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Houston, we have liftoff....
Actually no surprise given the relative illiquid history of this stock that there has been very little response to the Q.
The Q2 report is out. They made $0.009/share for the quarter and $0.020/share for the first six months. That compares to $0.000/share for Q2 in 2006 and $0.016/share for the first six months of 2006. So EPS grew on a quarterly basis and on a YTD basis!
Now they are only one report behind.
Mike
Any sign of growth for the future quarters will really make this look inexpensive. I'm surprised the filing didn't result in a bump on the bid. Stealing some at .15 would be worthwhile at this point. This is a small position for me at roughly 1% of capital. I generally will hold larger positions in the 10-15% range sprinkled with riskier long shots like GENX.
Next Q for GENX
The next Q for GENX should be coming soon. I think they will catch up by the end of February.
The one I am really looking forward to is Q1 2008. What's a few months wait!
BG
GENX reported their Q1'07 results on 12/31/07. They made $0.011/share. IMO they are undervalued at $0.29/share. More reports are coming soon per a message from DigiTech which is reposted below. The iBox is out of date but I probably will wait until the next two reports are out before updating it since the reports should be coming soon.
Mike
-----------
Posted by: DigiTech
In reply to: None Date:12/31/2007 5:06:35 PM
Post #of 91221
GENX. Better late than never
The company just published the 10Q for Q1 2007, Next 2 quarters will be published by Feb 08.
Remember that the big bounce in GENX revenue and profit will be in Q1 2008 when the new factory comes on line with 5 to 10 X the production.
Happy new year.
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5624635&Type=HTML
Happy Anniversary... My 1 year holding period passed yesterday. At the bid that's 50%. Quite a haircut from this summer.
I'm still in GENX and waiting for filings.
Mike
Lots of silence on this stock. I've got some very low cost basis shares in the teens. Anyone have news on the 10q's?
GENX - 10K was published today....
They made $0.035/share for 2006. Those are nice earnings for a company trading at $0.25/share.
Right now I don't have time for further analysis as I am on vacation with the family. I'll try to look more in the evening.
Mike
quietly upward.....BRIG
Ok, who just bought 20000 shares?
I need to add you to my list.
BG
Thanks for your comments. I am aware of the issue and there is not much we can do but trust the CEO. I seem to have a good relationship with the company and I do no see any sign that they are trying to screw anybody. All of the issues have been due to lack of attention to the details of running a public company. They are really running a private one with some public investors. Since we are all interested about an exit strategy it is a problem. However if they succeed in their plan of multiplying the company size by 10 then success will cover a lot of sins.
Concerning the use of funds. The money was loaned to companies in the Golden Group. All of them (I think) are owned by Mr.Song. A bit incestus but that's China for you. The 6% is actually better that what a bank would give them. My problem is that the interest is added to the loan and not really paid.
The good news is that the funds where used to build the new factory and put GENX in a position to get the production increased 10X. If they do they could even write the loans off and we would still be OK.
This is a very risky investment but I think it will pay off in a big way.
I am trying to go back to Tianjin but I am not sure when I will be able to. I am in Europe in June and my next possible trip is to Shanghai is in July for a trade show. If I do not make July then I will be there in September.
They invited me to come back so it is a good sign.
Good luck.
BG
Digi, I'm wondering about the concern regarding the ownership structure as far as a couple things: one- the PRC doesn't allow foreign ownership right now in TZBD, correct? So theoretically the CEO could walk away with investor money and legally we couldn't take action against him IMO. Not that it would help him to do so of course since he owns so many shares.
However, he's getting to borrow the $ out of cash and invest it while paying the compay 6%. So if he takes a bunch of $ (as he has been doing with available cash from what I can tell) and uses it to invest and he makes 30% return on the $, GENX only sees 6% on that and all the risk is on GENX because of the lack of legal ownership by foreign entities and majority stake CEO has correct? If he is investing the $ in higher risk instruments and LOSES it all or in some part and decides he doesn't want to pay back the loan, he could just set up a vote with a majority of shares that he's not accountable to pay back the loan. And we'd have no say or legal entitlement as far as I can tell because of the PRC laws and his majority ownership. I don't mind throwing a couple pennies at this one but just wanted to throw a little dose of caution. Especially with the CEO owning such a large portion of shares (what he says goes) and coupled with his apparent activity of using the cash to use for himself (he isn't reporting how he is using the $ from what I see in the financials. I'd be curious what he's doing with that $). Good luck! Hope the earnings for 2008 work out and this can become more legitimate with time but for now I'm a bit cautious based on the lack of foreign ownership rights for TZBD and the CEO's majority position and use of cash. All IMO only, just trying to put it out there for debate. I have some shares (not much though). Good luck!
