Huge Acquisition Related News Today Could Propel NASDAQ Low Float Stock (PLIN) Through The Roof
Goldman Small Cap Research Report
Analyst Provides $6.70 Price Target - Huge Upside Potential
In case you missed it, most recent stock profile surged approximately 161% in a 2 day span adding another crowned champ to my March list.
Currently sharing several similarities with your last champ, I want you to turn your immediate focus to stock profile China Xiangtai Food Co., Ltd. (PLIN).
The company has several potential catalysts going for its stock that you need to be aware of. Here they are including today's major news...
#1 PLIN Potential Catalyst - Today's HUGE Acquisition News
China Xiangtai Food Co., Ltd. Enters into MOU to Acquire Controlling Interest in Chongqing Ji Mao Cang Feed Co., Ltd.
CHONGQING, China, March 26, 2020 /PRNewswire/ -- China Xiangtai Food Co. Ltd. (NASDAQ: PLIN) (the "Company" or the "PLIN"), an emerging growth company primarily engaged in pork processing in China, today announced that the Company, through its subsidiary Chongqing Jinghuangtai Enterprise Management Consulting Co., Ltd., entered into a non-binding Memorandum of Understanding (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.
Pursuant to the MOU signed on March 23, 2020, PLIN proposed to acquire 51% controlling interest of JMC, one of the leading feed sales companies in southwest China. JMC has more than 200 customers in farm industry and nearly 100 customers in feed production industry. In 2019, JMC sold more than 200,000 tons of soybean meal, exceeding RMB 500Mn (approximately $70K USD) in sales. Given the Company's revenue of fiscal year 2019 was $102.5Mn USD, PLIN is expected to increase 70% of revenue through this acquisition.
Read The Full Article Here.
#2 PLIN Potential Catalyst - $6.70 Analyst Price Target
Within the past week, Rob Goldman from Goldman Small Cap Research, released a complete research report on the company while tagging the stock with a $6.70 target.
From Wednesday's close of $XXX, this gives PLIN upwards of approximately XXX% potential upside.
Here are some of the most important report highlights:
- Pork is a major food staple in China and PLIN is a leading provider. PLIN benefits from key industry trends toward more profitable frozen and processed pork and by-products and sales through supermarkets and restaurants instead of farmer’s markets.
- Our thesis, forecasts, and target price reflect what we believe to be a potentially highly favorable impact on the Company and shareholders should management pursue a roll up of competitors and complementary firms. While the core organic business model remains robust on its own, we believe a roll up could dramatically change the positioning and valuation.
- With an estimated 60M tons to be purchased this year from and through a fragmented list of players, PLIN has an opportunity to expand market share via new products, channels, markets, or by acquisition. PLIN has an advantage as a popular and respected in-country brand that offers domestic and foreign product and its unique status as a U.S.-listed public company.
- Our model assumes top-line, margin and valuation expansion in conjunction with M&A. We forecast sales will grow from $102M in FY19 to $202M in FY21, with EPS jumping from $0.21 to $0.67.
- 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. Our $6.70 price target represents a 10x P/E versus the 26x Hormel multiple, and is a reasonable metric given top-line growth and margin expansion, in our roll up scenario. Even if management does not elect to pursue a roll up, we believe these shares can return to the $2.60 level (10x FY21E EPS) during the second half of 2020, a 66% gain from current prices.
#3 PLIN Potential Catalyst - The Stock's Low Float
Like many of my recent major champs, this stock is also of the low float variety.
According to Yahoo Finance, PLIN has a float of approximately 8.74Mn shares.
This means that when the slightest bit of good news comes out regarding a company like PLIN, there are so few shares available for trading that a stock can see extreme volatility/price spiking in the short-term.
Remember, it was only yesterday that we watched another low float stock make a near triple-digit intraday run. That was only one of the handful of low float stocks we've seen explode this month.
#4 PLIN Potential Catalyst - Launched Online Ordering Service
China Xiangtai Food Co., Ltd. Launches Online Order Service to Satisfy Residents' Food Demand
CHONGQING, China, Feb. 27, 2020 /PRNewswire/ -- China Xiangtai Food Co. Ltd. (NASDAQ: PLIN) (the "Company" or the "PLIN"), an emerging growth company primarily engaged in pork processing in China, today announced that the Company has launched online ordering service to communities in Chongqing, China where residents have limited outdoor access to food purchase due to the implemented [...].
