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GU earnings report.
I'm not sure about this and would appreciate some input.
It appears to me that the stock is taking a ridiculous hit due to a one-time charge. For the quarter, the estimate is 0.30. I came up with 0.41 excluding the one-time charge. GU clearly beat on revenue, 37.23M vs. est 34.81M.
In any event, the stock looks cheap, the growth robust. The PEG ratio is 0.17.
http://finance.yahoo.com/q/ae?s=GU
_________
Gushan Environmental Energy Limited Announces Fourth Quarter and Full Year 2007 Year Results
Wednesday March 5, 8:17 am ET
NEW YORK, March 5 /PRNewswire-FirstCall/ -- Gushan Environmental Energy Limited ("Gushan"; NYSE: GU), China's largest producer of biodiesel as measured by annual production capacity, today announced its unaudited financial results for the fourth quarter and year ended December 31, 2007.
Fourth Quarter 2007 Highlights
-- Total revenues increased 50.4% compared to the corresponding quarter of
2006
-- Income from operations increased 104.0% compared to the corresponding
quarter of 2006
-- One-time non-cash interest expenses of RMB108.9 million (US$14.9
million) in connection with the conversion of convertible notes
-- Net loss of RMB19.8 million (US$2.7 million) in the fourth quarter of
2007, compared to net income of RMB48.5 million (US$6.6 million) for
the fourth quarter of 2006
-- Sales volume of biodiesel increased 31.2% compared to the corresponding
quarter of 2006
-- Average selling price of biodiesel increased 13.5% compared to the
corresponding quarter of 2006
Full Year 2007 Highlights
-- Total revenues increased 22.3% compared to 2006
-- Income from operations increased 15.0% compared to 2006
-- One-time non-cash interest expenses of RMB108.9 million (US$14.9
million) in connection with the conversion of convertible notes
-- Net income decreased 30.8% compared to 2006
-- Sales volume of biodiesel increased 15.1% compared to 2006
-- Average selling price of biodiesel increased 5.2% compared to 2006
Three months For the year
(in US$ thousand, except per ended December 31 ended December 31
share data) 2006 2007 2006 2007
Revenues 24,753 37,237 113,026 138,193
Gross profit 9,438 16,212 51,784 60,193
Income from operations 6,692 13,652 45,662 52,522
Net income / (loss) 6,642 (2,715) 45,623 31,568
Diluted earnings per share 0.049 (0.021) 0.341 0.251
Diluted earnings per ADS 0.098 (0.042) 0.682 0.502
Gross profit margin 38.1% 43.5% 45.8% 43.6%
Net profit margin 26.8% -7.3% 40.4% 22.8%
Sale volume of biodiesel tons 35,344 46,382 158,994 182,969
ASP of biodiesel RMB/ton 4,494 5,100 4,393 4,621
Sale volume of by-products tons 4,471 5,316 21,479 22,134
ASP of by-products RMB/ton 4,858 6,601 5,868 7,346
Notes:
For the convenience of readers, certain RMB amounts have been translated into US dollars at the rate of RMB7.2946 to US$1.00, the noon buying rate for US dollars in effect on December 31, 2007 for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that RMB amounts could have been, or could be, converted into US$ at that rate or at any other certain rate on December 31, 2007, or at any other date.
"In 2007, we achieved another year of solid growth and continued to build on our leadership in China's fast-growing biodiesel market," said Jianqiu Yu, Chairman and Principal Executive Officer of Gushan. "Demand for diesel in China to fuel the nation's rapid economic growth continues to outstrip growth in supply and Gushan is continuing to expand production capacity to meet growing demand. The Company's total production capacity increased from 170,000 tons, or approximately 51 million gallons, at the end of 2006 to 190,000 tons, or approximately 57 million gallons, at the end of 2007, and to 240,000 tons, or approximately 72 million gallons, currently with the recent opening of Gushan's plant in Beijing, the Company's fourth production facility. Further expansion of the Beijing plant and new plants set to open this year in Shanghai, Chongqing and Hunan are expected to boost Gushan's total annual production capacity to 400,000 tons, or approximately 120 million gallons, by the end of 2008. As a first mover in China's biodiesel market with a proven track record, proprietary production technology, a competitive cost structure, reliable supply of low cost raw materials, rigorous quality control and strong management team, Gushan is well-positioned for sustained growth and market leadership."
2007 Dividend
On March 5, 2008, the board of directors declared dividends of RMB0.41 (US$0.056) per ordinary share of the Company, or (RMB0.82 (US$0.112) per ADS in respect of the year. The dividend is payable on or before May 30, 2008 to shareholders of record at the close of business on April 3, 2008, U.S. Eastern Time. The dividend will be payable in cash, in US$, and the exchange rate between RMB and US$ shall be ascertained on the basis of the average of the noon buying rates as published by the Federal Reserve Bank of New York for the five trading days prior to April 3, 2008. As the dividend was declared after the balance sheet date, it has not been included in the liabilities at of December 31, 2007.