GENX update (repost from VMC Board)
Reporting is not a high priority for them. Not that I don't tell them that it should be quite often. So much I can do.
Not sure when we will get it but I can tell you that they are working on it. They have a hard time parting with their money to pay the accountants. My expectation is that they will catch up soon but no date.
The good news is that sales are going very well apparently. They have a large amount of new customers and the dental business is increasing.
The other good news is that the new building is on schedule.I received a rendering, it looks impressive. The shell of the building was completed when I visited them last time. I will post the picture as soon as I figure out how.
Production will come on line in October and the expectation is still to increase production by 5 to 10X in Q1 2008. They claim they have the sales for the expanded production. This could mean 5 to 8c earnings for Q1 or Q2 2008. Not bad for a 16c stock.
Patience will be rewarded on this one. Warning, you need a lot of it but it is the nicest speculative stock I know of.
Remember that VMC'er have 30% of the float.
BG
no idea. but they started amending (1QSB/A) the first nine months of 2006 on may 4th
Does anyone know when GENX will file year end results and/or what the status and timing of the company moving to the OTC might be? Thanks.
Cool. Last trade was at $0.20! Volume today so far is 28,500. The bid/ask is currently $0.15 X $0.20.
Mike
Share count
1,123,000 from 9 of us.
Please let me know if you did not yet send me a mail with your share count.
Also let me know if I can talk on your behalf.
BG
Thanks for the link. I have 20,000 shares and I have a friend who also have 20,000 shares.
Keep us posted Digi with GENX info.
Stan
GENX count
Just to add more weight to my discussions could you PM me the number of shares you each own.
At present we have around 1.1 m shares as a group or %34 of the float.
BG
English web site
MikeS found the old web site at archive.com
http://www.genexpharm.com/" target="_blank">http://web.archive.org/web/20060103073206/http://www.genexpharm.com/
I am sending an email to GENX with a set of recommendations. One of them is to simply update the old english version and to attache it to the Chinese one.
Another one is a PR spelling out strategy, loan, Production, etc.
BG
I mean the english website.
I read digi post again and I saw that they don't have the english website... yet...
Stan
Anyone know GENX website address?
TIA
Stan
great report Digi...thanks for the hard work....BRIG
Digi. GENX. I don't normally buy .PK stocks but I picked up 20,000 shares at .165 today after reading Digi post plus reviewing the last 10K and the last 10Q very briefly. I'm sold on Digi's research result. that 5x or 10x potential increase in production is very compelling story. and often seeing is believing (that you have gone there and see it for yourself)
I will read more and find out why they went to PK at the first place (because I remember following GENX when it was still .OB)
Digi thanks for the update (also for the November visit recap).
Stan
PS: wow, the volume from GENX today comes from Digi post IMO.
Digi, LOL I carry a very small gun these days so I have to 'gamble' in small sizes. But I'll hopefully be upgrading soon:) Ya my trade size is a bit shameful! Let's hope things pan out. GENX sure has a wild spread! Can't imagine what this would do if it came out with big #s... Maybe do something like AYSI (tripled on earnings release). IF the #s turn out the way they seem to be saying they will, you'll probably get your run. I would think they'd be buying up shares left and right if they thought prospects were that good. I'll be patient and see what reality brings. Thanx for all the helpful info. Hope you were able to enjoy the meeting and whole Asia trip! Sounds like it was fun... I might head to Viet Nam this summer and huket Thailand but simply for personal reasons (family in Phuket and wife's family in Viet Nam). Good luck!
Littlefish, You are such a gambler!
With a forward PE (my calculation) of below 1 it's a really risky bet. LOL
Again, this is China. The new wild west.
BG
I picked up a few more shares today.
Mike
I bought a whopping 5,000 shares at $0.165 LOL (remember, I'm littlefish). And put in an order for 7500 more at $0.12 to support the bid. Guess we'll see what the future brings. Thanx for the report DigiTech :)...
Great report! Thanks for your efforts. I added a link in the iBox.
Mike
Report on GENX's visit. (VMC repost)
On the 17th I flew from Korea to Tianjin. Tianjin is a very large city of 14 M located next to Beijing. They will have several events of the Olympics in that city. Many biotech companies are located in Tianjin.
