Sunday 25 May 2014

Analysis of Asian Bamboo 2014

Asian Bamboo a Chinese forest company

Company: Asian Bamboo

Business: A Chinese company registered on the German stock market running via Hong Kong. Main business are sale of bamboo in every form possible meaning as food and wood. They recently left the bamboo fibre business and are currently trying to step into the Chinese property market.

Active: China with some sale of bamboo shots (meaning food) to Japan.

P/E: -0.1 (even the P/E5 is negative!)

Here you can find the previous analysis of Asian Bamboo.

contrarian values of P/E, P/B, ROE as well as dividend

The P/E of Asian Bamboo is negative due to huge losses but the P/B is looking good with 0.2. Still this gives us a no go from Graham. Earnings to sales are negative, ROE is negative. Book to debt that used to be excellent has over night become something similar to European production company with a high amount of debt which is very uncommon for Eastern companies and this also makes it scary. The growth during the last six years has been yearly -5.4% which is really bad. There is no motivated P/E for Asian Bamboo any longer. They have negative growth and are making no profit. I would not even value them to the book value because that has for the last 2 years been decreasing faster than one would think possible if the bookkeeping has been made without fraud. They pay no dividend.

Conclusion: Both Graham and I say no to this company. It might be a turnaround but today they are so far away from that, that one should simply stay away. I also do not appreciate the bookkeeping and the shuffling of onerous contracts as well as FVBA "Fair Valuation of Biological Assets" that has been decreasing quarter for quarter since 2012. It still amazes me how they could have the paid leases as well as FVBA as separated assets in the company which is why I have no confidence at all for the management of Asian Bamboo or Deloitte & Touche any longer. I will follow both of them carefully and will read every annual report were Deloitte & Touche has been involved with slightly more sceptical eyes.

If this analysis is outdated then you can request a new one.

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