China Tracker - Details for Gushan Environmental Energy (GU)


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 WARNING: Form 15 filed with the SEC!
 Gushan Environmental Energy
 Business Outlook

Under the terms of the Amended Merger Agreement, which was approved by the Company's shareholders at an extraordinary general meeting of shareholders held on October 15, 2012, each ordinary share of the Company issued and outstanding immediately prior to the effective time of the merger [...] has been cancelled in exchange for the right to receive US$0.165 per Share and each American depositary share (ADS), each representing 10 Shares, represents the right to receive US$1.65 per ADS (less US$0.05 per ADS cancellation fees), in each case, in cash without interest and net of any applicable withholding taxes. The Company also announced today that it requested that trading of its ADSs on the New York Stock Exchange be suspended.

(Source: PR Newswire, 2012-10-17)

Inflationary pressures in China continue to be high, which continues to adversely affect the Company's raw material input costs, which are increasing at a rate higher than the rate of increase in the Company's average biodiesel selling prices. As a result, the production and sale of biodiesel in the current business environment is not profitable for the Company. In order to minimize the financial burden on the Company as a whole, the Company will evaluate the appropriateness of continuing, commencing or resuming production of biodiesel at each of its biodiesel plants and will continue, commence or resume production only if the biodiesel plant is able to operate on a positive cash flow basis. The Company does not expect each of its biodiesel plants to be able to operate, achieve and maintain positive cash flows given the current trend of raw material input costs increasing at a higher rate than average biodiesel selling prices. While the Company continues with its efforts to control its raw material input costs, it is expected that the production and sales volume of biodiesel will continue to be low in the near term until positive results are achieved from the Company's efforts in controlling raw material input costs.

Meanwhile, the Company's recycled copper products business continued to contribute positively to the Company's overall financial performance and this trend is expected to continue. The Company believes that the recently completed acquisition of Xiangbei will also provide additional positive contribution. The Company continues to explore the possibility of acquiring more businesses in the recycled copper products industry that will complement its existing businesses and strengthen its overall recycled copper products business portfolio.

(Source: PR Newswire, 2011-08-23)

The Company's raw material input costs have risen significantly since the end of the first quarter 2011. As such, Gushan will continue its efforts to control its raw material input costs. As mentioned in the previous quarter's earnings results announcement, Gushan has been negotiating with the local government of Mianyang to be appointed as the exclusive collector and processor of used cooking oil in the regions under its jurisdiction. Such negotiations are still in progress and the Company will report on any material developments as and when they occur. Also, the Company continues to explore the possibility of developing an internal feedstock production capability within China. The process of searching for land in various regions of China that is suitable for cost-effective production of raw material feedstock such as castor bean and jatropha is currently ongoing. However, no assurance can be given by the Company that any of these efforts will be successful.

As a result of increasingly high raw material input costs, Gushan is currently evaluating the profitability of each of its biodiesel plant. In order to minimize the financial burden on the Company as a whole, Gushan will evaluate the appropriateness of continuing, commencing or resuming production of biodiesel at each of its biodiesel plants only if the biodiesel plant is able to operate on a positive cash flow basis. With the exception of Shanghai Gushan, the resumption of biodiesel production, which is still subject to the satisfactory resolution of a previously disclosed legal dispute with a construction contractor, Gushan expects to continue, commence or resume production of biodiesel at all of its plants as soon as possible so long as they are able to operate on a positive cash flow basis.

(Source: PR Newswire, 2011-05-26)

During the fourth quarter of 2010, the Company's average biodiesel selling prices continued to improve over the previous quarter as demand for diesel in China continued its recovery in conjunction with the economic recovery in China and globally. Going forward, the Company expects this trend to continue so long as the global economy and China's economy continue to recover. Although the Company's raw materials input costs decreased slightly during the quarter, inflationary pressures in China are still high and as such Gushan will continue its efforts to control its raw material input costs. ... The Company is currently in the process of searching for land in various regions of China that is suitable for cost-effective production of raw material feedstock such as castor bean and jatropha. However, no assurance can be given by the Company that any of these efforts will be successful.

The Company remains confident in the prospects of its newly acquired subsidiary, Jin Xin, and plans to increase Jin Xin's production capacities and will also explore the possibility of acquiring businesses related to Jin Xin that will strengthen and diversify its business portfolio. Subject to Gushan's evaluation of the profitability of operations in light of high raw material input costs, Gushan expects to resume production of biodiesel at Fujian Gushan, and to commence production at Chongqing Gushan and Hunan Gushan in the second quarter of 2011. In addition, the Company expects both Sichuan Gushan and Shanghai Gushan to resume production of biodiesel in the second quarter of 2011 pending the relocation of the Company's Sichuan production facilities and subject to the favorable resolution of a previously disclosed legal dispute with a construction contractor of Shanghai Gushan respectively. As such, the Company's total annual biodiesel production capacity is expected to reach 490,000 tons (147 million gallons) by the end of the second quarter of 2011.

