Oceanus

Oceanus: More insights in grp during AGM. Chairman announced the following strategies going forward: 1) Strategy for recovery: Oceanus bought some 180m juvenile abalones at the start of this yr. In Oct, it would be time to sell a portion of these for cashflow while the rest would be caged and grown further. Oceanus is also importing good brood stocks and target to breed 400m abalones. Some of these will be sold next Jan/Feb for cashflow. Progressively, the others will also be sold while only about 10m will be kept and grown till 2015 when they are big. Based on current live prices in China, the 10m could fetch Rmb 1b according to grp’s chairman. Grp claims above strategy means 2013, 2014 grp will improve. In 2015, the result will be very good. 2) Looking for new CEO: The new CEO need not be mainland Chinese but he must understand farming, said the chairman. (That sounded like a hint that a Singaporean would be the next CEO.) 3) Restaurant business, processing plant: Grp have cut out the restaurant business. It's not core and it's not making money. 4) As for the processing plant, the investment is done. The key is to focus on building abalone population to do live sale. When the abalones are big, grp can use the processing plant. Now plants have been scaled down drastically to reduce operating costs. Overall, we like to caution against the Co., as it has time and again disappointed investors, especially via its recent high mortality rates of abalones and massive write-downs. Grp’s accounting stock-take on abalones via sample-sizes does raise some concerns on proper governance as well.