Presentation to the Australian Rice Growers’ Conference - link

At around 435m market cap, this food business is not small and upside is limited versus a small cap. But for a business this size with so much scale this is still ignored by the market.

Share structure which was mentioned in the last straw. A major headwind for the share price as holdings of rice growers and maximum holding limits makes it hard for institutions/funds to build a large position. Investors would however benefit from the high dividend instead (now paid twice a year from once a year)

Already aware of the supply crisis around the world ex-Australia

Ricegrowers global supply/demand network - economies of scale???

Supplying to the heavily drought-affected United States

Potential new markets - UK post brexit.

Supply is no issue for now. With China restricting exports of Japonica rice to the world, could ricegrowers capitalise on this lucrative export market?

Brand awareness with Poh:

Issues: Water and sustainability

Issues: Still a price-taker but with drought happening in other markets at a time when rice consumption continues to grow maybe an inflection point will be reached soon...

Finally there is the question of what happens when the above average east coast rainfall disappears and we are in drought? The 50% reduction in water usage might not mean a thing unless there is a secure supply of water even during drought times.

[Held]

Rice production around the world affected by drought /low rainfall

South East Asia

USA

Europe

Fortunately there has been above average rainfall around Australia which would be a positive for rice production here and sales for Ricegrowers.

I think this view is still under the radar.

My only negative is the confusing share structure of Ricegrowers in which rice farmers must hold at least 3000 shares and are free to exit their position when they leave the industry which doesn't help the price.

[Held]

EPS up 123%

One bit of good news in my real portfolio. Held this through the negative drawdowns after the Covid peak.

Overall can't fault this report from Ricegrowers. Having said that I think not many people understand how co-ops work (I admit I don't understand too) and hence the discount (470m market cap)

Strangely the price of rice has fallen back to USD 16123 CWT but the share price has kept rallying up till this report.

Having said that, this looks like a very diversified food business now and not just a primary producer business/co-op (whatever you want to call it)

Cash is still positive ($24m v $39m) despite the most recent acquisition of Pryde feeds.

[held]