(Source: PR Newswire, 2011-03-30)

Gushan Environmental Energy today announced that it intends to resume production at Fujian Gushan, Chongqing Gushan, and Hunan Gushan, in the second quarter of 2011 following a clarification by the Ministry of Finance of the People's Republic of China, or the Ministry of Finance, and the State Administration of Taxation of the People's Republic of China, or the SAT, that pure biodiesel made from waste animal fat or vegetable oil is exempt from consumption tax in China. Gushan expects that biodiesel produced at all of its production facilities will satisfy the conditions set forth by Caishui 118 and so qualify for the exemption. As such, the Company is preparing to resume production of biodiesel at Fujian Gushan and to commence biodiesel production at Hunan Gushan and Chongqing Gushan in the second quarter of 2011.

In addition, the Company expects both Sichuan Gushan and Shanghai Gushan, to resume production in the second quarter of 2011 pending the relocation of the Company's Sichuan production facilities and the resolution of a previously disclosed legal dispute with a construction contractor of Shanghai Gushan, respectively. As previously disclosed, the Company recorded a provision for liability under the consumption tax of approximately RMB114 million as of September 30, 2010. The Company expects to reverse this provision in the fourth quarter of 2010. However, until such results are reviewed and finalized, the Company cannot confirm that this reversal will be made.

(Source: PR Newswire, 2011-01-18)

While Gushan is pleased with the favorable outcome of the consumption tax issue, the high and rising cost of feedstock is adversely affecting the Company's profitability in its biodiesel business. Consequently, Gushan is currently negotiating with the local government of Mianyang to be appointed as the exclusive collector and processor of used cooking oil in the regions under its jurisdiction. The Company plans to pursue similar appointments from the local governments of other regions in which it operates. Additionally, due to continuous problems with the quality of the castor bean produced caused, in part, by the climate in Indonesia, Gushan plans to terminate its castor bean supply contract with its Indonesian supplier. To better control costs, the Company is exploring the possibility of developing an internal feedstock production capability within China. The Company believes that by developing an internal feedstock production capability, it may be able to produce feedstock at a lower cost than could be obtained from third-party suppliers. The Company can give no assurance that any of these efforts will be successful.

(Source: PR Newswire, 2011-01-18)

During the third quarter of 2010, the Company's average biodiesel selling prices continued to improve over the previous quarter as demand for diesel in China continued its slow recovery in conjunction with the economic recovery in China and globally. Going forward, the Company expects this trend to continue so long as the global economy and China's economy continue to recover. However, the Company's raw materials input costs rose significantly during the quarter principally due to general inflation in China, which has adversely affected the Company's profit margins. The Company will continue its efforts in diversifying its source of raw materials by entering into long-term fixed-price/cost-plus supply contracts to combat such rise in raw material costs.

As of this date, the Company's situation with regards to the consumption tax issue remains unchanged from the previous quarter, as the Company has not received clarification from the PRC SAT on the issue. Currently, production at Fujian Gushan remains suspended and the Company has not commenced production at the Chongqing and Hunan plants pending clarification of the consumption tax issue. During the third quarter, production at Shanghai Gushan was temporarily suspended due to the Shanghai municipal government's control measures relating to dangerous chemicals during the Expo 2010, and production at Sichuan Gushan was also temporarily suspended due to the relocation of its production lines to its new plant in Qin Dong Bei Industrial Park. Currently only Beijing Gushan and Hebei Gushan, whose combined annual biodiesel production capacity amounted to 130,000 tons, or 28.9% of Gushan's total annual biodiesel production capacity, remain in operation. Shanghai Gushan is expected to resume production pending resolution of the ongoing lawsuit with a construction contractor and Sichuan Gushan is expected to resume production after the completion of the relocation of its plant in the first quarter of 2011. To date, other than Fujian Gushan and Sichuan Gushan, none of the Company's production plants have received consumption tax assessments, however, no assurance can be given that Gushan will not receive such assessments for its other plants. If at any time such request is received, Gushan will evaluate the appropriateness of a suspension of production at additional plants on a case-by-case basis. The Company is continuing its efforts to expand alternative sales channels, including sales to the chemical industry, and to develop new products for the chemical industry to seek to mitigate the potential adverse impact from the consumption tax issue. However, no assurance can be given that these efforts will be successful.

The new 50,000-ton plant in Sichuan will not be completed until the end of the fourth quarter of this year. The relocation of the Sichuan plant, together with the new plant, when completed, will result in a combined annual biodiesel production capacity of 100,000 tons for Sichuan Gushan. After the consolidation of facilities in the new plant in Sichuan, Gushan's annual biodiesel production capacity will reach 490,000 tons. However, Gushan expects that the recovery of diesel demand and hence biodiesel selling prices will be gradual. These conditions, together with the uncertainty of the consumption tax issue, are expected to continue to adversely affect Gushan's profitability and cash flow generation in the short term. As such, Gushan is continuing its efforts in seeking opportunities to invest in businesses in the energy and/or the environmental sector. The Company's recent acquisition of 67% of Jin Xin is a first step and is expected to contribute positively to the overall financial performance of Gushan. If this new business proves to be successful, Gushan will seek to further expand the business by increasing production capacities or acquiring related businesses.

