Category: Investment

GoGreen Holdings Invesment

by Barry Dawes

INVESTMENT OPPORTUNITY FOR SOPHISTICATED AND PROFESSIONAL INVESTORS ONLY.

THIS IS NOT A PROSPECTUS


Beyond Meat (BYND.NASDAQ) produces plant based meat products

  • Stock price peaked at a 850% gain from US$25 IPO price to ~US$240!
  • Market cap exceeded US$14bn and is now ~US$10bn
  • Plant-based meat substitutes finally have meat tasting products
  • BYND will report 170% sales gains in 2019 to US$240m
  • Product distribution through mass marketing giving rapid sales growth
  • These products likely to achieve 10% market value share of 300mtpa meat market by 2030
  • Market value of broad meat market could be US$2-3tn by 2030
  • Clean meats revolution is starting as a global phenomenon
  • Australian based Go Green Holdings has Australian and Asian market opportunities
  • Product sourced from Taiwanese manufacturers with >25 year sales experience
  • ASX listing proposed through associate GoConnect (GCN.ASX) 44% share holder   
  • Significant upside potential possible here
  • Stock now available in Go Green Holdings at A$1.50/share
  • Commissioned Research Report attached
  • LINK to my  VIDEO interview on Go Green with ProActive investors    https://youtu.be/fSLXqksL8mA
  • Contact me to participate: 
    bdawes@mpsecurities.com.au 
    +61 2 9222 9111

Global meat production 300m tonnes

The first 'tastes, cooks and looks like meat' burger

GoGreen’s Product source at Hoya Foods in Taiwan  - >25 years production and global sales


INVESTMENT OPPORTUNITY FOR SOPHISTICATED AND PROFESSIONAL INVESTORS ONLY.

THIS IS NOT A PROSPECTUS


Video link to interview today on Proactive Investors

https://youtu.be/fSLXqksL8mA

Call me to participate

+61 2 9222 9111

Raisemetrex: A New Capital Raising Platform – Supported by MPS

by Alison Sammes

Key Points

  • New fintech platform allows universal access to capital raisings
  • Novel extended prospectus allows immediate access to new shares
  • Platform may allow streamlined access to future MPS capital raisings
  • Platform useful for Corporate Issuers as well as investors
  • The first opportunity is with Catalyst Metals Limited (ASX:CYL) raising at A$0.50
LINK TO RAISEMETREX REGISTRATION AND ALSO CATALYST PLACEMENT
Call me to discuss ways of participating bdawes@mpsecurities.com.au +61 2 9222 9111
Martin Place Securities is pleased to introduce you to a new fintech web based capital raising platform that can streamline some investment processes for you. The platform will host IPOs and placement opportunities in companies seeking new funding capital and Martin Place Securities will be the first broker to participate in this innovative system. The Raisemetrex platform is a very simple system. It will register you as a user and then allow you to apply for shares in capital raisings, retain all your registration details, provide a BPAY message to carry out the funds transfer and complete the process to the share registry. This will allow you to choose your investment size, complete registration details and send your payment from your desk or your smart phone within minutes. The registration will allow each user to have the details of multiple entities ranging from your own name to your super fund or investment company. The platform will securely provide all the details online to the share registry, allow you to add your HIN or SRN to the specific application form, and deliver the funds to the company's bank account via the BPAY system. The platform will also provide share application form records and a history of all your participation in capital raisings carried out through it so that maintenance of your tax records will be easier. This is a new platform that uses a current company prospectus for capital raisings (IPOs, placements and rights issue shortfalls) and MPS intends to eventually utilise it for most future capital raisings once certain Section 708D issues are incorporated in the platform. MPS encourages you to register with Raisemetrex now and you will see that the first opportunity is with a prospectus issue for Catalyst Metals Ltd (ASX:CYL) at A$0.50. CYL is one of the preferred gold exploration opportunities in the MPS gold sector and I would encourage you to invest if it fits your investment profile. CYL has a large tenement area immediately to the north of the world-famous Bendigo gold mine, which produced 22m oz @ 15g/t, and during the period 1850-1890 was the world’s largest goldfield. The Company has several projects along the important Whitelaw Fault and is in Joint Venture with Gina Reinhart’s Hancock Prospecting Pty Ltd, which is funding CYL to earn 50% in the Four Eagles project. The geology is very similar to Bendigo but is totally covered by younger sediments in open farm land. Drill results released on 11 July 2017 included 27m @ 22.3g/t, 22m @ 31.1g/t, and 7m @ 26.1g/t. Numerous other higher drilling intersections have been recorded and the tenements are likely to provide an open cuttable resource in the near future.  Such a resource could provide open cut ore which can be delivered to near-by existing processing plants. St Barbara Limited (ASX:SBM) recently took a 5% investment in CYL at A$0.50. These links gives access to two announcements from 11 July 2017 – A corporate presentation on company activities and the assay results from recent drilling. A prospectus for the CYL issue is available online once you have registered with Raisemetrex. To participate and register with Raisemetrex, please click on the button below. LINK TO RAISEMETREX REGISTRATION AND ALSO TO CATALYST PLACEMENT For any query on Raisemetrex or Catalyst please contact me or Daniela Vecchio on +61 2 9222 9111 or bdawes@mpsecurities.com.au or dvecchio@mpsecurities.com.au. Barry Dawes Executive Chairman Martin Place Securities

