PGW - PGG Wrightson

[couta1]

Bargin hunters stepping in today, one of the stars of the bourse.

[Balance]

Rural sector ….some making zillions while others fighting to survive

But as long as they keep buying from PGW no worries …..and if they need to sell there’s always the real estate division

https://www.rnz.co.nz/news/country/4...tor-industries

PGW is certainly reaping the benefits of supplying the farming sector although the sector is not as profitable as some would think.

Farmer friend tells me that his input costs (fertiliser, diesel, wages, parts, freight, etc) have gone through the roof. On top of that, the government has been imposing all sort of regulations and costs as well and they have had issues with the supply chain as well - input & output.

So net net, his farm is only marginally more profitable than before. Still, better than going backwards.

[Snoopy]

The reason I am predicting a 'low ball' takeover offer is that I have observed over the years, that the Chinese prefer to work in east/west partnerships. Indeed for a western company setting itself up in China, it was a legal requirement to have a Chinese partner in whatever 'joint venture' proposal was on the table. In NZ we have the example of Silver Fern Farms, 50% controlled by the Chinese. The Chinese are strong equity partner in Synlait. There is the counter example of Westland dairy which is 100% Chinese owned. But Westland is a relatively small player in the dairy market. If the Chinese had wanted to buy out Fonterra, then that level of deal would have been blocked IMO. PGW is probably the biggest rural supplies company in NZ. To see it entirely in Chinese hands I think would be politically unpalatable and unpalatable to many of its farmer customers. So the way out for Agria (if they want out) is a low ball bid by BAIC. It could be that BAIC is buying shares above $2,75 (if they are, this is not confirmed) to establish a share price floor somewhere around $3. That would allow a $2.75 full bid to fail (except for the acquisition of the Agria stake). Thus we would get a joint Chinese/NZ controlled company going forwards. This might be the end game that BAIC are after.

So much for the low ball takeover offer I predicted in 2020! But in a surprise announcement to the market today, the Chinese government have reduced their holding over the period 26th February 2021 to 26th July 2022, from 12.928% of shares held down to 11.924% of shares held as of today.

http://nzx-prod-s7fsd7f98s.s3-websit...867/375259.pdf

$5.924m / 1.317m = $4.50 (average price at which shares were sold)


Old Conclusion
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Judging by the average share sale price (wrong number $5.21), it looks like most share sales were when the price peaked in January/February 2022. Not sure what to make of this, except to say "smart trading by BCA New Continent Agri Holding".

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The $4.50 average sell down price changes things. In February 2021 the share price hit a local peak of around $3.50. It did not surpass that price level again until August 2021. So if the average share price of shares sold was $4.50, the bulk of those sales must have occurred after August 2021. There was a large volume spike of sales at $4.50 in what looks like late October. So if that $4.50 average sales price is accurate, most of those share sales must have occurred between August 2021 and April 2022. If that is true, then the volume sales picture shows that there was not an excessive dump of shares on any one day. Those shares look to have dribbled onto the market in a spread out and planned way. Make no mistake the Chinese government has made money on these sold shares. But not as much as I had hinted at in my previous erroneous conclusion.

As is well known I am not a trader so don't usually follow the movement in price of sold shares like this. But if my observations are accurate, what does this mean?

SNOOPY

[Snow Leopard]

A couple of corrections for you:
The number of shares are 9M8 (12.928%) down to 9M0 (11.924%)
and
They sold 1.317M shares for $5M924 or approx $4.50 average.

Disc: a major part of the portfolio.

[Snoopy]

A couple of corrections for you:
The number of shares are 9M8 (12.928%) down to 9M0 (11.924%)
and
They sold 1.317M shares for $5M924 or approx $4.50 average.

Disc: a major part of the portfolio.

Whoops yes now corrected, thank you. No doubt you are enjoying the divvies as I am. I follow farming but I don't follow Chinese politics. Do you have a theory as to what might be going on behind the scenes SL?

SNOOPY

discl: holder

[Snow Leopard]

....Do you have a theory as to what might be going on behind the scenes SL?....

Here is a nice picture of a Snow Leopard to distract you from the fact that I have no idea at all:

SNL-C.jpg
Top 10 facts about Snow Leopards

[sb9]

Predictions for FY divvy? 18c or 20c..

[Davexl]

Predictions for FY divvy? 18c or 20c..

Final or Full Year ?

[sb9]

Final or Full Year ?

Final for this FY. Last year final was 16c

[Davexl]

Final for this FY. Last year final was 16c

Thanks sb9, was thinking combined divs for a second, bit low !