Fourth Quarter 2007 Results
Revenues
The Company's revenues increased by 50.4% from RMB180.6 million (US$24.8 million) for the fourth quarter of 2006 to RMB271.6 million (US$37.2 million) for the fourth quarter of 2007. During the same period its sales volume of biodiesel and by-products increased by 11,038 tons and 845 tons, representing an increase of 31.2% and 18.9%, respectively. This growth in revenues was due to an increase in sales volume, as well as an increase in the average selling price of the Company's biodiesel and by-products, respectively, from RMB4,494 (US$616.10) and RMB4,858 (US$666.00) per ton in the fourth quarter of 2006 to RMB5,100 (US$699.10) and RMB6,601 (US$904.90) per ton in the fourth quarter of 2007, representing an increase of 13.5% and 35.9%. The increase in sales volume was supported by an increase of 20,000 tons, or approximately 6 million gallons, in the annual production capacity of Sichuan Gushan during the fourth quarter of 2007. The increase also reflected the temporary suspension of production at the Fujian plant to install a covered storage tank in November 2006, which reduced revenues during the fourth quarter of 2006.
Cost of Revenues
Cost of revenues for the fourth quarter of 2007 totaled RMB153.4 million (US$21.0 million), an increase of RMB41.7 million (US$5.7 million) or 37.3%, compared to RMB111.7 million (US$15.3 million) for the fourth quarter of 2006. This increase was primarily attributable to increases in the Company's production volume and overall average per unit costs for vegetable oil offal and used cooking oil as a result of a general increase in labor and transportation costs in China.
Gross Profit
The Company's gross profit for the fourth quarter of 2007 totaled RMB118.3 million (US$16.2 million), an increase of RMB49.5 million (US$6.8 million), or 71.9%, compared to RMB68.8 million (US$9.4 million) in the fourth quarter of 2006. The Company's gross margin increased to 43.5% for the fourth quarter of 2007 from 38.1% for the fourth quarter of 2006 for the reasons discussed above.
Research and Development Expenses
Research and development expenses totaled RMB0.6 million (US$0.1 million) in the fourth quarter of 2007, an increase of 44.2% from RMB0.4 million (US$0.1 million) for the fourth quarter of 2006. This increase was primarily due to an increase in costs incurred in connection with the Company's joint research and development programs with two research institutions in China.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the fourth quarter of 2007 totaled RMB18.1 million (US$2.5 million), a decrease of 7.8% from RMB19.6 million (US$2.7 million) for the fourth quarter of 2006. This decrease was primarily due to a decrease in share-based compensation by RMB1.1 million (US$0.2 million) and decrease in provision for the statutory staff welfare expense by RMB8.0 million (US$1.1 million). The above increases were offset by an increase in staff bonus of RMB7.8 million (US$1.1 million).
Other Income (Expense)
Total interest expense for the fourth quarter of 2007 was RMB108.9 million (US$14.9 million) compared to nil for the fourth quarter of 2006. This was the result of one-time non-cash interest expense upon the conversion of the Company's convertible notes in the fourth quarter of 2007, into ordinary shares of the Company upon completion of the initial public offering. For the quarter ended December 31, 2006, all interest expenses derived from the convertible notes were fully capitalized.
Income Tax Expense
Income tax expense for the fourth quarter of 2007 was RMB12.1 million (US$1.7 million), compared with an expense of RMB0.7 million (US$0.1 million) for the fourth quarter of 2006. This increase is primarily the result of the expiration of the exemption from Enterprise Income Tax ("EIT") with respect to Sichuan Gushan and Handan Gushan. As of January 1, 2007, the income tax rate applicable to Sichuan Gushan and Handan Gushan increased from 3% to 18% and from 0% to 15%, respectively.
Net Income / (Loss)
The Company's net loss for the fourth quarter of 2007 was RMB19.8 million (US$2.7 million), while net income for the fourth quarter of 2006 was RMB48.5 million (US$6.6 million). This was mainly due to the one-time non-cash write- off of the unamortized amount of the beneficial conversion feature mentioned above.
Full Year 2007 Results
Revenues
The Company's full-year revenues increased 22.3% from RMB824.5 million (US$113.0 million) in 2006 to RMB1,008.1 million (US$138.2 million) in 2007. For the full year, sales volume of biodiesel and by-products increased 15.1% and 3.1%, respectively, to 182,969 tons and 22,134 tons. This was due to the full-year 2007 contribution to production from Fujian Gushan, which started production in February 2006, an increase in the annual production capacity of Sichuan Gushan by 20,000 tons, or approximately 6 million gallons, during the fourth quarter of 2007, which contributed to an increase in revenues and sales volume of that plant, and an increase in the average selling price of the Company's biodiesel and by-products from RMB4,393 (US$602.20) and RMB5,868 (US$804.40) per ton, respectively, in 2006 to RMB4,621 (US$633.30) and RMB7,346 (US$1,007.00) per ton in 2007, representing increases of 5.2% and 25.2%.
Cost of Revenues
Full-year 2007 cost of revenues totaled RMB569.0 million (US$78.0 million), an increase of RMB122.3 million (US$16.8 million), or 27.4%, from RMB446.7 million (US$61.2 million) in 2006. This increase was primarily attributable to increases in the Company's total production and an increase in the overall average per unit costs for vegetable oil offal and used cooking oil as a result of a general increase in labor and transportation costs in China.
Gross Profit
The Company's gross profit for 2007 totaled RMB439.1 million (US$60.2 million), an increase of RMB61.4 million (US$8.4 million), or 16.2%, compared to RMB377.7 million (US$51.8 million) in 2006. Gross margin decreased to 43.6% in 2007 from 45.8% in 2006 for the reasons discussed above.
