Excerpts from SAC Capital report

China Shenshan Orchard (SGX: BKV)

• China Shenshan cultivates and sells kiwifruits in China. Its output accounts for 0.1% of China’s total kiwifruit production of ~3m tonnes in 2019.
• It develops varieties in-house and owns 6 premium kiwifruit variety rights, holding 83 trademarks and 56 patents.
• China Shenshan (previously Dukang Distillers Holdings Ltd) was listed in July 2021, when baijiu operations were sold back to major shareholder Wang Peng, in return for the kiwifruit operations at a valuation of RMB1.1bn.
• No cash or shares were issued. A new management team came on board

It is Non Rated by SAC Capital but share price has gone up 54% YTD.

About 40% of planted areas are mature acreage

Shenshan operates 9 plantations in Chibi City, Hubei Province, the PRC, with total planted area of 241 hectares. Of these, about 40% are mature acreage (between 5 to 10 years). The remainder are immature plants of below 4 years. Harvesting of kiwifruits begins after 4 years of cultivation, and harvest takes place every Sep/Oct. It produced 3,769 tonnes in FY21, at a yield of 40.3 tonnes/mature hectare. The products are sold in China via wholesalers, distributors and ecommerce retailers.

About 34.6% of total 696 hectares have been planted

The land use rights expire in 2058 and 2059. This includes a 42-hectare plot of land which it does not yet have valid rights of use, which accounts for ~6% of total acreage and 11-13% of production volume. Shenshan also holds the rights to 65,000 sqm of industrial land which houses the office and packing facilities.

To raise production output

Shenshan jointly develops farmland with land owners, or engages farmers to provide contract farming. For instance, it have a non-binding 30-year MOU with Chibi Green Industry Development Investment Co., Ltd to develop a 333-hectare land. Chibi Green will provide RMB150m investment while Shenshan will develop and operate the plantation.   You can find the full report here