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Gold/Mining/Energy : Noble China (NMO) on TSE. Chinese Brewery Stock -- Ignore unavailable to you. Want to Upgrade?

To: Mario Gallant who wrote (241)	5/11/2000 11:02:00 AM
From: Lee Matheson	Read Replies (2) \| Respond to of 248

The decreasing sales is a worry. Earnings/share is up because of improved operating efficiency (over last year), but I don't think these efficiencies can continue to improve. It was interesting to note that of the 45,000 tons (approx) of licenced Pabst Blue Ribbon sold, 2/3 (30,000 tons) were from Zhaoqing Noble Brewery. This, plus the additional inventory beer sold by the Marketing Company, shows the size of the market currently "owned" by licenced Pabst Blue Ribbon beer. The sales volume has been decreasing, and I don't see anything in here to indicate it will increase. Noble has a 30-year exclusive license to brew and distribute Pabst Blue Ribbon throughout China, commencing November, 2003, BUT since Noble already has somewhere between 2/3 and 3/5 of that market, we are not looking at a heck of a lot more beer being licenced in 2003 by Noble. I am a little worried by the specific mention of the words "sales by the four breweries licensed to produce Pabst Blue Ribbon in China". Does that mean there are breweries that are able to get away with selling Pabst Blue Ribbon beer that is NOT licenced? I am worried that Noble only received $2.7 million of the $10.8 million dividend from Zhaoqing Noble Brewery, with the rest to be paid in installments during the year. I would not be surprised to see Zhaonqing come up with a reason why they can't pay the entire dividend owed to Noble. Business in China can be very difficult. Money owing is very difficult to collect. I saw no mention of discontinued operations, ... does that mean Noble have been able to severe all ties with the other breweries with no additional expense? And what label beer are these other written-off breweries producing? Presumeably they are not selling competing licenced Pabst Blue Ribbon (nor unlicenced/illegal Pabst Blue Ribbon beer)?? The only really positive thing I saw in the report was Noble reporting it hopes to report shortly on progress of the assistance of George Taylor in helping Noble decide its ongoing strategic direction. Hopefully some good news will come out of this. Overall, I tend to be a little cynical about some of the above, so please excuse me if it is colouring my analysis. As I type this, Noble is trading at $2.65/share, up from the $2.30/share that it closed at yesterday. The market is a better measure of a company than the comments of anyone like myself, so it is good to see the share price up.