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Jiutian Chemical
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JiutianC
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crystal
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21-May-2008 11:16
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Today see a rise of +20 for Juitian, do you think it is the begining of an upward movement or just window dressing. Kindly give some comments. Many thanks. |
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tchoonw
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21-May-2008 11:06
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Today confirmed can short Jiutian at 15c...the target at 8c still hold! |
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Nostradamus
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20-May-2008 23:08
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Price action is within the lower bollinger band, indicating that the downtrend will continue. Bollinger bands are also tight, signalling a fast trend downwards after breaking $0.125 support. Long term support is around $0.08. Full TA here. |
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Addison
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19-May-2008 13:03
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DBS rates it at "FullyValued" at 0.11, while UOB rates it at "Sel" at 0.09. In my opinion, it will probable touches or underpasses this quoted price before any rebound. Good luck to us. |
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zhuge_liang
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15-May-2008 23:41
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$0.125 is a crucial level. If the support breaks, it will fall further. Looks likely to me. DBS report on Jiutian. The new 120k tpa DMF plant ("Jiuyang") incurred an operating loss of RMB8.3m as a result of incredibly low utilization rate of 9%. Demand from PU customers was lackluster in 1Q08, resulting in a sharp decline in DMF prices to RMB5200/ton, from almost RMB6000/ton in 4Q07. This eroded profits of DMF producers, especially those who rely on external methanol supply. While methanol prices shot up to almost RMB3500/ton, DMF prices rebounded to above RMB6000/ton since Apr with the resumption of operation of PU plants. This should improve the DMF-Methanol spread from RMB2300/ton in 1Q08 to RMB2500-RMB3000/ton this quarter. Coupled with higher sales of methylamine that yield better margins, earnings should pick up sequentially this quarter. However, we expect DMF-Methanol spread to remain weak at RMB2800/ton this year and dip further to RMB2500/ton next year due to excess supply and a weakening global economy. We lowered our utilization assumption for Jiuyang to 30%-50% from 60%-80% for FY08-09F. We also lowered utilization for the new methanol plant ("Jiulong") to 70%, from 90% for '09. Consequently, FY08-09F earnings are cut by 55%-70%. We are applying a lower multiple of 9x-blended FY08/09F PE (vs 10x previously) to reflect the reduced visibility on earnings. Accordingly, our fair value is reduced to $0.11. We believe the stock is fairly priced at current levels given the cloudy outlook and lack of catalyst in the near term. Downgrade to Fully Valued. |
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lucky168
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15-May-2008 22:53
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which other stocks can I switch to after dumping Jiutian? |
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tchoonw
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15-May-2008 10:33
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Jiutian is only worth around 5c...still can short now to make some profits! |
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zhuge_liang
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15-May-2008 00:42
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UOB AM still holding 93.3m Jiutian shares after their sales. If they dump them, the price will continue its fall. |
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sthinvest
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14-May-2008 21:45
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Thanks Nostradamus for the latest. It seems like down trend is on the card in view of the many unfavorable reports. Market conditions have been unkind to the company suffering a double bogey with the snow storm and unforseen high methanol prices in Q4-07 and Q1-08... In the current fear climate, will have to wait it out for the storm to calm down before accumulating more to average. Still heavily vested for the long term. Ps: The last time i checked, methanol prices has came down significantly from its peak in Q1 while DMF has started to trend up since April/ May . Still keeping the faith. |
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Nostradamus
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14-May-2008 14:46