At the airport I was met by 2 young ladies from the Golden Group. One of them was the assistant to Mr. Song the Chairman of GG and owner of 72% of GENX shares. The Golden Group is a conglomerate of several companies owned by Mr. Song and his son. Total workforce is 1500.
After lunch we went to visit the new GENX factory. I was met there by the GM, the Golden Group, the operation manager and the CFO of GENX. Unfortunately I do not have any photos since my camera was stolen the following week. The building is very large. I estimated around 300,000 sq ft with room to expand. It is located in an economic zone of Tianjin with many foreign companies. The shell of the building is completed and I counted around 50 to 75 workers on a Saturday!
I was a bit chocked at the size of the building. 50% of the building will be for GENX. The outside will be completed in 3 month with production starting in Q4. Full production will be possible in Q1 2008. When I asked what production level they expected I really taken aback. They expect to be able to increase production from 5 times 10 times the present production. They also expect that the production cost will be tremendously reduced due to the volume and new equipment. My immediate question was: “Can you sale the increased production?” the answer: “absolutely yes”
My internal calculator went to work right away:
$700K (Q run rate) X by 5 X by 4Q = $11.2 M revenue
$ 0.01 (Q profit per share) X by 5 X by 4 Q = $ 0.20 per share
I kept it as a straight line and did not include cost reduction just to be conservative.
Not bad for a 12 to 15 c stock !!!!!!!! You should try the numbers with 10 X production.
After that we went to the Golden Group factory. This is a very large place located close by. They house several of the Biotech companies of the Group as well as the Chemical division. The site is not exactly modern. It is and old Chemical factory China style. Meaning, forget about safety. The Biotech building looked more recent. The size of the land is around 100 to 200 acres.
The conference room was very very large (sorry no photo) On the walls they had photos of Mr. song with the Chairman of China Hu Jintao during his visit of the plan. Hu Jintao was seating at the same place I was (Too bad I did not have my VMC T shirt) . Mr Song is well connected.
The discussion covered many different subjects. I will give you the reader’s digest version of it because it was very painful at some points due to the translation.
Yes they now have a new WEB site. www.RBX-BMP.com. It is in Chinese only since they do not sale outside of China.
I asked if they will have an info page in English for stockholders. They told me that they are negotiating with a PR firm. I did mention that this could be done in a couple of hours!
They will be filling their 10 K on time and yes Q4 will be better than Q3.
Q3 was impacted by a big squeeze on pricing control by the Government. Several competitors did not survive. GENX did survive and increased their market share. The plant expansion will enable them to reduce the cost and maintain their profitability at the same time.
I could not get a very good answer about the tax liability due to late filling in 2004 and 2005. I think it is because the auditors are handling it and that the number is not significant.
Now for the infamous loans.
The loans have been made to several companies that are part of the group. There are no warrants attached as I previously believed. I made my point very strongly that this is not a good idea. They should have an arms length relationship between companies in the group. Their point was that it is the way business is done in China. The loans were used to finance the building expansion GENX is part of. Without the loans GENX would not have been able to expand production and marketing reach and be able to share resources with the other companies. It is true that GENX uses a lot of the Group’s resources.
I would not buy this in the US or Europe but this is China and I have seen the same thing done in several other companies.
However if GENX grows 5 or 10 X by 2008 who cares!
I asked again if they can really sale the forecasted output of the plant and the answer was very positive. The market is supplying only a small portion of the need. The problem has always been the cost. With lower cost the market will absorb the supply. This would mean that the revenue multiplier would be impacted but price sensitivity is only around 20 to 30%.
Their expansion to the dental market is also on track. 10 hospitals are now testing the product. This market could be larger than the bone injuries market and has a potential for Export. We discussed the export aspect. They would need to go the licensing way since they would no be able to resolve the regulatory issues themselves.
We had also a very long discussion about the stock market, investments in new venture etc. I told them some of the steps they have to take starting with moving out of .PK. and establishing practices that are in line with western expectations of public companies behavior. I urged them to do some PR about the company status and I will help them do that. I have a lot of work to do there but I will get there. BTW thanks to everybody that sent some private and public posts about .OB procedures.
Overall a good visit. If they execute the plan this could be an easy 5 or 10 baggers but this is China so who knows!
By keeping on top of them at least we have a better chance.
They invited me to come back in a couple of month. I guess they did not mind a shareholder asking questions.
BG
has these days like this.....we watch.....BRIG
So far the volume today of 63,600 shares is the third largest volume day since 5/24/2006.
Mike
nibbled a few more shares today.....BRIG
It is now back down to $0.13 and 126,500 shares have traded so far. Interesting action.
