what not buying 阜豐 546?

I really don't think 阜豐 next year profit would be as good as everyone thought......I sometime before the SNB report to study this stock and try to identify the reason for this year massive raised in profit.

1) The stock is highly effected by coal and corn price, and the Corn Price are set to raise in 2010 (the company benefit from a very low corn price last year)

*1% Increase in Crop price, 0.5% increase in gross margin
(can’t remember what I saw this source, but some article said this is what happen to this company)

2) Although they can get cheap coal from their supplier, the price is still raising very fast compare to 2009. (the company website did indicated the Coal price is raising in 2010) and my prediction is it will keep raising!

2) The sale price of 味精 has actually drop more than 20% from thh2009 high (Q4) (again, check the company website)

3) The company themselves admitted the margin for 味精 last year is (exceptional) and it's likely to drop to 25% Gross for this year.

4) 黃原膠 price is also predicted to drop in 2010 (Due to the competition around the globe).

5) And contrast to SNB, I believe the 味精 production capacity will retain at 540,000 tonnes in 2010. It will only raised to more than 700,000 tonnes in 2011, not 2010 during the 2010 financial year (differ to what SNB said)
I have done a rough Estimate for 2010 based on the above case

And my humble calculation is that the EPS would be lower than this year, at around 0.20- 0.31.

And based on the last 5 yrs P/E, this price is already too high…….

I could be totally wrong but I am happy to eat my words to to be proven that I am wrong, After all, Stock market is irrational (or I am)!