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Jiutian Chemical, one of the largest dimethylformamide1 producers in China, is still falling. 1Dimethylformamide is a niche fine chemical used in a wide range of industries. A major use of DMF is as a feedstock in the production of polyurethane which is in turn used in the manufacture of consumer goods like sofa, leather products and shoes, as well as a feedstock in the production for pharmaceutical and agrochemical products. DMF is also a universal industrial solvent that is used in electronics, acrylic fibre, and pharmaceutical products. CIMB report below. 1Q08 net profit of Rmb5.6m forms just 6% of our fullyear forecast and 4% of consensus. The shortfall came from lower-than-expected utilisation rates and ASPs, and higher-than-expected methanol prices. Sales rose 20% yoy on incremental volume from the new Jiuyang DMF plant, but gross profits declined 36% yoy as higher methanol costs ate into profits. 1Q08 gross margin declined 20% pts yoy and 1% pt qoq to 23%. Jiuyang plant still in the red. The 120,000-tonne p.a. DMF plant lost Rmb4.3m at the gross level and Rmb8.3m at the net level in 1Q08, its 2nd consecutive quarter of losses. In 1Q08, Jiuyang's average utilisation rate was just 9.2%, lower than the 15-20% we were expecting. The variance was due to a 1-month shutdown after snow storms hit China and subsequent shutdowns when the DMF- methanol price dynamics was unfavourable. Management has reassured investors that its priority in 2Q08 would be to turn around Jiuyang (from the Rmb8m loss in 1Q08) to breakeven by 2H08. Its likely strategy would be: 1) intermittent shutdowns to mitigate losses when the DMF/methylamine-methanol price dynamics is unfavourable; and 2) a shift in the sales mix towards methylamine and less DMF. As such, we have scaled back our utilisation rate assumptions for Jiuyang. Cautious on methylamine strength. Methylamine prices jumped 17% from Rmb6,400/tonne in 1Q08 to about Rmb7,500/tonne. Management attributed this to higher production costs, which producers were able to pass on to customers. Jiutian has been building up its methylamine customer base in recent months, and is banking on stronger methylamine sales to offset its DMF losses. We, however, remain cautious on methylamine prices, given their historical range of Rmb6,400-6,500/tonne, even in 4Q07- 1Q08 when methanol prices peaked. We also note that Jiuyang's methylamine business appears less profitable than our expectations, as management estimates a breakeven methylamine price of Rmb6,700-6,800/tonne, vs. our estimate of Rmb6,000/tonne previously, based on methanol prices of Rmb3,000/tonne. Maintain Underperform; cutting FY08-10 EPS estimates by 49-59% to account for lower utilisation rates at Jiuyang (from 40-94% to 20-70%) and lower methylamine gross margins. Accordingly, our target price has been cut from $0.12 to $0.09, still based on 1x CY08 P/BV. |
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tchoonw
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14-May-2008 08:52
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Just short as much as you can. This is a scam from analyst. They downgrade to hell as much as possible and buy cheaply. After accumulating enough, they upgrade the bugger to heaven and sell you at a good profit! It's always big fish makan small fishes here :) |
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zhuge_liang
Supreme |
14-May-2008 00:30
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DBS has lowered its tp for Jiutian fr 0.31 to 0.11. If you think this is bad, then wait till you see CIMB's tp. CIMB said 1Q08 net profit of Rmb5.6m (-72% yoy) forms just 6% of our fullyear forecast and 4% of consensus. Our target price has been cut from $0.12 to $0.09. Maintain Underperform. Looks like downtrend has not ended. I give up on this counter. |
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starnite
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10-May-2008 13:55
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Someone just dump 1.8mil share at $0.14 minutes before closing... Does it spell anything? :( |
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sthinvest
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09-May-2008 13:03
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Agree with your thoughts. Seems to have very good support at $0.14 to $0.145 and a good result should change mkt sentiment drastically. Vested long term on this potential cash cow when all their DMF and methanol plants are up and running. Imagine the raw material coal converting to cash! |
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zhuge_liang
Supreme |
09-May-2008 12:11
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Pine Agritech just would not fall, even after CIMB's revised downwards its tp to $0.12. By now, the worst case scenario and Jiutian's weak results would have been factored in already. |
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Hulumas
Supreme |
09-May-2008 10:49
Yells: "INVEST but not TRADE please!" |
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How low can it goes? How high can it reaches? are all the market's sentiment dependant. |
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sthinvest
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09-May-2008 09:53
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Never be too sure. Verdict will be out soon. |
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tchoonw
Veteran |
09-May-2008 07:37
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Jiutian is a gone case company...probably wait till it drop below 10c, Sunvic might just offer 12c to take over! There are a lot of open short positions for Jiutian, hence it'll never go above 20c forever! |
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zhuge_liang
Supreme |
09-May-2008 00:11
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Both Jiutian and Pine Agritech has tp of $0.12. Both contrast their performance. While Jiutian is languishing near its $0.125 low, Pine had doubled from its $0.13 low. Jiutian has severely underperformed! |
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zhuge_liang
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09-May-2008 00:04
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Jiutian will report results on Mon, 12/5. |
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