I am updating my staus.
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LLEN - They added a washing facility in July 78 million rev at full capacity so around $20M will be added to revenue per quarter, don't know how much ramp up this quarter, this will be low margin 10% vs the 50% gross margins of coal mining. They also sold the, useless, coking firm that will lower gross margins as well.
Anyway, more info later...
rich
Where did you get the comparison from?
rich
I would have thought any form must be given to the SEC first since this has material affect on the company (to max out the forms shown I have to click on the "include" radio box). I don't see anything after the 27th.
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001399067&type=&dateb=&owner=include&count=40
rich
good grief eom
SOKF - yes, they said they matched all the criteria (other than I guess the $4 now, ahem) and had sent in the application.
rich
SOKF - I listened to the CC
If you look at the SG&A
Q1 1,898,374
Q2 2,001,385
Q3 3,107,666
Q4 3,251,243 (est)
FY 10,258,668
SG&A is very high in the last 2 quarters. think they said in Q3 there was a large one-time charge for opening beijing facility, think, $1.5M. So folks wanted to know what happened in Q4. There were a two or 3 questions that were asked on this topic. The translator didn't seem to be that proficient in finance. I don't think anyone would be shocked if there was another significant one time charge in Q4 - but that's guess work.
They did say that for the FY there were $2M in one time charges. So, I'm thinking that the PR really wasn't transparent to what they were up to.
If you ignore one times charges add that $2M back in then they made $12M for the year rather than the announce $10M... hmmm all confusing - they need to look at presentation of results to the analysts in a big way (one of the analysts said as much).
Anyway, I don't suppose the market much cares for the confusion. Don't blame it.
rich
Chinese filings - sorry probably dumb question but how do we get to see Chinese filings? Do we need a man in China to go to an office and pick up a copy?
rich
SEC vs SAIC- An excellent point. I guess with accounts you can do what you want. The best, and it's not that good, it that they have a way a squirrelling it back to retain the value or other grey area otherwise we have to assume the accounting firm is complicit. Either way we are losing transparency.
I agree there's not a lot of sense going on. If the Chinese government wanted the money we should expect new intiatives in that area. Otherwise they don't want it or it's part of the endemic corruption - I can't believe they can't find out either.
rich
SAIC vs SEC
Any articles of this nature can only enhance US investors - I am left with quite a few questions, ahem, I kept it to 3.
1) Can you look at SAIC filing with Chinese firms listed on the Shanghai stock exchange? Do they match those found in the SAIC?
I am thinking that expecting Chinese firms not listed in the US who avoid tax having to compete with US listed companies that pay their full tax to the PRC government would be a great way for US listed Chinese companies to have their margins crushed and go out of business.
2) Does the government want the full taxes? By not collecting the full taxes is this just a way of subsidising the Chinese firms over foreign firms?
3) Do you or your associates have positions in the stocks you want to discuss? I get the drift on "Tepid" but I think you need to re-iterate any position again for those not following your story closely.
rich
Interview Q&A Text
(anything in * *s is my opinion)
- Who is typically travelling on the bus
Typically person Travelling High to middle end business people
During the holidays it's Students (not as important)
- Do Chinese travel alot
yes. More economic growth means more travel.
- Travel Time of typical bus journey
Travel 3 - 6 hours
- How many times do they see the advert
Advert 3 time or more during the ride
- This increases retention rate vs TV advert or Internet
Captive audiences increase effectivity of advert
Who advertises
Coke, Pepsi, China Mobile & China Telecom, [Hitachi mentioned at the start]
Idea for the company?
To be effective in advertising we want 3 Elements
1) Captive Environment
2) Audience must have spare time to view
3) *best interpretation* China is large geographic area and you want advertisement that covers this area within it's network.
- Where is growth in next decade
In next 6 months focusing on airport travel buses & tour buses
- High speed trains
Looking at that market
- Another initiative Onboard Magazine
Looking at putting magazines in buses within the network.
- Similarly as people can put ads onto TVs they will be able to put adverts in to the magazines
yes, the adverts will be on a provincial basis and are looking at local businesses to put ads in.
Astronomic Growth
Three factors contributed to growth
1) Robust development of Chinese Economy
2) Focus on Airport travel buses
3) Increase in geographic coverage - added airport travel buses
- Raised Guidance for the full year
As we enter into more market and *interpret* will beat our guidance.
- Exciting time for the company
*looks board* yes
rich
I suspect that if the interview was conducted in Chinese it would have been quite different level of expression. They kept looking over at the interpreter to finish (I think).
rich
Buybacks - will also be intersting to see the effect on PPS. I read, somewhere or other, that they help the pps during the buyback and once over the pps comes under pressure again.
