in China and Singapore,and two funds in Taiwan,namely Want Want Cultural & Educational Fund and Taipei Sze Jeu Welfare Fund Society,have been set up to provide assistance and support to the aged,poor and less privileged Company and major catastrophe."
I recently did a scuttlebutt on our local shopping malls. 
. Want Want Xiao Man Tou
. Want Want Milk
. Want Want Crunchy Chocolate Wafers
. Want Want Rice Crackers - Seaweed
. Want Want Rice Crackers - Senbei(1)
. Want Want Rice Crackers - Senbei(2)
. Want Want Rice Crackers - Crequeline Au Riz
Competition
Want Want in its FY report stated the below market outlook:
Expect key raw materials’ prices to remain stable
Past effort in internal restructuring &
strengthening controls to be continued to yield
better results
Non-food businesses to commence operation
Start-up losses expected but impact would not be
significant in 2006
Continue focus in China given its vast potential
despite keen competition
I expect the Want Want brand to be around for many generations to come. Giving joy and laughter to both young and old. Bridging between generations.
给你旺旺，你旺我旺大家旺旺。
See Fisher's 15 Questions on how he evaluates a company.
Common Stocks and Uncommon Profits
So how do you find Want Want Holdings ? I would like to hear your views. Just add me a comment.
Want Want Annual Report 2004
Want Want AR Archive
Cheers
Niversphere.
Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information.
Singapore's UTAC to replace Great Eastern in STI
Wednesday March 1, 5:51 PM
SINGAPORE, March 1 (Reuters) - Singapore's United Test and Assembly will replace insurer Great Eastern Holdings in the city-state's Straits Times Index benchmark stock market index as of March 8, Singapore Press Holdings said in a statement on Wednesday.
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