Research and Development Expenses
Research and development expenses totaled RMB2.4 million (US$0.3 million) in 2007, an increase of 125.7% from RMB1.1 million (US$0.2 million) in 2006. This increase was primarily due to an increase in costs associated with the Company's joint research and development programs with two research institutions in China.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the year totaled RMB53.6 million (US$7.3 million), an increase of 22.9% from RMB43.6 million (US$6.0 million) in 2006. This increase was primarily due to an increase in share- based compensation by RMB3.9 million (US$0.5 million), an increase in basic staff cost by RMB4.5 million (US$0.6 million) due to expansion of the Company's Hong Kong office, Fujian headquarters, and Beijing and Shanghai plants, an increase of pre-operating expenses of Beijing Gushan and Shanghai Gushan by RMB1.6 million (US$0.2 million), and an increase of staff bonus of RMB7.8 million (US$1.1 million). The above increases were offset by a decrease in the statutory staff welfare expense by RMB7.9 million (US$1.1 million). Gushan also incurred professional fees in the amount of RMB9.9 million (US$1.4 million), which mainly included the audit fee of RMB6.4 million (US$0.9 million).
Other Income (Expense)
The Company's interest income for 2007 totaled RMB3.8 million (US$0.5 million), a decrease of RMB0.8 million (US$0.1 million) from RMB4.5 million (US$0.6 million) in 2006. This decrease was primarily due to a higher proportion of RMB deposits, which carry a lower interest rate than U.S. or Hong Kong Dollar deposits.
Total interest expense for 2007 was RMB108.9 million (US$14.9 million), an increase of RMB105.7 million (US$14.5 million) from RMB3.2 million (US$0.4 million) in 2006. This increase was entirely due to the one-off non-cash interest expenses of RMB108.9 million (US$14.9 million) in connection with the writing-off of the unamortized amount of the beneficial conversion feature of the Company's convertible notes in the fourth quarter of 2007, which resulted from the conversion of the Company's convertible notes into ordinary shares of the company upon completion of the initial public offering. For 2006, all interest expenses derived from the convertible notes were fully capitalized.
Income Tax Expense
Income tax expense for 2007 was RMB48.5 million (US$6.6 million), compared with RMB4.4 million (US$0.6 million) in 2006. The effective tax rate for 2007 was 17.4% compared to 1.3% for 2006. This increase is primarily the result of the expiration of the exemption from EIT with respect to Sichuan Gushan and Handan Gushan. As of January 1, 2007, the income tax rate applicable to Sichuan Gushan and Handan Gushan increased from 3% to 18% and from 0% to 15%, respectively.
Net Income
The Company's net income for 2007 was RMB230.3 million (US$31.6 million), a decrease of RMB102.5 million (US$14.1 million), or 30.8%, from RMB332.8 million (US$45.6 million) in 2006 for the reasons discussed above.
Financial Condition
As of December 31, 2007, the Company had working capital of RMB1,330.7 million (US$182.4 million), represented by total current assets of RMB1,455.5 million (US$199.5 million) and total current liabilities of RMB124.8 million (US$17.1 million). Of the total current assets, the Company had RMB1,380.7 million (US$189.3 million) in cash and cash equivalents. During the fourth quarter of 2007, the Company completed its initial public offering, generating net proceeds of RMB981.8 million (US$134.6 million), net of underwriting discounts and commissions.
Outlook for 2008
Gushan currently operates four production facilities, located in Sichuan, Heibei, Fujian and Beijing in China with an annual total biodiesel capacity of 240,000 tons, or approximately 72 million gallons. We expect to commence operations at our new Shanghai plant (with annual total biodiesel capacity of 50,000 tons, or approximately 15 million gallons) during the second quarter of 2008 and at our new plants in Chongqing and Hunan (each with annual total biodiesel capacity of 30,000 tons, or approximately 9 million gallons) during the fourth quarter of 2008. In addition, the Company expects to increase the annual biodiesel production capacity at its Beijing plant from 50,000 tons (or approximately 15 million gallons) to 100,000 tons (or approximately 30 million gallons) in the fourth quarter of 2008. As a result, the company expects that its annual total biodiesel capacity to reach 400,000 tons (or approximately 120 million gallons) by the end of 2008. Based on current circumstances and barring any unforeseen events, Gushan estimates that its total biodiesel production volume in 2008 will be approximately 270,000 tons, or approximately 81 million gallons.
Recent Events
In January 2008, the Company's Beijing plant commenced production, adding 50,000 tons (or approximately 15 million gallons) to the company's annual biodiesel production capacity.
In December 2007 and January 2008, the Company, through its newly established subsidiaries, Chongqing Gushan Bio-Sources Energy Co., Ltd. and Hunan Gushan Bio-Sources Energy Co., Ltd., entered into agreements for the acquisition of land use rights to areas in Chongqing and Hunan, respectively, for the construction of biodiesel facilities to further expand Gushan's production capacity.
Conference Call
Gushan's management will hold its fourth quarter and full year 2007 earnings conference call at 8:30am U.S. Eastern Time (9:30pm Beijing / Hong Kong Time) on March 5, 2008.
