The Buzz On PLIN Is Growing
PLIN has a recent history of some epic gains. Check out this chart below and you’ll see what I mean.
In early February PLIN skyrocketed over $1 in one day, and then in late February, it did the same thing over two days.
And then in late March, PLIN ran for an unbelievable 200%+ in just a few days.
We think PLIN has the opportunity to deliver similar gains as in the past.
Headquartered in Chongqing, NASDAQ-listed China Xiangtai Food Co., Ltd. (NASDAQ – PLIN) is a leading player in the pork processing industry that has unique, vertically integrated operations across key sections of the industry value chain in China, including slaughtering, packing, distribution, and the wholesale of fresh pork meat and parts.
As such, the Company offers processed and fresh products which are primarily sold through farmer’s markets and supermarkets/grocery stores via local distributors, small wholesalers and retail vendors. The main products from the processed series include shredded meat, sliced meat, meat stuffing, pickled meat, lamb and offal, sausage, bacon, steamed meat, breaded chicken and spicy meat.
Recent Corporate Events
On April 3, 2020, PLIN announced that the Company, through its subsidiary Chongqing Jinghuangtai Enterprise Management Consulting Co., Ltd., entered into a definitive agreement to acquire a 51% controlling interest in Chongqing Ji Mao Cang Feed Co., Ltd. (“JMC”). Founded in 2012, Chongqing Ji Mao Cang Feed Co., Ltd (JMC). is a private enterprise specializing in feed raw material sales and feed formula solutions. JMC has entered strategic alliances with large grain and oil companies such as Sinograin, COFCO, Cargill, Good Ocean, and Louis Dreyfus, and has obtained general distributorship in Chongqing, Sichuan and other places. JMC has more than 200 customers in the farm industry and nearly 100 customers in the feed production industry. In addition to adding an estimated $70M in annualized revenue, including the sale of more than 200,000 tons of soybean meal, the acquisition is expected to help the Company expand its market in Southwest China.
Pursuant to the Agreement, subject to certain milestones to be achieved by JMC, the Company agreed to issue to JMC a total of 2,000,000 shares of the Company’s ordinary share for consideration equal to $7,420,000 over the next two years. Management believes that business and profitability will benefit from this expanded vertical integration of the industry supply chain and network.
The Joint Venture
In late April, PLIN announced that through its primary operating subsidiary Chongqing Penglin Food Co., Ltd, the Company has entered into a joint venture framework agreement with Chongqing Fengjie County Rural Ecological Agriculture Development Co., Ltd. (FEA), a private enterprise specializing in hog breeding business. Pursuant to the ten-year agreement, the Company and FEA have agreed to jointly establish a hog breeding farm, thus enabling the Company to secure its own supply chain.
Management believes that the expansion into the breeding business demonstrates its confidence in the pork market in China. Moreover, the joint venture will enable the Company to control the supply end of its products and proudly offer ‘from farm to supermarket’ service. The company will have the entire integrated product chain, including breeding, producing, butchering, packaging and selling and will have a favorable impact on profit margins. The JV leadership plans to purchase up to 300 breeding hogs by the end of September and PLIN expects to start producing its own pigs in February 2021. Once in full operation, the JV expects to produce 7500 hogs annually, with approximately 100 kg to 150 kg per hog. We believe that the sales from producing hogs would be millions of dollars per year.
Goldman Small Cap Research Issues New Research Update On China Xiangtai Food Co., Ltd
BALTIMORE, MD / ACCESSWIRE / May 6, 2020 / Goldman Small Cap Research, a stock market research firm specializing in the small cap and microcap sectors, announced today that it has released a new research update on China Xiangtai Food Co., Ltd., (PLIN). The Company is a leading pork products and pork processing company in China. This report carries a price target. To view the new research update, along with disclosures and disclaimers, or to download it and the original full report in their entirety, please visit https://bit.ly/3frGSXt.
In the Opportunity Research update, analyst Rob Goldman discusses the potential major financial impact of the Company’s recent acquisition and joint venture on the Company, along with drivers of the Company’s business model, and financial forecasts.
Goldman noted, “Since our initial report in late May, PLIN has not only executed a highly profitable and accretive complementary business acquisition, but closed on a major joint venture which provides the Company with unrivalled positioning through vertical integration. The Company PLIN acquired a 51% controlling interest in Chongqing Ji Mao Cang Feed Co., Ltd.(“JMC”), a private enterprise specializing in feed raw material sales and providing feed formula solutions. The deal enables PLIN to expand the southwest market in China but also adds roughly $70 million, or a 70% in annualized sales.”
“Meanwhile, the recently announced 10-year joint venture with Chongqing Fengjie County Rural Ecological Agriculture Development Co., Ltd. (“FEA”) increases PLIN’s vertical integration by immediately adding hog breeding capabilities,” commented Goldman. “Pork is a major food staple in China and PLIN is a leading provider throughout the food chain.”
“Given the recent events, we have raised our forecasts and our price target is under review for a potential upgrade as well. Plus, it appears additional business development opportunities are in the offing later this year, enabling PLIN to establish a stronghold in this sector. Publicly traded pork companies such as Hormel are near year highs as this category serves as a popular defensive group during these difficult economic and market conditions. As a US-traded pure play on this sector in China, PLIN could follow a similar path,” concluded Goldman.
Xiaohui Wu, the President and Director of China Xiangtai Food, Provides Details and Personal Insights into the Recent News for the Company in a New Interview at SmallCapVoice.com
AUSTIN, Texas, April 30, 2020 (GLOBE NEWSWIRE) — SmallCapVoice.com (“SCV”), Inc. and China Xiangtai Food Co. Ltd. (PLIN) (the “Company” or the “PLIN”), an emerging growth company primarily engaged in pork processing in China, today announced that Mr. Xiaohui Wu, the President and Director of China Xiangtai Food, is featured in a new audio interview at SmallCapVoice.com.
The interview can be heard at: https://www.smallcapvoice.com/interview-china-xiangtai-food-plin/.
Mr. Xiaohui Wu called in to SmallCapVoice.com, Inc. to go over the business model and markets served by his Company. In addition, Mr. Wu provided his personal comments on the recent news and upcoming events for the Company.
In the interview, Mr. Wu expanded on the establishment of the joint venture with Chongqing Fengjie County Rural Ecological Agriculture Development Co., Ltd. (“FEA”) that will allow the further optimization of PLIN’s production capacity while also increasing the quality of its offerings at fair and stable prices. In March, PLIN announced the MOU to acquire 51% controlling interest in Chongqing Ji Mao Cang Feed Co., Ltd.(“JMC”), a private enterprise specializing in feed raw material sales and providing feed formula solutions, to expand the southwest market in China. This is a move where PLIN is expected to increase 70% of revenue through this acquisition on an annualized basis.
Mr. Wu stated, “We could not be happier with how 2020 is progressing for our Company. The recent news highlights our commitment to the vertical integration strategy we have set forth. We want to thank SmallCapVoice.com who allowed us to discuss our developments in greater detail for better investor understanding.”
We think PLIN could make an excellent trade idea over the short term. It’s recent history has shown that big and fast gains are possible. And with its small market cap, low float and recent news catalysts, we think now could be the time for a PLIN breakout.