Perhaps a small but sustained buyback is the best medicine?
rich
ZSTN - what do you think impact of consolidating industry on ZSTN's set top business, if any? In the last CC they said that they were benefiting from the changes, so far at least.
rich
China consolidates all TV networks (What the deuce?)
BEIJING - China on Tuesday said it intends to consolidate radio and television networks under a single national cable television network company.
http://www.chinadaily.com.cn/business/2010-08/25/content_11198195.htm
Wonder what the affect on ZSTN? I think in the last CC they were benefiting from the changes going on in the industry.
rich
China consolidates all TV networks (What the deuce?)
BEIJING - China on Tuesday said it intends to consolidate radio and television networks under a single national cable television network company.
http://www.chinadaily.com.cn/business/2010-08/25/content_11198195.htm
I'm cynical and thinking they want to control media in big brother manner.
rich
Noticed this bit, I haven't been following the company, and noticed that this isn't the first time it's been mentioned. Though they say they intend to get it sorted by EOY.
Management believes the actions described above will remediate the significant deficiencies we have identified and strengthen our internal control over financial reporting. While these remedial actions have previously been identified, the necessary operational and personnel weaknesses were not alleviated in fiscal 2009. Our management intends to substantially complete these identified remedial actions during fiscal 2010.
Possibly this may have been exaserbated by moving to BDO? Another company I follow, and, gulp, still own shares of CNYD tried to move to BDO and were rejected and got told to sort out their accounting. Pure conjecture but perhaps BDO has been telling ZSTN to up their game?
Anyway, at least ZSTN got accepted by BDO! And I'm envious that ZSTN hasn't mucked about and started to buyback shares.
rich
You'll be wanting this:
http://www.sec.gov/Archives/edgar/data/1403794/000114420410045682/v194708_10qa.htm
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
..
..
It's not the first Chinese company I've seen saying this. New IPO's, Chinese ... hmm, lets just say there's more surprising things out there.
Expect any shorts to make the most of it. Investors concentrate on when improvements will mean they can remove these accountancy issues.
rich
Most detailed Warrant information was (probably) released in 8-K around the time of the transation...
The latest 10-Q has this to say...
http://www.sec.gov/Archives/edgar/data/1111817/000101376210001159/form10q.htm
On October 29, 2009 (the “Closing Date”), the Company entered into a securities purchase agreement (the “Purchase Agreement”), with several investors, including institutional, accredited and non-US persons and entities (the “Investors”), pursuant to which the Company issued and sold units, comprised of its newly designated Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), and warrants (the “Investor Warrants”), for a purchase price of US$1.10 per unit (the “October 2009 Financing”). The Company sold 13,499,274 units in the aggregate, which included (i) 13,499,274 shares of Series A Preferred Stock and (ii) Warrants to purchase an additional 13,499,274 shares of common stock at an exercise price of US$2.255 per share (the “Exercise Price”) with a three-year term. Gross proceeds totaled $14,849 thousand, net of issuance costs of $2,468 thousand. National Securities Corporation acted as placement agent and received (i) a placement fee in the amount equal to 6% of the gross proceeds, (ii) 50,000 shares of the Company’s common stock and (iii) warrants to purchase up to 1,349,927 shares of common stock at the Exercise Price with a three-year term (“Placement Agent Warrants” and together with the Investor Warrants, the “Warrants”). An additional 105,000 shares of the Company’s common stock, valued at $370 thousand, were issued to other third parties who provided assistance with the capital raise.
Sec is best place for this type of information... here's there search page...
http://www.sec.gov/edgar/searchedgar/companysearch.html
rich
Hi Millstone, I would agree with that common sense analysis - you want to max out the ad revenue on airport runs - though I haven't seen anything detailed and I missed the CC so I was simply wondering where information was from... so thanks for giving that.
rich
CCME's advertisement blocks: how do we know they run mainly adverts on the airport routes?
cheers
rich
CCME - not sure what there is to say. The shorters are saying the results were "fake" but I've not seen a substantive argument to justify that position - other than PPS action.
If I had a monopoly to sell advertising I would be able to make money hand over fist. Which is exactly what I think CCME is doing.
Now, I wish the longs could move the stock as well as the shorters I guess the "truth" will out sooner or later.
rich
Is making a new plant a priority or just a hypothetical? In the last CC, I think, they were talking about just running the new setup and not worrying about anything else.