Dial-in details for the earnings conference call are as follows:
US Toll Free: 1 800 510 0178
US Toll for International Callers: 1 617 614 3450
Hong Kong Toll Free: 852 3002 1672
China Toll Free: 10 800 130 0399
UK Toll Free: 00 800 280 02002
UK Toll for International Callers: 44 207 365 8426
Passcode for all regions: 66278379
A replay of the call will be available on the same day at 11:00 a.m. U.S. Eastern Time (or 12:00 a.m. Hong Kong Time) until March 8, 2008 and may be accessed by phone at the following numbers.
US Toll Free: 1 888 286 8010
US Toll for International Callers: 1 617 801 6888
Passcode for all regions: 43948238
In addition, a live and archived webcast of this conference call will be available on the Investor Relations section of Gushan's website at www.chinagushan.com.
About Gushan Environmental Energy Limited
Gushan Environmental Energy is China's largest producer of biodiesel, as measured by annual production capacity. The company produces biodiesel, a renewable, clean-burning and biodegradable fuel, primarily from vegetable oil offal and used cooking oil, and by-products from biodiesel production, including glycerine, plant asphalt, erucic acid and erucic amide. Gushan sells biodiesel directly to users, such as marine vessel operators, as well as to petroleum wholesalers and individual retail gas stations. The company currently operates four production facilities in Sichuan, Hebei, Fujian provinces and Beijing with a combined annual production capacity of 240,000 tons, or approximately 72 million gallons. The company targets to increase its annual production capacity to 400,000 tons, or approximately 120 million gallons, by the end of 2008 with the expansion or addition of new production facilities in Beijing, Shanghai, Hunan and Chongqing.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as "will," "may," "expect," "anticipate," "aim," "target," "intend," "plan," "believe," "estimate," "potential," "continue," and other similar statements. Statements other than statements of historical facts in this announcement are forward-looking statements, including but not limited to, our expectations regarding the expansion of our production capacities, our future business development, and our beliefs regarding our production output. These forward- looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Important risks and uncertainties that could cause the Company's actual results to be materially different from expectations include but are not limited to the effect of intensifying competition in the biodiesel and alternative energy industries, the availability of suitable raw materials to the Company, and the risks set forth in the Company's filings with the U.S. Securities and Exchange Commission, including on Form F-1, as amended. The Company undertakes no obligation to update forward-looking statements, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
GUSHAN ENVIRONMENTAL ENERGY LIMITED
CONSOLIDATED STATEMENT OF INCOME
(Amounts expressed in thousands, except share data)
For the Three Months Ended December
31,
2006 2007 2007
RMB RMB USD
Revenue 180,560 271,632 37,237
Cost of revenues 111,716 153,372 21,025
Gross profit 68,844 118,260 16,212
Operating expenses
Research and development (394) (568) (78)
Selling, general and administrative (19,635) (18,107) (2,482)
Total operating expenses (20,029) (18,675) (2,560)
Income from operations 48,815 99,585 13,652
Other income (expense): -
Interest income 1,406 1,435 197
Interest expenses - (108,893) (14,928)
Foreign currency exchange losses (1,013) (7) (1)
Other income, net (95) 198 27
Income before income tax expense 49,113 (7,682) (1,053)
Income tax expense (663) (12,125) (1,662)
Net income 48,450 (19,807) (2,715)
Earnings per ordinary share
- Basic 0.391 (0.153) (0.021)
- Diluted 0.354 (0.153) (0.021)
Earnings per ADS
- Basic 0.783 (0.305) (0.042)
- Diluted 0.708 (0.305) (0.042)
Weighted average ordinary shares
outstanding
- Basic 123,820,000 129,808,184
- Diluted 136,831,943 130,214,395
Weighted average ADS outstanding
- Basic 61,910,000 64,904,092
- Diluted 68,415,972 65,107,197
Share-based compensation expense
included in (RMB in thousands) 3,162 2,041 280
For the Year Ended December 31,
2006 2007 2007
RMB RMB USD
Revenue 824,482 1,008,056 138,193
Cost of revenues 446,742 568,973 77,999
Gross profit 377,740 439,083 60,194
Operating expenses
Research and development (1,062) (2,397) (329)
Selling, general and administrative (43,592) (53,557) (7,342)
Total operating expenses (44,654) (55,954) (7,671)
Income from operations 333,086 383,129 52,523
Other income (expense): -
Interest income 4,508 3,757 515
Interest expenses (3,216) (108,893) (14,928)
Foreign currency exchange losses (1,095) (1,945) (267)
Other income, net 3,913 2,726 374
Income before income tax expense 337,196 278,774 38,217
Income tax expense (4,392) (48,499) (6,649)
Net income 332,804 230,275 31,568
Earnings per ordinary share
- Basic 2.748 1.837 0.252
- Diluted 2.491 1.834 0.251
Earnings per ADS
- Basic 5.496 3.675 0.504
- Diluted 4.982 3.668 0.502
Weighted average ordinary shares
outstanding
- Basic 121,123,534 125,329,350
- Diluted 134,942,538 125,564,028
Weighted average ADS outstanding
- Basic 60,561,767 62,664,675
- Diluted 67,471,269 62,782,014
Share-based compensation expense
included in (RMB in thousands) 6,219 10,153 1,392
GUSHAN ENVIRONMENTAL ENERGY LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands, except share data)
December 31,
2006 2007 2007
RMB RMB USD
(Audited) (Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents 275,142 1,380,735 189,282
Accounts receivable 24,780 31,110 4,265
Inventories 38,784 31,580 4,329
Prepaid expenses and other current
assets 9,549 12,113 1,660
Total current assets 348,255 1,455,538 199,536
Prepayments and deposits for
purchase of property, plant and