Petsec Energy Ltd – Remarkable oil production opportunity

by Alison Sammes

Key Points

  • Australian E&P company has acquired two key oil permits in Yemen
  • Oil production expected from each Block in 2017
  • Substantial current reserves to allow min 7,000bopd n 2018
  • Higher throughput of >12,000bopd expected in 2019
  • US operations to achieve higher revenues from Dec Qtr 2017
  • MPS appraised value A$1.46 as 12 month price target
  • Exploration potential in Yemen is very high
  • Numerous Yemen oil fields have reservoirs in `fractured basement rocks’
  • Potential for major rerating of share price from current A$0.16
Call Martin Place Securities to discuss ways of participating bdawes@mpsecurities.com.au +61 2 9222 9111
ASX.PSA began a new corporate strategy in 2014 away from its traditional US Gulf of Mexico base with the introduction of a new MENA technical team ex Oil Search and the acquisition of portion of the Al Barqa Block 7 exploration tenement in Yemen from ASX:AWE.  Petsec subsequently purchased of 100% of the Block from ASX:OSH, Mitsui and Kuwait’s national oil company Kufpec. Petsec followed this with the acquisition of the Damis Block S-1 production tenement with its 20,000bopd production facility on the An Nagyah field which had around 23million barrels of recoverable oil remaining and nearby undeveloped oil fields totalling 35 million barrels and 600BCF gas. The MENA technical and management team has had as much as 20 years operating experience in Yemen and were responsible for designing and drilling almost 50 wells on behalf of Oil Search. Petsec is now planning oil production in Yemen before end 2017 and should also experience the start of a growing cashflow again from its US operations. The results should be very beneficial for Petsec and could even be spectacular. Damis Block – S1 and surrounding fields and infrastructure Source:PSA These two tenements are well known to Petsec and the potentially >110million barrel Al Meashar discovery was drilled by Petsec’s now-current MENA team. With these two blocks Petsec now has potential oil production from each in the next six to nine months. Each block has the potential to produce substantial cashflows for Petsec that would match the company’s current market capitalisation in 2018 and far exceed it in 2019. Yemen’s geology reflects the abundant and unquestionably high quality source rock that has provided the carbonaceous source to oil formation throughout the Persian Gulf region but it also reflects massive regional tectonic activity that has literally shattered much of the brittle crystalline rocks such as granites and high grade metamorphics.   Oil from the source rocks has entered the intensive fracturing joints which have in many cases become very large reservoirs for oil entrapment.   The Masila oilfield region has several fractured reservoir fields totalling over 2 billion barrels and many of the post- 2000 oil discoveries in Yemen have been in such reservoirs. The abundance of high quality source rock indicates a much higher probability of any potential trap being charged with oil. Consequently these fractured basement reservoirs offer the potential of oil fields with hundreds of millions of barrels of oil.   ` Fractured Granites at Surface in Yemen Source: Oil Search The Al Meashar discoveries in Block 7 had an 800m oil column down to total well depth(no oil-water contact was encountered so this is still `open’ at depth) with much of this in fractured basement. Al Meashar Wells 1 and 2 with Reservoir Estimate Targets Source: PSA This field is only 14km from Austrian oil company OMV’s Habban oil field that has a 945m oil column in fractured basement and reserves of 170 million barrels in a very similar geological environment. The An Nagya field is a `conventional’ oil field but it also has potential for fractured basement reservoirs beneath it. An Nagyah Oilfield with vertical and horizontal wells Source:PSA `PSA is following Oil Search, now a major LNG producer out of PNG that in 2000 had also set up a Yemen portfolio and drilling ~50(including 12 exploration) wells. PSA, unlike Oil Search, has acquired 100% of existing or producing fields and infrastructure (as well as the experienced management and technical teams) on very modest outlays and so eliminated most capital expenditure risk. The parameters set by Oil Search for a Yemen portfolio are otherwise the same:
  • World class petroleum system –success rates >30%
  • Acceptable fiscal regime within conventional PSA terms
  • Access to producing infrastructure in key areas
  • Relatively under-explored petroleum basins
  • Recent discoveries and new developments
  • Low capex and opex (typically <US$<5/bbl and <US$10/bbl)
  • Active and established E & P industry’
I have prepared a thorough research report on Petsec Energy that represents due diligence carried out prior and after the underwriting of the A$11m rights issue by Petsec in December 2016. The Appraised Value 12 month share price target is A$1.46. The link is here:- http://www.mpsecurities.com.au/petsec-energy-research-report-13-june-2017-final/ The author and Martin Place Securities hold shares in Petsec Energy at the time of this report. The political position in Yemen has been uncertain since early 2014 when a rebellion led to curtailment of a wide range of business activities and the cessation of oil tanker liftings from Yemen’s four oil export terminals. Yemen oil production was essentially shut down. In recent times the rebellious regions have contracted to the north west on the border with Saudi Arabia and a small area on the Red Sea and well away from Petsec’s Block S-1 and Block 7 tenements. Petsec Energy’s Tenements and Yemen Pipeline and Port Infrastructure Improving prospects for a peaceful resolution in the hostilities allowed the Yemen Government’s national oil company Petro Masila in August 2016 to recommence oil production in the Masila oil fields in the eastern half of Yemen, well away from the disputed regions of the Shiite Houthi rebels near the northwest border with Sunni Saudi Arabia. Oil production is now around a reported 75,000 barrels per day and is pumped via the 138km Ash Shihr pipeline and allowing resumption of oil exports.  