Mike
I looked....see no news......nice action......BRIG
40K shares traded already today after days of silence. The last trade was at $0.19. There isn't any news near as I can tell. I'm liking it!
Mike
kinda wild looking it trades so thin....BRIG
As a few of you from the VMC board know, I have taken a position in GENX. I think it has the potential to be a huge multi-bagger but does have a few risks. My DD is listed in the iBox.
Mike
I will get back to you on that PK listing.
Great job on the IBOX.
One thing you may want to mention is the ownership. 72% one guy!
BG
I'm not sure why they haven't come off the pinks and on to the OTC. They are up to date on their filings. I'm not sure what there is left for them to do. That is something I would like to investigate but I haven't had time yet.
Mike
any idea when they come off the pinks?....BRIG
The EPS for the most recent quarter and nine months are $0.010 and $0.26 respectively. They started paying taxes this quarter. Income before taxes on a nine month basis is virtually the same. Income before taxes is slightly down in the most recent quarter.
GENEX PHARMACEUTICAL, INC. AND SUBSIDIARY
CONSDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts expressed in US dollars, except number of shares)
(Unaudited)
For the three months periods ended September 30, For the nine months periods ended September 30,
2006 2005 2006 2005
Sales $620,357 $715,643 $1,759,191 $1,664,577
Cost of goods sold (73,946) (65,443) (183,267) (165,199)
Gross profit 546,411 650,200 1,575,924 1,499,378
Operating expenses
Selling expenses (135,792) (119,559) (459,483) (343,748)
General and
administrative
expenses (95,226) (200,381) (431,787) (466,468)
Research and
development costs (63,437) - (63,437) -
Income from operations 251,956 330,260 621,217 689,162
Other income
Interest income, net 45,800 21,210 123,936 50,790
Other income 9 1 9 3,746
Total other income 45,809 21,211 123,945 54,536
Income before income tax 297,765 351,471 745,162 743,698
Income tax (113,441) - (275,191) -
Net income $184,324 $351,471 $469,971 $743,698
Weighted average
shares outstanding
- basic and diluted 17,845,732 17,845,732 17,845,732 17,845,732
Basic and diluted
net income per share $0.010 $0.020 $0.026 $0.042
I'm saving the old iBox info as I plan on overhauling the iBox.
Genex Pharmaceutical, Inc., formerly known as KS E-Media, Inc. (the Company), was incorporated in the State of Delaware on February 28, 2002. Prior to June 17, 2004, the Company was considered a development stage company. The Company was a start-up Internet based Fulfillment Company based in Vancouver, BC, Canada.
On June 8, 2004, the Company entered into a Share Purchase Agreement with Tianjin Zhongjin Biology Development Co., Ltd. (TZBD), a company formed under the laws of the People's Republic of China, and the shareholders of TZBD. Under the terms of the agreement, the Company acquired 100 percent of TZBD's shares in exchange for 3,658,375 restricted shares of the Company's common stock which were issued to the TZBD shareholders. On June 17, 2004, the stock purchase made pursuant to the Share Purchase Agreement was consummated. On June 27, 2004, the Company effectuated a three-for-one stock dividend of the Company's common stock. On June 29, 2004, the Company changed its name to the present name.
TZBD's Chairman of the Board of Directors, Mr. Fuzhi Song, has been appointed the Company's President, Chief Executive Officer and Chairman of the Board of Directors. Mr. Shuli Zhang has been appointed Chief Financial Officer and Treasurer. Ms. Sufen Ai has been appointed as the Company's Secretary. Mr. Mayur Pandya resigned as an officer and director of the Company effective June 18, 2004.
http://finance.yahoo.com/q?s=GENX.OB
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
17.8 million shares outstanding
1.5 trailing Price/Earnings (.066 cents per share)
.76 trailing Price/Sales
http://www.genexpharm.com/download/FactSheet.pdf
Genex manufactures and sells a bovine-based bone grafting material to Chinese hospitals and is already profitable. However,
please note the possible significance of the following which is still very speculative, but potentially significant:
In August 2004 GENX signed a non-binding letter of intent to acquire Tianjin Zhongjin Pharmaceutical Company, which was the world's second largest manufacturer of Vitamin B1 in 2003-2004.
http://www.genexpharm.com/download/New20040819.pdf
If this acquisition were to occur it could have quite a positive impact on the stock if the acquisition terms are anywhere close to what were outlined in the LOI press release. Apparently,
during 2004 Zhongjin underwent a $20 million expansion in cooperation with BASF (the large German chemical company) that would make Zhongjin the world's largest manufacturer of Vitamin B1. Production in the new facilities was scheduled to begin in the first quarter of 2005. http://www.genexpharm.com/
Either way, GENX is another potentially lucrative "China Play" that investors with vision and patience (and a strong constitution) may find very interesting. Good luck to all! Do your own DD!!!!