equipment - 70,490 9,663
Property, plant and equipment, net 498,085 736,881 101,017
Land use rights 25,178 42,812 5,869
Convertible note issuance costs 7,600 - -
Total assets 879,118 2,305,721 316,085
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Convertible notes 41,043 - -
Accounts payable 7,647 47,242 6,476
Accrued expenses and other payables 27,504 58,446 8,012
Accounts due to related parties 196 - -
Income taxes payable 4,607 19,152 2,626
Total current liabilities 80,997 124,840 17,114
Commitments and Contingencies
Shareholders' equity:
Carling Technology Limited Ordinary
Shares:
Par value: US$0.00001 (RMB0.00082)
Authorised: 500,000,000 shares
Issued and outstanding:
123,820,000 as of December 31,
2006 102 - -
Gushan Environmental Energy Limited
Ordinary Shares:
Par value: HK$0.00001
(RMB0.0000097)
Authorised: 38,000,000,000 shares
Issued and outstanding:
166,831,493 as of December 31,
2007 - 2 -
Additional paid-in capital 283,095 1,436,441 196,918
Accumulated other comprehensive
loss (3,653) (4,412) (605)
Retained earnings 518,577 748,850 102,658
Total shareholders' equity 798,121 2,180,881 298,971
Total liabilities and
shareholders' equity 879,118 2,305,721 316,085
TBYH / CNTF trap door?
I used to like TBYH for quite some time. It croaked down to 1.35 or so soonafter CNTF (biggest player in sector?) warned. Not totally clear if there was a causal relationship. But I would suggest anyone seriously playing TBYH pay close attention to CNTF.
http://finance.yahoo.com/q/bc?s=CNTF&t=1y&l=on&z=m&q=c&c=tbyh.ob
Just one chimp's opinion, but CNTF looks likely to get chopped down tomorrow, following this report:
___________________
TechFaith Reports Second Quarter 2006 Results
Monday August 14, 4:00 pm ET
BEIJING--(MARKET WIRE)--Aug 14, 2006 -- China TechFaith Wireless Communication Technology Limited (NASDAQ:CNTF - News), a handset application software and handset solution provider based in China, today announced its unaudited financial results for the quarter ended June 30, 2006.
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Net revenue for the second quarter of 2006 was US$21.8 million, as compared to US$21.2 million for the same period in 2005. Design fee revenue for the second quarter of 2006 was US$12.7 million, as compared to US$15.1 million for the same period in 2005. Royalty income in the second quarter of 2006 was US$2.2 million, as compared to US$4.4 million for the same period in 2005. Revenue from products sales was US$6.9 million in the second quarter of 2006, as compared to US$1.7 million in the same period in 2005. In the second quarter of 2006, approximately 40.1% of revenue from products sales was from sales of wireless modules, 27.5% from sales of smart phone, 3.9% from sales of PCBA and 28.5% from sales of other component products.
Net income for the second quarter of 2006 was US$3.8 million or US$0.09 per weighted average outstanding ADS (basic and diluted), compared to net income of US$11.3 million or US$0.28 per weighted average outstanding ADS (basic and diluted) in the same period in 2005.
US$4.0 million, which amounted to approximately 18% of second quarter 2006 revenue, originated from a technology transfer transaction in which TechFaith sold pre-existing technology to a customer, with a 100% gross margin. Excluding this non-recurring transaction, revenue would have been US$17.9 million, with a net loss of US$200 thousand.
Gilbert Lee, President and Chief Operating Officer of TechFaith, said, "We generated approximately $1.8 million in positive cash flow in the second quarter and ended the quarter with a balance of $148.9 million in cash and cash equivalents on our balance sheet. Despite our confidence in our business model, net income will continue to be impacted by revenue mix, with higher margin design fees expected to be sequentially lower and lower margin product sales expected to be sequentially higher in the third quarter. This should result in revenue in the third quarter being flat to slightly down compared to the second quarter of 2006, and the combination of the unfavorable revenue mix, longer approval processes and higher investments resulting in a net loss. We remain confident in our long-term business strategy based on existing contracts and the level of new contract activity, along with our major strategic relationships. Furthermore, our continued investments are strategically important and we expect them to further bolster our leadership position and ability to capitalize on the growth opportunities in front of TechFaith."
Defu Dong, TechFaith's Chairman and CEO, said, "We missed the top line of our second quarter's pre-warning announcement by US$800 thousand because of two contracts that were not signed before our financial closing cut-off. We missed the bottom line of the pre-warning announcement by US$200 thousand due to the net effect of the P&L impact of the contracts mentioned above, a deferred tax adjustment and the offsetting positive effect of an adjustment related to G&A expense. Regarding our overall progress, the 3G process to completion is lengthier and more cumbersome than we are historically used to with GSM, 2G and 2.5G designs. Based on the progress so far, our expectation is that the process may take up to 3 to 4 more quarters. However, our business fundamentals remain in place, as does our healthy financial position. We have established one of the most powerful technology development teams for the mobile industry worldwide. Therefore, our long-term confidence in our business remains high. Our investments will add not only revenue, but also value to our top line and will result in us further strengthening our higher margin core competencies such as handset design. We will be able to even more definitively differentiate ourselves from our competitors."