Shipping has resumed and an estimated six million barrels have now been lifted since August 2016 without incident. Petsec’s An Nagyah field has 15 shut in oil wells and 20,000bopd processing capacity that are linked to the major Marib pipeline that runs 438km to the Red Sea but this pipeline is closed and is not considered likely to be reopened before 2019. However, Petsec considers that it will receive official confirmation of its work plan during the Sept Qtr 2017 that will allow installation of a truck filling gantry (July) and a commencement of trucking convoys to Petro Masila oil fields and gaining access to the Ash Shihr pipeline for export. The Yemen Government has historically relied on oil revenues for around 60% of its Budget income and in the current environment has encouraged foreign companies to resume oil production. An Nagyah in Damis Block S-1 has 20,000bopd capacity today and should be able to re open wells to commence at 5,000bopd and steadily build up to 20,000bopd from existing wells and additional infill and appraisal wells.  The additional undeveloped resources should ensure the capacity of processing facility is filled. Damis Block S-1 Reserves The two Al Meashar wells should provide at least 1,000bopd while production testing.  The exploration potential in Block 7 is very high as these unrisked targets show. Petsec should receive about 63% of the fields oil revenues under the Production Sharing Agreement to cover authorised capital and operating costs and its ~29% of the oil field profit.  All sales receipts are received offshore to Petsec’s account.  These cashflows should allow the drilling of infill wells and subsequently some exploration wells on structures that have >100m million barrel targets. I have done considerable due diligence on this company’s operations and consider it an absolutely outstanding opportunity. There is a large amount of information to absorb to fully understand the opportunity here but I can say that the numbers are very high and the risks are surprisingly low. The key issues are that:- 1) Yemen is an early stage exploration target with underexplored basins and huge volumes of source rock 2) The MENA staff at Petsec spent over 10 years drilling wells here with Oil Search so they know the people, the local situation and the geological potential. The stock is A$0.15 and my target of A$1.46 is only notional and only uses the Low Case of 5,000bopd in Yemen. A perfectly rational high case could be >A$10/share. The PER for 2018 calendar Year is <1x and operating costs are <US$15/bbl and these would fall to about US$10/bbl once output is linked to a pipeline, probably in 2019. Looking at it dispassionately , it is clear that once production begins at An Nagyah, Petsec will be generating a lot of cash from low cost operations and should become something of a super stock.  Next to no capex is required and the two Blocks have accessible reserves ready for production and have very substantial upside. The oilfields and basins in Yemen are only in the early stages of exploration when large structures are being tested and, given the undoubted high quality of the Arabian Peninsula source rocks, it will certainly mean large oilfields are to be found.   The Hunt Jannah Block (to the west) and the Masila fields (to the east) are each over 2bn bbls. The existing fields are significant and in the experience of most operators in this basin it seems that they simply become much larger than initially thought. The Petsec MENA team led by Maki Petkovski have actually been the operators here in Yemen for many years through Oil Search so they know the geology, drilled many of the wells and most importantly, know the bureaucrats, local businessmen and politicians who make things happen in Yemen. The Yemen assets are almost beyond comparison with petroleum exploration prospects in Australia or in the very mature shallow Gulf of Mexico basins so the opportunities brought into Petsec are practically without peer for any ASX-listed company. Risk is in the eye of the beholder and whilst the entire Middle East is unstable and hostilities continue in the north west of Yemen the operations of Petsec should be able to work within a supportive community and government umbrella to resume output and apply risk capital, probably through farmins, to drill some of the indisputably attractive exploration/development targets. Petsec has acquired these magnificent assets and should production resume at An Nagyah as planned and Al Meashar deliver even modest reserves the upside is very high. Oil prices are currently softer on oversupply concerns but underlying demand has been rising faster than most forecasts so the medium term outlook incorporating increasing imports to China and India should not be negative for oil prices. MPS Research Report Low Case Earnings Forecasts for PSA at A$0.15. The link to the Research Report is here:- http://www.mpsecurities.com.au/petsec-energy-research-report-13-june-2017-final/ The author and Martin Place Securities hold shares in Petsec Energy at the time of this report. Barry Dawes  BSc FAusIMM (CP) MFASAA 19 June 2017