If the next record earnings release results in no pps movement, say, it would be good to see them start to "flash the cash" - I can't think of a better way than paying for another facility with cash flow.
rich
T.Smith talks - people do not listen! or wish they hadn't!
rich
NEP He was probably there primarily for bi-lingual skills...
He probably got the job because of his language skills but on the board he had the strongest accounting skills. The audit committee was Bruce, Rule and a Geologist called Li - see below.
Audit Committee. In June 2008, Messrs. Bruce, Rule and Li were appointed to serve on the audit committee of the Board of Directors. Mr. Bruce serves as Chair of the audit committee. [1]
So going over the group:
Li - was a Geologist by training - he had experience in industry - no obvious account experience.
Rule - investment banker - financial experience but no obvious accounting credentials
Bruce - was a CFO of a private company
On this basis Bruce was the only one of the three who had previously held of job, CFO, producing accounts and given Bruce was made Chairman then he was either the only man with accounting expertise or certainly the most experienced. Bruce, while not responsible for the accounts, oversaw the release of the accounts which had a number of deficiencies from Q2 2008 to end of 2009.
He missed a catalog of errors so he isn't providing much in the way of over-sight. Clearly finding someone with strong accounting experience and bi-lingual skills is a tall order! However, Bruce's didn't prevent the problems occurring - in that case the audit committee was not functioning properly and there would have to be changes in that committee before NEP started trading - why would stockholders have confidence that the committee would be any better now at picking up accountancy errors?
The 3 CVs:
EDWARD M. RULE has served as Director of the Company since May 2008. Mr. Rule is Chairman of TDR Capital International Limited, a Hong Kong based financial services house. Most of his career has been spent in China, initially as a diplomat and subsequently as an investment banker with the Standard Chartered Group and private equity professional with the $800 million Asian Infrastructure Fund. He is a graduate in Chinese language of the University of Melbourne and the Australian National University. He speaks Mandarin Chinese and Cantonese. He has been director of several listed companies in Hong Kong and Australia.
ROBERT C. BRUCE has served as Director of the Company since May 2008. Mr. Bruce is President of Oakmont Advisory Group, LLC, a financial management consulting firm located in Portland, Maine. Prior to founding Oakmont Advisory Group, from 1999 through 2004 he served as Chief Operating Officer, Treasurer and Director for Enterix Inc., a privately-held, venture-funded medical device and laboratory services company that was purchased by Quest Diagnostics. He also previously served as Chief Financial Officer for Advantage Business Services (1997 to 1998), a privately-held national payroll processing and tax filing business that was subsequently acquired by PayChex. Mr. Bruce is a member of the Board of Directors of Immucell Corp., a NASDAQ listed manufacturer of animal health products. Mr. Bruce received his MBA from the Yale School of Management, and a Bachelor of Arts degree in East Asian Studies from Princeton University. Mr. Bruce speaks and reads Mandarin Chinese.
LI JING FU has served as Director of the Company since May 2008. Mr. Li is the Chairman and top representative of Joint Management Committee of Qian Guo County Longhai Petroleum & Natural Gas Co., Ltd. and was appointed to that position by Petro China’s Jilin branch in 2005. Mr. Li has been in the petroleum industry since 1970. In his extensive career he has served as Vice Monitor for Jiang Han Oil Field’s comprehensive logging team, Secretary of Command Department of Petroleum Hui Zhan in Jilin Province, Vice President of Jilin Oilfield Exploration and Development Research Institute. From 1995 to 2002, Mr. Li was appointed by PetroChina’s Jilin branch to serve as General Manger of management and production operation of oil exploitation of Jilin Jiyuan Petroleum & Natural Gas Development Co. Ltd. From 2002 to 2005, Mr. Li, served as Project Manager of Song Yua City Qian Yuan Oil & Gas Development Co., Ltd. also by appointment by PetroChina’s Jilin branch. Mr. Li received his bachelor’s degree from Chang Chun Geology Institute in Jilin, China.
rich
[1] http://www.sec.gov/Archives/edgar/data/787251/000121465909000711/d3319210k.htm
NEP - still no resume date... I'd expect to see a flood of filings first.
http://nasdaqtrader.com/Trader.aspx?id=TradeHalts
rich
NEP - Bruce was responsible was the Director and Audit Committee Chair - when the auditing showed a number of deficiencies [2] - they read like technical mistakes not fraud. Either way this guy failed to do his job and his position was untenable.
