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Stocks Y / Yongye International


Subject:  Interesting info in 2nd qtr report Date:  8/9/2012  12:41 PM
Author:  Swede46 Number:  219 of 259

I found it interesting that they stated, as of this year, they are recognizing revenue on sales to distributors with 6 months terms when payment is received, not when product is shipped.

This should have been explained in a press release earlier. If it was, I missed it.

That explains why the numbers in the 1st qtr report seemed out of whack. KitCat had a field day finding "problems" with the company using the 1st qtr numbers.

Anyway, they confirmed they were still on track to report 110 to 120 million in earnings for the full year. That's 2.20 to 2.40 a share, although I'm not sure if that was GAAP numbers or "adjusted numbers" Ths share price doesn't seem to reflect that the report was favorable. If the majority of todays trading is by retail investors, I wonder if the delay in revenue recognition accounting change was noticed by some.

Maybe one of you posters can clarify something. If they didn't recognize the sale at the time of shipment, are they still showing the shipped goods as their inventory until payment is received? With double entry book keeping, it would appear that they are ignoring the shipments or it has to be showing up as a credit and a debit somewhere on the statement.

In any case, it looke like a long haul before we see significant share price appreciation. Eventually the law of large numbers will result in a slowing of growth and they will be in a position for a share buyback, or preferably a nice dividend. They stated in the CC that it won't happen in the near future. That means they are still expecting significant sales growth over the next couple of years. We could see eps of over 3.00 by then. Barring any unfavorable news before then, I would think earnings would have to drive the price to close to double todays price.

Anyone have any thoughts on todays report and CC?
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