Free Access to Top Stocks with Alan Kohler

by Alison Sammes
Barry Dawes recently spoke with Alan Kohler for the Top Stocks on "The Constant Investor". If you're not already a subscriber (why not?!), you have still listen to Barry. We've been given free 24-hour access to The Constant Investor so that our clients can listen to episode. Just click on this: https://theconstantinvestor.com/24-hour-free-pass/ and sign up. The 24-hour free pass begins from the moment your registration is accepted and you'll then has access to the entire website. You can find Barry's interview here: https://theconstantinvestor.com/top-stocks/ Once you've got access, you can also listen to earlier interviews with Barry, including The Gold Spotlight

Dawes Points: Living Cities Property Development IPO

by Barry Dawes

Living Cities Property Development IPO

  • A$7.5m IPO (in a former mining company shell)
  • A$3.0m sought from local Australian market @ A$0.20
  • Prospectus available but closing on 30 May 2016
  • Projected FY18 NTA of A$0.23 and FY18 after tax distribution of A$0.15
  • Paradigm Securities Dongfang A$39m China IPO up 135% from October 2015
  • If you liked making 140% from the Dongfang IPO you might also like this.
  • Australia-China business co-operation increasing
  • Attractive potential long term growing earnings stream.
  • Share in growth in China's massive property market
  • Seeking investors and shareholder listing spread
Contact me on +61 2 9222 9111 or  bdawes@psec.com.au Download LCG Prospectus Readers of Dawes Points know my positive outlook for China.  This extraordinary national economy has almost 1,400m people living in a wide range of regional sub-economies that could each be half the size of the US.  Each sub region seems to have its unique character and not everyone has the same profile as Guangzhou (export industries), Shenzhen (technology) or Shanghai (everything!). We all know that China has an economy that is already bigger on a Purchasing Power Parity basis than the US and that the transitioning from a rural predominant population to an urbanised one is well established but still has a long way to run. This transition from agrarian subsistence to urbanised employment supports rising living standards. The statistic of an average 8-10%pa growth in personal income in China over the past decade is the clear indication of rising living standards and currently is somewhat independent from GDP growth.  Increasing participation in the urban workforce and more successful domestic businesses everywhere bring up the average per capita income without really reflecting wages increases although that surely is also growing. The Dongfang Modern Agriculture Holding Group IPO has provided an excellent window into China to see how its domestic economy worked.  DFM.ASX is now pushing A$1,000m market capitalisation after reporting a better-than-Prospectus forecast figure of A$90m. DFM Share price chart. DFM is now the market leader with around 2% market share of citrus harvesting measured by revenue through the sales of almost 250,000tpa of tangerines, navel oranges and the now very chic pomellos. It is a relative giant in a highly fragmented industry of citrus production and harvesting. Dongfang has a market of 1,400m potential consumers and should be able to capture more of the market through organic growth and acquisition. China has a very high savings rate and household bank deposits of well over RMB100 trillion (~US$17tn) so it could be expected that Chinese household expenditures will continue to rise into ever higher levels of consumer affluence. The higher disposable income supports a higher consumption level of fruit and protein (as meat, poultry and seafood) at the expense of grains. Property in China provides another very interesting aspect of economic transition. China builds new cities to provide new production facilities and to accommodate retail, industrial, commercial, office and residential activities. These cities are well planned with roads, rail, power, water and other infrastructure established ahead of time and the residential accommodation follows. Residential complexes need food and consumer retail establishments as the people move in. We all should already be aware of the speed with which these Chinese buildings are erected and completed with 24/7 construction at rates that in Australia we might only dream about. We should also be aware of the market demand in many of these regional areas surrounding second and third tier cities.  Strong, without the speculative element seen in Beijing, Shanghai and Guangzhou (Note that Shenzhen property prices are again at all time highs).

Which brings us to the Living Cities IPO  (LCG.ASX).

