preview
Q1/11 Earnings Preview
When will it report: Tuesday, November 9th after markets close. A conference call is scheduled the following day at 10:00am ET to discuss the results. To participate dial 1-416-340-9432 or 1-877-440-9795.
Webcast Presentation Link: https://www.gowebcasting.com/2002
• What to expect: We continue to watch sales of Carbon Power closely. As a new product in China, we would consider any QoQ increase above 20% a positive indicator that the product is successfully piercing the Chinese market (we are forecasting 100,000 tonnes sold in the quarter, but would be content with anything above ~86,000 tonnes). We are also forecasting sales volume of 139,000 tonnes of SCR products, a 13% increase YoY at an average price of RMB 2,531/tonne (C$410/tonne). Gross margin per tonne of SCR product is expected to improve into the C$70/tonne range as rising fertilizer prices and farmer incomes (due to higher crop prices) often mean farmers are less sensitive to higher fertilizer costs, specifically the premium HF charges for its value added product. Our Q1/11 adj. EPS estimate for the quarter is C
.15 on revenues of C$88.7mln, a 49% and 61% YoY, respectively. This compares to Q1/10 EPS of C
.10 and Q4/10 earnings of C
.15/share (see table below). We are also looking forward to updates on the ramp up of the Indonesia JV facility and progression of the Beidahuang agreements. • What consensus says: Consensus is expecting Hanfeng to report Q1/11 EPS of
.13 on revenues of C$83.7mln. Consensus target price is currently C$8.00/share.