"Our core business remains handset design," continued Mr. Dong, "The advantage in design will largely reduce cost and leverage the R&D in products-sales business, which will boost our business development and ensure our leadership. We still have no intention of entering manufacturing, as we always outsource the production in order to solely focus on handset design. Further, because a substantial portion of the design solutions is reusable, we are able to significantly reduce costs and leverage R&D resources to ensure our competitive edge in the market."
China TechFaith also announced today that Peter Clarke recently resigned from the company's board of directors due to personal reasons. Mr. Clarke, a former independent director of the company, served as audit committee chairman prior to his resignation. China TechFaith intends to start the new director search process immediately and fill the vacancy as soon as practicable and, in any event, before the deadline required under relevant Nasdaq corporate governance rules.
China TechFaith's ADSs, each of which represents 15 ordinary shares of China TechFaith, are currently trading on the Nasdaq Global Market under the symbol ''CNTF.''
Investor Conference Call / Webcast Details
The dial-in number for the live audio call beginning on August 14, 2006 at 7:00 p.m. U.S. Eastern Time (7:00 a.m., August 15, 2006 in Beijing) is 1-866-770-7120 (domestic) or 1-617-213-8065 (international). The passcode is 91270507. A live webcast of the conference call will be available on China TechFaith's website at www.techfaithwireless.com.
A replay of the call will be available on August 14, 2006 at 9:00 p.m., U.S. Eastern Time (9:00 a.m., August 15, 2006 in Beijing) through midnight on August 21, 2006, U.S. Eastern Time (noon, August 22, 2006 in Beijing) at www.techfaithwireless.com and by telephone at 1-888-286-8010 (domestic) or 1-617-801-6888 (international). The passcode to access the replay is 89425888.
About TechFaith
TechFaith (NASDAQ:CNTF - News) is one of the largest handset application software and handset solution providers. Based in China, the Company employs approximately 2,600 professionals, of whom 90% are engineers. TechFaith's three business units are handset design, application software, and smartphone and pocket PC. With the capability of developing MMI / UI software on GSM/GPRS, CDMA1X, EVDO, WCDMA/UMTS, HSDPA and TD-SCDMA communication technologies, TechFaith is able to provide MMI / UI software packages that fulfill the specifications of handset brand owners and major global operators. Having a full range of wireless application software including WAP, Java, MMS, WWW browser, SyncML and DRM, TechFaith is also providing total solutions for upper layer software of handsets. In addition, TechFaith is developing smart phone software based on open operating systems including Linux and Windows Mobile, and capable of implementing high-end smart phones integrating Bluetooth, WiFi, high mega pixel cameras etc. based on different communication technologies according to special requirements of customers. TechSoft, the Company's newly established entity with Qualcomm's capital investment is focusing on the development of application software for wireless devices. For more information, please visit www.techfaithwireless.com.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the ''safe harbor'' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as ''will,'' ''expects,'' ''anticipates,'' ''future,'' ''intends,'' ''plans,'' ''believes,'' ''estimates'' and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as TechFaith's strategic and operational plans, contain forward-looking statements. TechFaith may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about TechFaith's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, TechFaith's limited operating history, mobile handset brand owners' discontinuation or reduction of the use of independent design houses, TechFaith's ability to retain existing or attract additional international customers, TechFaith's earnings or margin declines, failure of competing against new and existing competitors, and other risks outlined in TechFaith's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. TechFaith does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of August 14, 2006, and China Techfaith does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of U.S. Dollars, except share and per
share/ADS data and unless otherwise stated)
Three Months Ended Six Months Ended
June 30 June 30
2005 2006 2005 2006
----------- ----------- ----------- -----------
Revenues:
Design Fees $ 15,075 $ 12,670 $ 31,609 $ 21,660
Royalty income 4,413 2,197 7,513 4,046
Products sales 1,725 6,923 3,571 8,916
----------- ----------- ----------- -----------
Total net revenues $ 21,213 $ 21,790 $ 42,693 $ 34,622
Cost of revenues:
Design fees $ 6,608 $ 7,352 $ 13,016 $ 12,893
Royalty income
Product sales 1,263 5,569 2,829 7,256
----------- ----------- ----------- -----------
Total cost of revenues $ 7,871 $ 12,921 $ 15,845 $ 20,149
Gross Profit $ 13,342 $ 8,869 $ 26,848 $ 14,473
Operating expenses:
General and
administrative $ 2,586 $ 2,357 $ 3,917 $ 4,875
Research and development 723 3,599 1,590 6,280
Selling and marketing 265 540 533 1,007
----------- ----------- ----------- -----------
Total operating
