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Thread: Comvita - CVT

  1. #1051
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    Quote Originally Posted by iceman View Post
    I find it interesting that we have all these discussions on CVT thread while a little noticed and much better run company in the same (sort of) industry headquarters just down the road is steadily increasing all the right numbers. Go SEK
    Seeka looks OK but the Chinese aren't gonna pay a premium for Chinese gooseberries when they can just grow it themselves.

    It's kinda like the difference between gold and silver, where both have similar properties but one of them has that "X" factor which makes it worth so much more. This is why this stock is so much more exciting, because it's so hard to value this unique X factor. Some people think it's snake oil and a fad, where as others regard it as a miracle food and will pay hundreds of dollars per kg. What ever the case it's rare, and highly sort after.

    Basically, the market is trying to work out the correct premium to add (if any). My opinion is that it should be significant given it's dominant market position, long trading history, it's vertical integration, and strong global brand awareness.

    More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over.

    I'm sure you'll do well with Seeka. CVT is definitely more of a riskier stock, and not for value investors.
    Last edited by Ogg; Yesterday at 02:24 AM.

  2. #1052
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    Ogg "More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over." BUT NZ goosberries have a unique competitive advantage.Its all in the breeding,grower contracts(even in China) & branding. Chjnese may try to copy but can only pick off low hanging fruit

  3. #1053
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    Quote Originally Posted by Ogg View Post
    Seeka looks OK but the Chinese aren't gonna pay a premium for Chinese gooseberries when they can just grow it themselves.

    It's kinda like the difference between gold and silver, where both have similar properties but one of them has that "X" factor which makes it worth so much more. This is why this stock is so much more exciting, because it's so hard to value this unique X factor. Some people think it's snake oil and a fad, where as others regard it as a miracle food and will pay hundreds of dollars per kg. What ever the case it's rare, and highly sort after.

    Basically, the market is trying to work out the correct premium to add (if any). My opinion is that it should be significant given it's dominant market position, long trading history, it's vertical integration, and strong global brand awareness.

    More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over.

    I'm sure you'll do well with Seeka. CVT is definitely more of a riskier stock, and not for value investors.
    Agree with your last sentence. I know its the wrong thread but Kiwifruit exports to China have grown from $123m in 2014 to over $400m in 2017, so don't agree with your statement that the Chinese can "just grow it themselves" !!
    Wish you well with CVT

  4. #1054
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    Quote Originally Posted by kiora View Post
    Ogg "More importantly, it can't be recreated. The Chinese have a reputation of copying, imitating, ripping off, and circumnavigating other companies. In this situation they have no choice but to make a take over." BUT NZ goosberries have a unique competitive advantage.Its all in the breeding,grower contracts(even in China) & branding. Chjnese may try to copy but can only pick off low hanging fruit
    Quote Originally Posted by iceman View Post
    Agree with your last sentence. I know its the wrong thread but Kiwifruit exports to China have grown from $123m in 2014 to over $400m in 2017, so don't agree with your statement that the Chinese can "just grow it themselves" !!
    Wish you well with CVT
    They do grow it themselves, in fact they grow almost 5 times as much as New Zealand (Wikipedia). It's not even from NZ, it's a native plant from China, just lol. According to this article they have also had "problems" exporting to China too. Even the name Kiwifruit is just a marketing ploy, which they can't use over there so they have to use the brand name Zespri or something.

    I would question the long term outlook. Is the recent ramp up in sales just high end Chinese consumers buying while the market is in it's infancy? Would you be able to compete with the local domestic market there long term? The Chinese will want to protect their industry. It may have been a nice few years but sooner or later the door will close or exports will taper off with increased regulation.

    Look, we're all in the same boat here. Nobody is doubting New Zealand's agriculture industry and it's prime position on the door step to Asia. Everyone is doing well. However, there's a major difference between something that can easily be grown in 'the back of the rice paddy fields' and something that is unquestionable unique. I don't just mean unique, I mean exclusive. For example, you can say that USA has oranges or Ecuador has bananas etc but oranges and bananas grow all over the world so it's not exclusive.

    It's more than just slapping a "branding sticker" on it and saying it's from "clean, green, NZ". That's what Seeka is likely doing and having some limited success. It's still very much similar to what Tegal would do, "slapping a branding sticker" on a chicken and claiming it's gonna export it all over Asia, "yeah right" (Tui billboard).

    Will find out sooner or later just how much the Chinese will pay for Comvita. Anything less than $10 per share is likely going to be rejected by the board as they are well aware of the situation and judging by the last take over attempt they understand the true underlying value offered here.

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