On February 1, 2020, the Company, through its primary operating subsidiary Chongqing Penglin Food Co., Ltd, entered into a business cooperation agreement (the "Agreement") with Chongqing Casin Community Comprehensive Service Co., Ltd., a wholly-owned subsidiary of Casin Smart Service Group Co., Ltd. ("CSSG"), a leading property management service provider in China. Pursuant to the Agreement, Company's products can be ordered online through CSSG's e-commerce platform and get delivered to homes within five apartment complexes managed by CSSG in Chongqing, consists of approximately 70,000 residents.
Ms. Zeshu Dai, Chairwoman and CEO of China Xiangtai Food, commented, "We are excited to work with CSSG to launch a online order and delivery service. It is a good start for us to serve five communities managed by CSSG and benefit over 70,000 residents. We hope to leverage the platform and deliver our products to more communities and help more people in the [...]."
Read The Full Article Here.
#5 PLIN Potential Catalyst - New Business Collaboration Agreement
China Xiangtai Food Co., Ltd. Entered into Business Collaboration Agreement for up to RMB 35Mn to Expand Operation Scale and Diversify Distribution Channels
CHONGQING, China, Feb. 25, 2020 /PRNewswire/ -- China Xiangtai Food Co. Ltd. (NASDAQ: PLIN) (the "Company" or the "PLIN"), an emerging growth company primarily engaged in pork processing in China, today announced that the Company, through its primary operating subsidiary Chongqing Penglin Food Co., Ltd, entered into a business collaboration agreement (the "Agreement") with Chongqing Good Helper Commerce Co., Ltd. ("CGHC"), a financing company backed by the local government in Chongqing, China for a business collaboration for up to RMB 35Mn on the expansion of operation scale and diversification of distribution channels.
Pursuant to the Agreement, both parties agreed to collaborate on the purchasing, packaging, sales of pork, beef and lamb, as well as handle staffing, renting and managing additional facilities. CGHC has agreed to provide the Company with financing up of to RMB 35Mn with an annual interest rate of 10% in considerations of equal pro*fit and expense sharing.
Both parties are aware of the spread of 2019 [...] and are focused on being detailed orientated by providing continued transparency, integrity, and keeping its pork clean, price fair and stable, and timely delivery of quality fresh pork and other freshly processed meat products to supermarkets in Chongqing every day.
Ms. Zeshu Dai, Chairwoman and CEO of China Xiangtai Food, commented, "We appreciate CGHC's trust in PLIN, and are pleased to have reached this agreement. We need to increase our sale volume for premium quality product with diversified distribution channels to meet the strong domestic pork demand. This collaboration would offer us the opportunity to expand to new retail channels and access to considerable working capital for its business needs."
Read The Full Article Here.
More About The Company (PLIN)
From the company website:
Incorporated in Cayman Island on January 23, 2018, China Xiangtai Food Co., Ltd. is primarily a pork processing company that has operations across key sections of the industry value chain, including slaughtering, packing, distribution, and wholesale of a variety of fresh pork meat and parts.
We offer two main series of our products, namely the processed series and the fresh series.
We purchase live hogs through distributors who purchase hogs from well-known big hog farms located in different cities in southern China. We use an automated standard modern production line to slaughter the hogs and pack the fresh pork and byproducts. We deliver the fresh pork to local distributors who then resell the fresh pork to smaller wholesalers and retail vendors. 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.
We also purchase fresh pork, beef, lamb, chicken, duck, and rabbit meat from local farmers. We process fresh pork, beef, lamb, chicken, duck, and rabbit meat into processed products. We sell fresh pork and processed meat products to both wholesale and retail markets. Main products from the fresh series include fresh pork and byproducts, beef, lamb, chicken, duck and rabbit meat.
Maintaining the highest industry standards for food safety, product quality and sustainability is one of our core values. We have food circulation permit and national industrial production certificate. Our operations comply with international standards and we have obtained a series of certifications, such as ISO9001, ISO22000 and HACCP. We have strict quality control systems in each segment of our value chain, from production through sales and distribution.
We have more than 200 employees. In our slaughterhouse and processing facility, we have a standardized and automatic production line for hog slaughtering and meat packing. We also have meat processing rooms and standardized freezers to process and store processed meat product. Our slaughtering plant in Linshui Industrial Park, Sichuan Province covers an area of 27,000 square meters. Our processing factory in Fuling, Chongqing, covering an area of 8,000 square meters. We have 6 registered trademarks in PRC.
We are committed to provide consumers with high-quality, nutritious and tasty products through our portfolio of trusted and well-known brands and to driving consumption trends, while setting a high industry standard in product quality and food safety.