This is an ASX relisting through a capital injection into a former mining sector shell (floated by Martin Place Securities in 2006 as direct iron smelting hopeful Ferrowest). The Chinese backer of the Ferrowest Yalgoo Iron Nuggets Project, Sichuan Taifeng, through their Australian subsidiary TFA International Pty Ltd, is an established property developer in China and now wishes the listed company shell to move into property development – initially in China. The concept is to establish a property development company listed on ASX with a strong Chinese local partner to participate in a series of projects in China and further down the track consider opportunities in property in Australia. The market size is 40 times that of Australia and the deal flow is high, construction times are fast and project completions are common and rapid. Construction standards are high and often exceed those in Australia. This company offers Chinese investment opportunities with experienced Australian corporate governance and coming within an ASX listing. The relisting is seeking a total of A$7.45m with A$3.0m from local investors. Sichuan Taifeng has brought in Chinese property investor Yaopeng to underwrite A$0.5m of the public offer, take a cash placement of A$2.5m and take A$1.95m in debt conversion from Ferrowest creditors. All at the same 20 cent price as the public offer. The deal and offer structure is:
  Shares (million) Capital A$m
Existing shares on issue

5.62

 

Public offer

15.00

3.00

Committed equity from Yaopeng

12.50

2.50

Conversion of debt by Yaopeng et al

9.75

1.95

Advisor shares

0.75

 

Total

43.62

7.45

Sichuan Taifeng was established in 1997 and is a significant real estate, mining and trade partner in China with about 2,000 staff employed across almost 40 subsidiaries. Sichuan Taifeng has a very successful operating history of over 18 years in construction through recognising and completing opportunities in high growth new cities and towns and is offering to lend its experience and connections to Living Cities ('LCG')to provide a steady flow of property development opportunities. As was noted during the due diligence process for the Dongfang Modern IPO, corporate strategies must adhere to prescriptive regulations in China. Building regulations require the first stage of construction to `sea level' of a building to be complete prior to the settlement of any sale of subsequent stages above ground. This forces equity `hurt' money to be utilised before any commercial space is sold but once sea level is reached, all the space for the full development may be sold. The sale of commercial space thereafter is usually very rapid in these high growth towns and buyers must pay in full off the plan within very short time frames.  So equity risk becomes quite small and completed sales provide strong cashflow relatively quickly to fund construction. The results are very high IRRs and surprisingly low risk. The economy of China is about 10x that of Australia giving a very large market to operate in.  Moreover, in the current five year plan China will move about 50m people into urban environments over the next five years giving numerous opportunities for construction. The first opportunity for LCG will be in a new district about 180km south east of Chengdu in Sichuan Province's third largest city (2.8m), Zigong, where Sichuan Taifeng operates. Sichuan Taifeng has been running its Zigong real estate operation since 2001 and currently has around 130 staff, and is a major developer of office building, convention centre, shopping centres and large scale residential property in Zigong.  It currently has 18 buildings under construction in Zigong with development costs of over CNY 1.2 billion (AUD $265m). Sichuan Taifeng specialises in property developments that add value well beyond the simple construction process and any commodity residential apartment development. The Yantan New District is well established and a new shopping centre is being built to cater for current population of 30,000 which is planned to grow to about 60,000 over the next three years. Aerial view of building site  showing Yantan New District with Zigong City across highway in top left The development is close to the centre of this new district and will be the Zigong GuoFeng Farmers Market consisting of 40 ground level retail shops, a second floor level of 500 local farmer fresh fruit and vegetables produce stalls, two stories for larger scale commercial development and a fifth floor for office space in a 5 storey shopping centre. The site is just over 9,000m2 and all ~17,500m2 of commercial property will have been sold on completion. Artist Impression of the Guofeng Farmers Market Surrounding new apartments in New Yantan with site in foreground The total cost of construction is set at around A$20m and the sales are estimated conservatively at A$37m (conservative assumed prices at the time of completion of around 25% lower than current have been used) to give a net A$14m and an actual cash surplus for distribution of A$17m. Should the average sales prices be at current levels the total sales revenue would be almost A$10m higher and the gross after tax position would be about A$7m higher. LCG has an option to acquire a 51% equity interest in this development of the shopping centre from Sichuan FuChuan Property Co Ltd ('SFP'), the private company that owns the project. LCG's 51% share of the base case net after tax returns would be A$6.6m or A$0.15 per share fully diluted. Site earthworks and excavation for the foundations and basement have commenced. Sale of `strata' commercial space is expected to begin in the September Qtr 2016 which will allow additional bank funding and above ground construction to commence.  Completion is expected by March Qtr 2018. On appropriately conservative weighted sales prices that are 26% below current market levels the successful completion and sale should result in a Net Tangible Asset value of A$0.23 for end FY2018 and after retained development capital should be able to distribute A$0.15/ share in unfranked dividends. The IRR would be very high and well over 50% Details are provided in this Property Investment Research review of LCG. Comments from PIR include:- "Key Assumptions Underpinning the Financial Estimates 
ASSUMPTION ADOPTED IN FINANCIAL MODEL COMMENT
Exchange Rate AUD1.00=CNY4.5313 As per prospectus
PRC Enterprise Income Tax 25.0% Income Tax paid in China on profits
Common Accumulation Fund 10.0% Required to be retained in Chinese entity to fund future growth
Withholding Tax 5.0% Tax payable on money leaving China
Franking Credits 0% Assumes tax paid in China is not available for franking credits in Australia
Construction Costs AUD$20.0m estimate $7.1m Land Cost
  $0.9m Site Appraisal
  $5.2m Construction Expense
  $2.9m Other Development Expense
  $4.1m Finance, Mgmt, Sales, Other
Sales Revenue AUD$37.0m estimate (CNY 167.3m) Average Discount to market=26% L1 Commercial – 3,621m2 Ave Mkt Sales CNY 30,250 /m2 Forecast CNY 23,000 /m2 (24% disc) CNY 83.3m = AUD$18.4m
  L2 Farmers Market – 4,145m2 Ave Mkt Sales CNY 16,500 /m2 Forecast CNY 12,000 /m2 (27% disc) CNY 49.7m = AUD$11.0m
  L3 Commercial – 2,832m2 Ave Mkt Sales CNY 8,166 /m2 Forecast CNY 6,000 /m2 (26% disc) CNY 17.0m = AUD$3.7m
  L4 Commercial – 1,476m2 Ave Mkt Sales CNY 5,500 /m2 Forecast CNY 4,000 /m2 (27% disc) CNY 5.9m = AUD$1.3m
  L5 Commercial – 218m2 Ave Mkt Sales CNY 4,650 /m2 Forecast CNY 3,500 /m2 (25% disc) CNY 0.8m = AUD$0.2m
  Underground Parking – 4,153m2 Cost Price CNY 2,550 /m2 CNY 10.6m = AUD$2.3m
Source: China United Assets Appraisal Group (Australia) Report (CUAAP). Note: Average sale prices were based on 4 sites in close proximity as at April 2015 (ChuangXinCity, Longhu ShangCheng, GuanLan and JunHao Garden) - prices as provided by SFP and CUAAP report. PIR Estimated Returns
Estimated Return on Project Low Base High
       
