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Wednesday, October 5, 2022

Sino Agro Food Inc. (OTCBB:SIAF) Trading Near its Resistance Levels

Sino Agro Food Inc. (OTCBB:SIAF) recently made a huge move up off its $0.40 base to highs of $1.10 per share on record breaking volume. Since the stock corrected hitting a low of $0.70 before forming a new base in the $0.90 range.

Under debate here is whether SIAF is consolidating before the next leg up or if that was it and the stock will either hold its new support levels or break it and go south.

Historically investors were wary of SIAF as the Company has a history of massive dilution and this is one of the primary reasons SIAF stock never went much over $0.40. The recent $25 million convertible note funding brings significant investor confidence that SIAF has turned the corner and will no longer need to issue equity.

As well the stock has been spurred on by a recent partnership with Tesco that will help it to expand sales and consolidate business.

Sino Agro Food Inc(OTCBB:SIAF) is an agriculture technology and natural food holding company with principal operations in the People’s Republic of China. The Company acquires and maintains equity stakes in a cohesive portfolio of companies that SIAF forms according to its core mission to produce, distribute, market and sell natural, sustainable protein food and produce, primarily seafood and cattle, to the rapidly growing middle class in China.
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SIAF provides financial oversight and strategic direction for each company, and for the interoperation between companies. The Company owns or licenses patents, proprietary methods, and other intellectual properties in its areas of expertise. SIAF provides consulting and services to joint venture partners to construct and operate food businesses, primarily producing wholesale fish and cattle. Further joint ventures market and distribute the wholesale products as part of an overall “farm to table” concept and business strategy.

SIAF largest and most scalable businesses are indoor and semi-enclosed open dam aquaculture production. This includes a variety of seafood, prawns, and eel, and also a production of over 60 cuts of beef and lamb.

Recently SIAF entered into two contracts with Tesco Plc (OTCPK:TSCDF) to become both a supplier and an in-store butcher shop concessionaire of beef and lamb. Sino Agro will provide its own brand of product lines, as well as design for its in-store butcher shops. Supply of beef and lamb will start in major Shanghai Tesco stores, and branded outlets will expand in phases. This will provide for a most cost effective and cash flow effective manner to integrate the distribution and retail levels of SIAF business models.

Tesco is one of the largest grocery and merchandise retail chains in the world, operating almost 7,000 stores with revenue of US$120 billion. On May 29, 2014, Tesco formed a joint venture with China Resources Enterprise, Ltd. (“CRE”), operators of the “Vanguard” retail chain, to create the largest multi-format retailer in China.

Conclusion: SIAF has made a big move up in recent months as the Company takes significant steps to assure investors that the dilution that has historically kept this stock so low is the a thing of the past and the Company is on to a new leaf. The recent $25 million convertible note funding brings significant investor confidence as does the recent partnership with Tesco.

SIAF currently trades at a market valuation of around $175 million which represents as significant jump from its recent valuation of well under $100 million before the stock took off. Investor sentiment is positive that SIAF who currently boasts $40 million a quarter in sales and net income averaging over $20 million a quarter can finally retain a valuation closer to its true value which must be significantly more than sales 1 year out!

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Disclosure: we hold no position in SIAF either long or short and we have not been compensated for this article.

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