expenses $ 3,574 $ 6,496 $ 6,040 $ 12,162
Income from operations $ 9,768 $ 2,373 $ 20,808 $ 2,311
Interest expense (583)
Other income, net 2,002 1,169 2,075 2,388
Change in fair value of
call option (1,303)
----------- ----------- ----------- -----------
Income before income
taxes $ 11,770 $ 3,542 $ 20,997 $ 4,699
Income tax (15) (15)
----------- ----------- ----------- -----------
Income before minority
interests $ 11,770 $ 3,527 $ 20,997 $ 4,684
Minority interests (491) 314 (1,467) 423
----------- ----------- ----------- -----------
Net income $ 11,279 $ 3,841 $ 19,530 $ 5,107
=========== =========== =========== ===========
Net income per ordinary
share
Basic $ 0.02 $ 0.01 $ 0.04 $ 0.01
=========== =========== =========== ===========
Diluted $ 0.02 $ 0.01 $ 0.04 $ 0.01
=========== =========== =========== ===========
Net income per ADS*
Basic $ 0.28 $ 0.09 $ 0.53 $ 0.12
=========== =========== =========== ===========
Diluted $ 0.28 $ 0.09 $ 0.53 $ 0.12
=========== =========== =========== ===========
Weighted average
ordinary shares
outstanding
Basic 597,343,636 658,183,409 548,940,723 658,183,409
=========== =========== =========== ===========
Diluted 597,343,636 658,183,409 548,940,723 658,183,409
=========== =========== =========== ===========
*: Each ADS represents 15 ordinary shares
Revenue Breakout 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06
-------- -------- -------- -------- -------- --------
Design fees
International
customers $ 14,062 $ 12,203 $ 10,238 $ 9,166 $ 3,253 $ 5,519
Domestic customers $ 2,472 $ 2,872 $ 6,396 $ 5,610 $ 5,737 $ 7,151
Royalty
International
customers $ 181 $ 432 $ 387 $ 349 $ 454 $ 918
Domestic customers $ 2,189 $ 3,311 $ 2,792 $ 2,778 $ 638 $ 885
Component vendors $ 730 $ 670 $ 878 $ 955 $ 757 $ 394
Component products
Smart Phone $ 1,906
PCBA $ 271
Wireless module $ 59 $ 639 $ 1,375 $ 3,420 $ 1,304 $ 2,776
Other component
sales $ 1,787 $ 1,086 $ 1,242 $ 1,831 $ 689 $ 1,970
-------- -------- -------- -------- -------- --------
Total net revenues $ 21,480 $ 21,213 $ 23,308 $ 24,109 $ 12,832 $ 21,790
======== ======== ======== ======== ======== ========
CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In Thousands of U.S. Dollars)
For Three Months Ended For Six Months Ended
2005 2006 2005 2006
--------- --------- --------- ---------
Cash flows from operating
activities:
Net income $ 11,279 $ 3,841 $ 19,530 $ 5,107
Adjustments to reconcile net
income to net cash (used in)
provided by operating
activities (2,710) (831) (7,091) 10,354
--------- --------- --------- ---------
Net cash provided by operating
activities $ 8,569 $ 3,010 $ 12,439 $ 15,461
--------- --------- --------- ---------
Cash flows from investing
activities:
Deposit paid for acquisition of
and purchase of plant,
machinery and equipment (1,108) (416) (1,642)
Purchase of plant, machinery
and equipment (2,463) (256) (3,761) (1,496)
Purchase of acquired intangible
assets (221) (221)
Net proceed from sale of
marketable securities 4,160 4,160
Investment in an affiliate (1,243)
Proceeds on disposal of plant,
machinery and equipment 1
--------- --------- --------- ---------
Net cash used in investing
activities $ 1,476 (1,364) (238) (4,380)
--------- --------- --------- ---------
Net cash provided by financing
activities $ 89,258 $ 89,258
--------- --------- --------- ---------
Effect of exchange rate changes $ 196 $ 30 $ 650
Net increase (decrease) in cash
and equivalents 99,303 1,842 101,489 11,731
Cash and equivalents, beginning
of the period 37,272 147,096 35,086 137,207
--------- --------- --------- ---------
Cash and equivalents, end of
the period $ 136,575 $ 148,938 $ 136,575 $ 148,938
========= ========= ========= =========
CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of U.S. Dollars)
June 30, March 31, June 30,
2005 2006 2006
--------- --------- ---------
Assets
Current assets:
Cash and cash equivalents $ 136,575 $ 147,096 $ 148,938
Accounts receivable 16,430 24,220 33,704
Notes receivable 3,462 659 891
Inventories 5,434 6,010 6,369
Prepaid expenses and other current assets 854 1,405 3,105
--------- --------- ---------
Total current assets $ 162,755 $ 179,390 $ 193,007
--------- --------- ---------
Deposits for acquisition of plant, machinery
and equipment, and acquisition of intangible
assets $ 109 $ 1,021 $ 1,108
Plant, machinery and equipment, net 12,170 14,219 13,839
Acquired intangible assets, net 978 750 655
Investment in an affiliate - 1,243 1,243
--------- --------- ---------
Total assets $ 176,012 $ 196,623 $ 209,852
========= ========= =========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 2,631 $ 3,051 $ 6,249
Accrued expenses and other current
liabilities 6,226 9,203 11,583
Advance from customers 11,779 3,818 8,048
Profit tax payable - 54 69
--------- --------- ---------
Total current liabilities $ 20,636 $ 16,126 $ 25,949
Convertible notes $ - $ - $ -
Derivative liability - - -
Minority interests 2,973 2,865 2,234
Shareholders' equity
Ordinary shares 13 13 13
Additional paid-in capital 109,635 109,857 109,857
Accumulated other comprehensive income 24 1,910 2,106
Retained earnings 42,731 65,852 69,693
--------- --------- ---------
Total shareholders' equity $ 152,403 $ 177,632 $ 181,669
--------- --------- ---------
Total liabilities and shareholders' equity $ 176,012 $ 196,623 $ 209,852
========= ========= =========
Thanks for your good work.