Est Return on Project - 100% Share (SFP Entity)      
Current Net Assets - SFP 1.7 1.7 1.7
Additional Expenses (excl land) to spend -15.0 -13.0 -13.0
Write down of land on sale -6.4 -6.4 -6.4
Proceeds from Sale 37.0 37.0 40.7
Net Assets after Sale (SFP Entity) 17.3 19.3 23.0
PRC Enterprise Income Tax (25% of Profit) -3.8 -4.3 -5.2
Net Assets of SFP 13.6 15.1 17.9
Pan Aust Share of Net Assets (51%) 6.9 7.7 9.1
Est return on Project - 51% Share (LCG)      
Pan Aust Share of Net Assets (51%) 6.9 7.7 9.1
Common Accumulation Fund (10%) -0.7 -0.8 -0.9
Withholding Tax (5%) -0.3 -0.3 -0.4
Net Distributable Profit to LCG A$m 5.9 6.6 7.8
Net Distributable Profit per LCG Share $0.14 $0.15 $0.18
Impact on LCG Balance Sheet      
Net Assets - as at Dec 2015 -2.2 -2.2 -2.2
Capital Raising (max subscription) 7.6 7.6 7.6
- advisors expenses -0.2 -0.2 -0.2
- operational expenses (2 years) -1.5 -1.5 -1.5
- initial investment in JV -2.7 -2.7 -2.7
- final net assets of SFP (at 51%) 6.9 7.7 9.1
- final net assets of Pan Aust (100%) 1.1 1.1 1.1
Net Assets - at end of Project 9.1 9.8 11.3
Net Assets per Share at end of Project $0.21 $0.23 $0.26
Shares on Issue (Max subscription) - m 43.6 43.6 43.6
Source: PIR calculations based on CUAAP assumptions PIR comments "A project manager will be appointed by the SFP for the day to day operations of the project. An existing loan with Harbin Bank is expected to be extended by an additional A$1.3m and a further A$2.9m loan will also be required. Both these loans have not yet been finalised as this is dependent on the success of the capital raising.  The total funds of around A$5.1m will allow the construction to progress up to what is known as 'sea level', which includes the basement and foundations. Once sea level has been reached, the project manager will be able to settle on any pre sales of the property. As pre sales are settled, funds will become available for the continued construction of the shopping centre, thereby allowing the construction to be self-funding thereafter. Expenses of the Offer are $0.075m plus up to $0.15m in shares for advisors to the placement. With a number of approvals already received, and the fast construction periods in China, it is estimated that the full construction will take about 18 months." Download LCG prospectus Download LCG Presentation Download PIR Report LCG has a strategy to identify projects with similar economic returns with its JV partners in the Zigong and other parts of Sichuan to give it a long term and growing revenue stream.  Contact Barry Dawes  +61 2 9222 9111  bdawes@psec.com.au Contact LCG Chairman Brett Manning +61 8 9277 2600 bmanning@lcg.properties Paradigm Securities would receive fees for funds raised under this prospectus. Paradigm Securities and its associates hold shares in DFM and LCG (through Ferrowest).