Another repost on update
Not sure where we are on the WEB site. I will call them next week.
GENX update
1. GENX is working on going back to OB verses PK. They are filling on time.
2. WEB site will be up in December.
3. They are working on the disclosure of "other considerations" attached to the loans. The loan will need to be reclassified as an investment. We may have some very pleasant surprises there.
4. They are working on the dental market expansion.
The stock is trading very low right now (.08 to .10) The shareholder equity is .21 per share. When 1 and 3 are done we should see a large pop. Should be able to include it in my PSL5 :)
All IMO of course.
BG
Repost of visit to GENX in Nov 2006
Visit to GENX.
Travel to GENX was quite interesting. I had to go from Beijing to Tianjin by cab, 200 KM each way. For 800 RMB or 100US$ you can have your own cab for the day so it was not a big deal. Finding the place was a different story since my driver did not know Tianjin a small city of 10 million people! We finally made it after a lot of cell phone calls in Chinese.
I had 3 people waiting for me Mr song the Chairman son , The COO of the group and the CFO.
Mr. Song was the only one that could speak English. I started with the different points that I wanted to cover.
Company structure
The infamous loans
Company business and prospects
Future strategy
Status of old shares
GENX WB site
GENX is part of the GWG group owned by Mr. Song. The group has 1400 employees in Chemical, Pharma, Real Eastate, trading company. There is no legal relationship between GENX and GWG but a lot of sharing of resources. They occupy 2 floors of a very large building as their HQ. They also have several manufacturing facilities around Tianjin.
We had a long discussion about the loans. I stressed to them how bad it makes them look. The good news is that apparently the loans are more investments than loans. Equity interest in the companies receiving the loans are attached to the loans. I cannot go in more details at this point but will keep you up to date. The only thing I can say is that I urged them to clarify on their 10Q the interest they have in each companies.
Company is doing well but they are under constant pressure from the government to lower their cost. This could result in lower revenue growth if they do not expand the market. One million people in China could use the bone treatment they provide but only 50,000 can afford it. GENX supplies 20,000 patients, the next competitor is at 15,000. If they can reduce their cost with a manufacturing expansion they could service 200,000 patients. Bottom line is that they have a lot of room for expansion with the right investment.
They would like to enter the dental market with the same type of product. This would be a much larger market worldwide. I really liked that idea.
They need some help putting together their strategy and I committed to help them writting it.
The issue of old shares should be resolved soon. They do not seem to be overly concerned about it.
GENX will have a new WEB site before year end. I told them how important it was for shareholders visibility.
The conclusion is that GENX is not different than many small Chinese companies. Great potential but they do not quite know how to play the game. They are profitable, part of a bigger group and could do very well. They just need a lot of help.
In response to some of the posts made during the weekend about Chinese small cap companies, I would say that if you want to invest in them the DD needs to be a lot deeper than just reading a 10K or 10Q. You need to talk to them directly and even go there and see what they do. It does not guarantee success but it sure helps! A least I had a chance to climb the Great wall during my stay in Beijing.
By the way I am holding on to my 120k shares :)
BG
New to GENX?
For some of you new to the company I will list the links of my previous posts about the company. Since I am the only one that ever visited them in China I have a decent insight of their activities.
I am traveling right now so I will do that this weekend.
BG
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Company Description
TZBD is incorporated under the laws of the PRC and is headquartered in Tianjin, China. TZBD engages in the business of producing and distributing Reconstituted Bone Xenograft (“RBX”), which is considered to be a medical device. This bone grafting technology accelerates bone healing. Its medical devices are distributed to approximately 400 hospitals in 22 provinces throughout China. TZBD markets its technology to hospitals in China and targets to position itself as a comprehensive medical device provider of bone grafting products and services.
Insider Ownership
As of the last 10-K on 7/12/2006, there was the following insider ownership:
Name/Title No. of Shares % of ownership
Fuzhi Song, CEO, President and Director 13,170,152 73.8%
Deshun Song 1,463,348 8.2%
Mr Fuzhi Song and Mr Deshun Song are father and son.
GENX Filings
http://yahoo.brand.edgar-online.com/default.aspx?cik=1197380
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