(Source: PR Newswire, 2010-11-29)

Gushan Environmental Energy announced today that the ratio for its American Depositary Shares representing ordinary shares of the Company will change from one 1 ADS representing 2 Shares to 1 ADS representing 10 Shares (1:5 reverse split), effective as of November 12, 2010.

(Source: PR Newswire, 2010-10-27)

Gushan announced today that its board of directors has approved a share repurchase program effective October 7, 2010. Under the terms of the approved program, the Company may repurchase up to US$5 million worth of its issued and outstanding American Depositary Shares through its subsidiary, Gushan Holdings Limited, from time to time in open market at prevailing market prices, in negotiated transactions off the market, in block trades, pursuant to a 10b5-1 plan or otherwise in compliance with applicable laws.

(Source: PR Newswire, 2010-10-08)

The second quarter continued to be a challenging one for Gushan principally due to the low production and sales volume of biodiesel as a result of the uncertainty over the consumption tax issue, which at this date remains unresolved. Currently, production at Fujian Gushan remains suspended and the Company has not commenced production at the Chongqing and Hunan plants pending clarification of the consumption tax issue. Production at Shanghai Gushan is temporarily suspended due to the Shanghai municipal government's control measures relating to dangerous chemicals during the Expo 2010, and production at Sichuan Gushan is also temporarily suspended due to the relocation of its production lines to its new plant in Qin Dong Bei Industrial Park.

In order to more conservatively manage the Company's cash flow, the completion of the new 50,000-ton plant in Sichuan will be delayed until the fourth quarter of this year. The relocation of the Sichuan plant, together with the new plant, when completed, will result in a combined annual biodiesel production capacity of 100,000 tons for Sichuan Gushan.

(Source: PR Newswire, 2010-08-18)

Gushan is still on track to reach 500,000 tons of biodiesel production capacity by the first half of 2010 after the completion of the additional plant in Sichuan, which will add an additional annual production capacity of 50,000 tons. In order to operate our Sichuan production facilities more efficiently, the Company is considering relocating its existing 60,000 ton production facilities to the site where the additional 50,000 ton plant will be located. Although such relocation may result in suspending the existing 60,000 ton production facilities for three to four months and its business and operating results for 2010 may be adversely affected, Gushan believes that such relocation will be beneficial to the Company in the long term. Gushan expects that the recovery of diesel demand and hence biodiesel selling prices will continue to be slow, and that these conditions, together with the uncertainty of the consumption tax issue, are expected to continue to adversely affect Gushan's profitability and cash flow generation in the short term. As such, Gushan is continuing its efforts in seeking opportunities to invest in businesses in the energy and/or environmental sector.

(Source: PR Newswire, 2010-05-18)

Gushan [...] today announced that due to recent heightened enforcement of control measures [...] in preparation for the hosting of the Expo 2010 from May 1, 2010 to October 31, 2010, the Company has and will temporarily suspend operations at its Shanghai plant from April 15, 2010 to October 31, 2010. The Control Measures require that, among others, the production of poisonous chemicals be suspended (unless produced pursuant to a special permit), the transportation of poisonous chemicals be escorted by security companies, all vehicles carrying hazardous chemicals possess special permits to operate within the Shanghai area, and all vehicles carrying flammable chemicals, even with a special permit, be prohibited from operating from 10:00 a.m. to 4:00 p.m. during the period from June 15, 2010 to October 15, 2010. As a result of such Control Measures, Gushan believes that its ability to deliver its biodiesel and biodiesel by-products to its customers and the ability of its suppliers to deliver raw materials to the Shanghai plant have been and will be materially and adversely affected. As a result of this suspension, based on current circumstances, Gushan expects that the total 2010 biodiesel production volume of its Shanghai plant will be reduced significantly, which it anticipates will reduce its overall production levels for the year.

(Source: PR Newswire, 2010-04-22)
GU
Clean Energy

COVERAGE SUSPENDED OR TERMINATED
 
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Current Price:  $1.65
F10k Day (2007-12-19): -96.61%$48.65
2009 Close: -75.00%$6.60
2010 Close: -70.28%$5.55
2011 Close: 41.02%$1.17
High (2012-02-27): -2.95%$1.70
Low (2012-05-18): 103.70%$0.81
Exchange: PRIVATE
Market Capitalization: 27.40 mill
Total Shares: 16.60 mill
Float: n/a
Avg Volume: 84.80 k
Short Interest: 108.20 k
Short Ratio: 1.03%1.3 d
Last Quarter: 2010-09-30
Revenue (MRQ): 35.44 mill
Net Income (MRQ): -6.06 mill
Op. Cash Flow (MRQ): -8.44 mill
all financial data provided without warranty