Dongfang Modern Agriculture Holding Group: Prospectus

by Alison Sammes
Dongfang Modern Agriculture Capital Raising Dongfang Modern Agricultural Holding Group is a leading grower/harvester of citrus and camellia tree produce in the Ganzhou City region of Jiangxi Province in the PRC. The Company has lodged a prospectus and is seeking an ASX listing and capital raising of up to A$50m to assist with its growth aspirations. The Company is one of the leading agricultural produce companies in the PRC and has had a strong revenue and earnings growth history since it entered the citrus plantation industry in 2009. With production of over 200,000tpa of produce made up of Tangerines (mandarin oranges), Pomelos and Navel Oranges and also the fast growing Camellia fruit (seeds and nuts)  Dongfang Modern generates annual sales revenue of over A$170m( RMB870m) and with high operating margins of over 40% expects to report earnings of A$75m in calendar 2015. The company has and has had no debt and has grown its asset base from H$77m ( about US$10m) to A$216m (US$162m) in six years.  Revenues have grown from nothing to around A$170m (est Calendar 2105) over this period. Agricultural food production in China is exempt from personal and corporate income tax and VAT to increase output after the movement of over 60m farmers from farmlands to the cities. Dongfang Modern is offering up to 50 million shares at an Issue Price of $1.00 per Share to raise up to $50 million with a Minimum Subscription of $39 million. The replacement DFM prospectus can be downloaded here Please down load the DFM Application form here, if you have already read the prospectus and just need an application form DFM IPO presentation Final 5 July 2015 DFM term sheet (PDM) finalParadigm 7 July 2015 DONGFANG MODERN AGRICULTURE HOLDING GROUP LIMITED ACN 604 659 270 Lead Manager: Paradigm Securities Pty Ltd (ACN 159 611 061)

Investment Opportunity in Indian Stock Market

by Alison Sammes
  • New IPO for ASX listed Indian Fund
  • Ideal opportunity to participate in historic changes in India
  • Run by top ranked Indian Fund manager
  • ~65% in large and mid cap stocks with 35% in high yield fixed income
  • 3.5-4.0% initial gross yield
  • Long term capital growth potential
  • Peaking of global bond markets underscores the pickup in growth
  • IPO closing 19 June 2015 (apologies for late notice but only just found this)
  • Minimum raising of A$35m already achieved
  • 1:1 A$1.00 18 month Loyalty Option vesting 6 months after listing
The main theme of Dawes Points is to review investment opportunities in the Resources Sector and to participate in the current Asian based economic boom that should run for the next 15-20 years. The focus of most of the commentary over the past two years has been that the market place has been too pessimistic on the outlook and the entire Resource Sector has been beaten down and that remarkable value exists in ASX listed resources stocks. Dawes Points has highlighted the strength of the US market, the growing support of the German Index, the recovery in many European indices and the strong performances of the Asian markets, China, India, Singapore, Sth Korea, Philippines and Taiwan. Major political changes in China, Japan and now India have established the base for set up substantial economic changes that are far reaching and historic. China is reforming in so many ways with the rise of a 1,400m strong consumer class that the world cannot readily conceive.  Rising incomes and a massive RMB 100,000bn in household savings has begun to drive a surging Shanghai stockmarket.  This consumer led change will ensure economic growth in China is robust and dynamic.  It appears that the property market has already turned and housing inventory is falling. Dawes Points has often shown the strong performances of all the Asian markets but the Indian market began its surge over 20  months ago in 2013 and has led the Asian charge. The election of Nerandra Modi, former Governor of Gujurat State marshalling with 10 years of 10+% economic growth, is laying the base for a modernisation of it 1300m population that should follow China’s remarkable rise.  Of course it will be different and India will be India but the timing is now. However, note that the Modi Bharatiya Janata Party (BJP) Government has achieved the first single party majority in India in 30 years. Naturally Dawes Points would like you to invest in Northern Star, Tribune or Cudeco but this is good diversification on the standards we know  - ASX listed and liquid. To better understand the opportunity in India, it is probably easiest to start with the the Performance of the Shanghai market which is up 150% in the past year but note should be made of three ETFs that have performed well without the SSEC’s exuberance and are up over 50% in the past year but do not appear to be particularly overbought. FT 25 Big stock index China Industrials Index  ETF China Financials  ETF These are not over extended markets in my view. In India the picture is much the same.  Market has surged but is not over extended given the correction of the past few months. The two main indices are the BSE 30 and the NSE 50. The Bombay Stock Exchange Sensex Index And the Nifty Fifty National Stock Exchange Index The India Fund is seeking to raise a minimum of A$35m and a maximum of A$100m at A$1.00 per share and will have a 1:1 loyalty option (only available to shares purchased in the IPO and held to the entitlement date of 6 months after listing) with strike price of A$1.00 and expiry date of 18 months after vesting.