Should they have sacked him immediately or should they have kept him around while they worked through the auditing again? They decided to keep him around but his idea of forensically auditing previous years accounts even though, if we are to believe the other Directors letter, 2009 were fine smacks of self-preservation and not in shareholders interests.
Actually looking forward to the 10-K now - I didn't expect to be thinking that!
rich
[1] http://people.forbes.com/profile/robert-c-bruce/18749
[2] http://biz.yahoo.com/e/100308/nep8-k_a.html
Thank you for checking. I guess that's open to interpretation: my reading is that they can all do the same stuff they did before but now with a little added capacity?
Hmmm... interesting PR as it shows they want more but from capacity perspective not a game-changer then. Wonder why they decided to bring them online? Perhaps, a quick/flexible way to get some extra capacity and get Q3 & Q4 in on time?
rich
CFO's - I figured that Accounting skills + Business Sense + Well spoken English are fairly rare and sought after. Leading to poaching and high turnover.
I have no justification for this statement.
rich
LPH - financial year end was June 30th... The 10-K has until mid-september assuming no extentions.
rich
CCLTF - thanks. Seems a strange decision.
rich
CCLWF - they didn't even ask if anyone wanted a question....
rich
CCLWF - I joined after 12 - 14mins - they were yabbering away about their financials. When they finished they said "over to you operator"...I was expecting the Q/A but operator said "please disconnect" and it just ended! I hung on for a few more seconds thinking it was a mistake and surely they would have Q/A but just stopped.
Did I miss something?
rich
CNAM - why didn't they say how many cutting machines they had currently? If they have 100 then big deal. If they have 1 then impressive. Are cutting machines a bottle neck? Bit of positive fluff as they are trying to emphasise "we are gearing up".
Don't really know what to do with the metric - I'm not adding cutting machines column to my spreadsheet!
rich
CCLTF - yes, I don't remember any signficant capex for older plant. However, you can see that the backlog has increased from 242 Million Yuan to 312 Million Yuan from Q1 to Q2. I think they were expecting 285 Million Yuan so suspect they are reacting to the demand.
Also estimating in Q3 11.5 Million volume up from 10.5 in Q2.
They have $26M in capex remaining and $10M in the bank. Suspect they are going to sell shares equivalent to the warrants they are convering?
Increasing Backlog most imp to me - shows what the news has been saying - construction is continuing but house prices themselves are under pressure from government initiatives.
Hopefully CC will answer some questions....
rich
SSE Close +2.11% - graph just kept trucking-on-up eom
CCME - every (US) westerner on the bus has 13 times the average spending power of an average Chinese person is worth... (wonder if they have English adverts??) Obviously, not quite as clean cut as city Chinese paid a lot more than rural folk.
Its per capita income is more on a par with those of impoverished nations like Algeria, El Salvador and Albania — which, along with China, are close to $3,600 — than that of the United States, where it is about $46,000.
rich
CCME - bus operators, which are, I believe, state owned enterprises, will choose the adversting company that the state has annointed. This is CCME - so in the near future they will be the only choice.
Will the monopoly continue? It could well do VISN just renewed their contract for the subway.[1]
"On July 14, 2010, the Company announced the renewal and extension of its exclusive contract with Beijing's subway system, which enables the Company to continue to operate its subway mobile digital television and advertising network in Beijing on an exclusive basis for the next five years."
Assuming they loose their monopoly in 4 years time (or however long it is) While margins would degrade significantly they will have increased the advertising charges which are a fraction of what they could be - think figure was 3 - 5% of what the cost is for advertising on television. Difficult to say exactly but they could well cancel each other out.
rich
[1] http://finance.yahoo.com/news/VisionChina-Media-Inc-prnews-1601565494.html?x=0&.v=101
YONG - A/R is what the recent buying of the sales list is about.
2009 Q2
Revenue 46,271,544
Receivable 36,591,544
2010
Revenue 89,414,388 (+93% Y/Y)
Receivable 54,318,725 (+48% Y/Y)
So, it has improved but nothing impressive by any means. The jump is just symptomatic with the seasonality of the quarter (Big Q2 & Q3, Small Q4 & Q1). In previous years they catch up the receivables in Q4 ready for the next year - however clearly this is not sustainable and they are trying to improve the situation with buying the list.
rich
PUDA - feeling a bit dense here... basically they have someone to finance the development of the mines and they will buy it back at the appropriate time? That right?
rich
8K describing deal
http://www.sec.gov/Archives/edgar/data/1162747/000114420410041510/v192661_ex10-1.htm
CELM - 6 months after IPO, 29th Jan, wonder if it's unlocked shares?
rich