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China Minzhong: A value opportunity?

Price of Chinese agricultural play have fallen drastically. This stock have been on the watch list of many value investors. Is there a value proposition or is this a value trap?


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Tuesday 10th of January 2012

Now we all know the next catalyst for this stock will be what I wrote on the 21st of December 2011. You guys can enter back in and exit at around 0.935. hahaha...


Wednesday 21st of December 2011


News Update China's government is proposing to eliminate its value-added tax on the distribution of vegetables in its latest effort to shield consumers from higher food prices.

A VAT of 17% applies to enterprises engaged in import-export, production, distribution or retailing activities.

Lifting the VAT on vegetables would lower the cost of production for wholesale retailers. Wholesale companies would benefit from the lower cost, but it's also generally a good policy for the business environment.

Overall agricultural prices pressures have eased in China as the country posted a record grain harvest this year.

Well, it is pork, rather than the veggies that caused the sharp inflation. Prices of pork has jump about 50+% compared to a year ago. We shall see how this news impacts CMZ.


Monday 19th of December 2011

China Minzhong is still falling like a dud and breaking new lows today (0.715). It's a falling knife. You'll get cut and you'll bleed if you attempt to catch this one.

Though many may argue that CMZ has value based on their earnings and has GIC backing, do take note that CMZ does not pay any dividends. So that makes CMZ a pure capital gains play.

Food prices are volatile and fickle. This is not a defensive stock! As the macro-environment gets worse people will get more and more risk averse. They will dump stocks like this one.


Tuesday 20th of December 2011

hi oterenceo, that is one of the reason i didnt get into Minzhong, i am not paid to wait. But we do see a trend whether agriculture will be important in the next few years (provided we get past the Mayan calendar end that is!)


Saturday 17th of December 2011

Hi Drizzt,

I remember Nick was vested in this. Don't know about now. Hope he would comment here. :)


Friday 16th of December 2011

Look at China MinZhong's peers and competitors. Most of them are listed in Hong Kong and are taking a hit from falling food prices.

Food prices are volatile and can be a politcally sensitive subject if it goes too high. The outlook isn't looking too good either. Volatility of food prices also mean lack of clear earnings visibility.

That plus all the bad repute of China Companies' bad corporate governance makes little wonder why this GIC invested company is falling like a dud.

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