The ASX entity

The fund will have a 1.25% Management Fee and a 15% performance fee over the Benchmark (see attached flyer for details). The fee will be split between the Company administration and the Fund Manager The Company will be administered by Tristar Capital for a 0.75% administration fee and a 0.6% outperform fee The CEO is John Pereira. The Fund will be managed by prominent high performing fund manager Kotak Management (UK) KMUK, which has US$11bn under management and a ten year track record of outperformance, for a 0.50% Management Fee and 0.9% of the outperformance fee Equities 65%  (Only large and mid cap stocks) Fixed Income 35% (Indian Govt binds currently yield ~8%) If nothing else you are encouraged to look at Section 3 (p29) of the Prospectus with its India in Perspective review and especially p35 where a breakdown of the top 20 of the NSE stocks is given and showing the role of Information Technology, Financials and Energy in India. Details are contained in the four attachments
  1. Summary Flyer
  2. Prospectus
  3. India Fund Application Forms
  4. Research Note
Apologies for the late notice but I am travelling this week. If you have any interest can you please advise by email. Applications can be posted to Paradigm Securities GPO Box 5263 Sydney NSW 2000 or emailed with funds transferred to the Paradigm Trust Account. Paradigm Trust Account BSB 082 067 Account Barry Dawes   India Fund Logo

CBG Capital (ASX Code:CBC)

by Alison Sammes

About CBG Capital (ASX Code: CBC)

CBG Capital provides an opportunity to invest in a portfolio of Australian listed shares in companies both within and outside the S&P/ASX200, managed by Ronni Chalmers and the team at CBG Asset Management.

Offer of shares in CBG Capital ASX-listed investment company

Paradigm Securities is focussed on the Resources Sector and whilst the sector has been very difficult for some years Paradigm still considers that an upturn is not too far away. This focus has meant that Paradigm does not usually give advice on general stocks outside the Resources Sector. Paradigm is however, pleased to be able to recommend participation in a new listed investment company that holds a balanced Australian equity portfolio. It is seeking up to A$50m in an Initial Public Offering in a proposed ASX listing. CBG Capital is run by former BT Australia investment manager Ronni Chalmers who set up his own boutique funds management company, CBG Asset Management, in 2001. The company’s two funds have consistently outperformed the ASX 200 accumulation index since inception. In the latest Mercer survey the CBG Australian Equity Fund was the fifth best performing fund out of 95 fund managers. CBG Asset Management was awarded the Sky News Business Golden Calf Award in 2013 for the Best Boutique Australian Equities Manager. CBG Capital is seeking to issue up to 50 million shares at A$1.00 each and will have a 1:1 separately listed attaching A$1.00 two year (Sept 2016) option. The minimum of 16m shares has already been achieved. The fund can have up to 25% outside the ASX 200 and so has been able to select smaller growth stocks that can give additional portfolio performance. The listed fund should replicate the stocks in CBG’s existing funds and should achieve an attractive fully franked dividend yield of 4-5%. The fund offers a stable long term (5-7 years) horizon for capital growth and income within the Australian Share market. The issue closes on 20 November. Attached are links to three documents:-
  1. Description of CBG Capital and its proposed ASX listing fund
  2. The CBG Capital Ltd LIC fund prospectus
  3. An application form to complete and send back to me at Paradigm Securities (bdawes@psec.com.au)
Application monies can be sent by cheque to Boardroom Pty Ltd GPO Box 3993 Sydney NSW 2001 Or Paradigm Securities Pty Ltd GPO Box 5263 Sydney NSW 2000 Applications can also be completed and emailed to me with funds sent electronically to the Paradigm Securities Pty Ltd Trust Account BSB 082 067 A/c 14-201-6796 Please call me if you have any query on this offer. +6 1 2 9222 9111 10 November 2014 Barry Dawes

Head of Resources BSc F AusIMM MSAA MSEG Follow me on Twitter @DawesPoints