Wednesday, February 23, 2011

China Agritech: Getting Wayne Tsou of Carlyle to explain Chinese excellence in nanotechnology production

China Agritech - as has been discussed in previous blogs - manufactures and loads 200 thousand tonnes of dry fertilizer and 13 thousand tonnes of liquid fertilizer using a mere 105 manufacturing staff and just over 6 million dollars in capital.

Obviously these staff are super-strong - as just filling and sewing closed the fertilizer bags and loading the trucks would be problematic.  My previous posts have focused on the Herculean efforts of staff just loading trucks - and only at the Anhui plant.  The rest of the company of course has to be much bigger than that.

It also appears that the manufacturing is considerably more sophisticated than I thought.  For example [China Agritech has] combined innovation and technology in [their] liquid and powder products utilizing nano-honeycomb embedding technology and microelement deep complexing, which makes them more environmentally friendly and effective with a higher content of nutrients than traditional organic fertilizers.

This is pretty sophisticated stuff.  Most companies doing nano-production measure their output in something ranging from thimbles to maybe one or two tonnes.  A123 has - as I have blogged about earlier - had enormous expenses in scaling their manufacturing.

But China Agritech is special.  It does nano-prodution using sophisticated things I do not understand (like nano-honeycomb embedding technology and microelement deep complexing) on the scale of hundreds of thousands of tonnes per annum.  And it does it with minimal staff and just over $6 million in plant and equipment.

Whilst I do not understand how they do it fortunately we have a highly qualified guide.  His name is Wayne Tsou - and he is the managing director of Carlyle Asia Growth Partners.  He is of course entirely suited to the job.  He not only has a Juris Doctor from the Harvard Law School - he is a scientist!   He has a Master of Science from CalTech and a Bachelor from University of Michigan.  Sure he is an electrical engineer by training - but so is my business partner and I don’t hold that against him...

Anyway Wayne Tsou has (at least before the controversy) vouched in the press for China Agritech and their technology.  To quote: "we [Carlyle] are encouraged by the Company's current operations and future outlook. Carlyle always has been active in investing globally in technologies and companies focused on sustainable development. We intend to continue to provide resources and assistance to help China Agritech achieve its strategic goals and expand in the Chinese agricultural market."

Fine words - and as Carlyle is a fine firm I presume those words are backed by actions and that Carlyle really is in there helping China Agritech with its technology.  And that Wayne Tsou can explain what is meant by nano-honeycomb embedding technology and microelement deep complexing.

I only wish he would.

You see I have approached Mr Wayne Tsou to answer questions about Carlyle’s involvement in China Agritech and what contributions Carlyle made to their technology.  Like the other Carlyle participants in this well promoted stock Mr Tsou has been strangely silent.

Nonetheless Carlyle is a reputable firm - and if they say they are dealing with someone who can manufacture nano-products on a vast scale without much in the way of staff or capital equipment it is not for me to disbelieve them.  If they think investing in nano-honeycomb embedding technology and microelement deep complexing makes sense - then I presume they did some due diligence.

But I am an ornery mongrel.  I remain short.



Anonymous said...

stop sniping at these China stocks using your blog already.

if you want to do a Kerrisdale on these China stocks, then do it the Kerrisdale way--put out a proper research report.

stop pussyfooting and get serious already.

---The Shortalista

Anonymous said...

The mere presence of superstar talent like Gene Michael Bennett on the Board of Directors must certainly put Wayne and Anne's minds at ease.

It sure makes me feel better.

Robert in Chicago said...

Hey now -- no picking on any Harvard Law School grad who is not named Jim Cramer.

Anonymous said...

Why are you picking on GMB. He is a great indicator of direction and I have made plenty of money off of his "talents".

Cyrus said...

How on earth are the US regulators allowing this fraud to continue trading on the NASDAQ? From $13 to less than $8 in 6 weeks. Are any regulators in the US awake?

Anonymous said...

Thank you for putting up these blogs. The price reaction gave me nice entry points to this stock. I think CAGC stock is moving higher soon after the audited earnings will be posted...

John Hempton said...


Some of my best friends went to Harvard law school.

I am of course shockingly underqualified. I went to Adelaide and the Ozzie Nashnal Yooni.


Anonymous said...

How do you find out when a stock will start trading again (if it ever does).

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