Not much to add here, as I’ve commented on Hanfeng Evergreen a few times recently, but I continued averaging into a position today — I bought more shares at US$8.09, right around the current fair price in Toronto.
I still like the future, and the company’s execution. Chinese small caps continue to get beaten up, and there are plenty of reasons to be cautious about China in general, but that doesn’t mean that there won’t be some huge success stories, particularly among small cap names that are able to carve out a business niche even as they grow rapidly. The growth and market position of the company are very compelling for me.
Among it’s “peers” Hanfeng has been hit worse than the names like Potash, Migao, and Agrium that are a bit more focused on conventional (non slow-release) fertiilzers (theyr’e all down in recent months, but Hanfeng is down more than the rest), but with China’s needs for slow-release fertilizer going forward that seems short-sighted to me. Time will tell, of course.
If this continues, I may end up being the best contrarian indicator available — Gumshoe says he likes a stock, down she goes!