Forum Archive Index - April 2001

["greg" <gregoire@paradise.net.nz>]

Stephen,

I have done my own analysis, and while I agree with many of your points I don't see how you can entertain the idea that the FFS/PA share price was artificially inflated.  As I have already mentioned the share price was trading around 45c during Feb and March last year with the CITIC dispute going to the High Court and wood prices falling.  After recapitalisation this equates to (45+50)/3 = 31.67c.  I have also thought of selling FFS and buying RBC, but I saw the future of RBC as too uncertain.  Some of its biotechnology assets are not sure-fire winners.

 

I draw your attention the Grant Samuel report on the biotech assets sold to RBC.

 

-    Arbogen

-    Trees & Technology

-    Forestadora Tapebicua S.A. (FTSA)

-    Genesis Research and Development

 

RBC will commit $4m per annum to Arbogen, which Grant Samuel calls a ' "virtual company" with only minimal infrastructure, outsourcing its activities whenever possible.'

 

Trees & Technology is a tree improvement business situated in the central North Island.  Their business includes

the research, development, production and sale of tree stocks.

 

FTSA was essentially an investment/study in South America, and while it holds a number of forestry assets, Grant Samuel says "The value of FTSA is driven, in part, by the value of the option to develop a large scale forest based on the Supertree knowledge gained from the FTSA investment."

 

Lastly, there is Genesis of which RBC will hold a 2.95% stake which I would harldy call a sure-fire winner either.

 

These biotech assets are supposedly where RBC is going to generate growth.

I like the look of Trees & Technology, but the other assets seem less certain to provide growth.

 

RBC in my opinion could be a good short term play, with some attractive assets which I bet some players like CITIC would like to get their hands on (esp. Trees & Technology).  But I just don't know enough about the direction of RBC, who's running it and those sorts of things to sell up shop in FFS and buy RBC.

 

Regards,

greg