Have the good weekend,
apish
If CEDA is eligible, please swap it for EZM.
Thanks,
apish
Len / cash to fully invested
_______________
"It only takes a few minutes to go from cash to fully invested once the dung settles."
Unfortunately that is not true for many of us who have 50 stocks. Not only is that a lot of stocks, but you have to determine where on the chart each is, what are the bids and asks, what is the volume, is there any consideration for capital gains, etc. That is why I began very early because I knew that for me to sell ON MY TERMS, it would take a long time to get out of the positions I had.
People waiting too long with microcaps with no volume and huge spreads will get obliterated if they try to unload a lot of stocks in a short period of time IMO.
Of course, this is why the MSGI's of the world have their advantage. Much more risk, but much more nimblisity (just made that up if you couldn't tell).
___________________________________________________________
___________________________________________________________
Thanks for your input, though I see it quite differently.
No one needs 50 stocks to become fully invested once the dung settles.
If one is all of a sudden bullish on small caps, snag a wad of IWO.
http://finance.yahoo.com/q?s=iwo
One can put a huge chunk of change to work in minutes. And it's much more diversified than 50 stocks.
If one still prefers individual stocks, one can then ease off IWO at one's leisure and have at it.
Good luck,
apish
Cash / MSGI
<If you are talking 85 of 89 VMC people, you will have a long wait. There are probably only one or two besides myself 100% cash. Even Len still has about 10% in stocks.>
I've been mostly in cash most of this year, and more than 95% cash most of the time the last few weeks. Currently a whisker away from 100% cash.
Very tough market. Top-notch traders getting burned daily with headfakes and whipsaws. I fully agree there's no reason one has to be invested at all times. It only takes a few minutes to go from cash to fully invested once the dung settles.
SSK
It's not my definition. It's StockCharts'.
Where's yours come from?
--apish
SSK re gaps
"An up gap forms when a security opens above the previous period's high, remains above the previous high for the entire period and closes above it."
KSW's high yesterday was 5.75 or so. It opened at 5.67 today.
How do you get a gap?
Just curious,
apish
R59
Not according to me. My post is a quote verbatim from StockCharts, with a link, going over gaps.
Good luck,
apish
Gap - Up/Down An up gap forms when a security opens above the previous period's high, remains above the previous high for the entire period and closes above it. Up gaps can form on daily, weekly or monthly charts and are generally considered bullish. A down gap forms when a security opens below the previous period's low, remains below the previous low for the entire period and closes below it. Down gaps can form on daily, weekly or monthly charts and are generally considered bearish.
http://stockcharts.com/education/GlossaryG.html
Len
Why not take a moment, a deep breath, and not be serious?
How are you doing ovetime in case of a tie?
I'm rooting for you,
apish
Elite Eight
Yo Len, where were the brackets to begin with?
How'd I get matched up against Wade (MOMO Master) Garrett instead of you?
Wade
Thanks for responding. As you've suggested, getting carried away cuts both ways. At 20% of net portfolio, substantially overloaded, I'd concur. Super overloaded, I'm not so sure.
Good luck,
apish
Wade re "super overloaded"
I feel compelled to inquire, whether out of casual curiosity or morbid fascination.
Are you on the margin? If so, to what extent of your buying power? If not, CFK stands as what percentage of your stock holdings?
Unfortunately, there's not much discussion here on position sizing. Since you let the cat out of the bag, what's your strategy on sizing?
Thanks in advance,
apish
Len
Thanks for the explanation.
May the change works out well,
apish
FWIW, I posted the following on the new portfolio board:
Is this really the best way to proceed? How was it decided?
_________
NEW VMC PORTFOLIO BOARD:
The purpose of this board is to have a home base for SSK's VMC portfolio of 100 stocks.
http://www.investorshub.com/boards/board.asp?board_id=5316
It has become clear that it represents our picks very well. His care in picking the stocks, the criteria that he uses and the interaction with this board as to what should be in the portfolio are all exactly what you would want to see.
Please bookmark this board. Another link to it is in the VMC Ibox.
Len
______________
Why does it need a home base? Why yank it out of context? It arises out of the main base. I believe it'll be reviewed more often by more people (with more interaction) if it stayed in the main base.
Just one ape's opinion.
Is this really the best way to proceed? How was it decided?
_________
NEW VMC PORTFOLIO BOARD:
The purpose of this board is to have a home base for SSK's VMC portfolio of 100 stocks.
http://www.investorshub.com/boards/board.asp?board_id=5316
It has become clear that it represents our picks very well. His care in picking the stocks, the criteria that he uses and the interaction with this board as to what should be in the portfolio are all exactly what you would want to see.
Please bookmark this board. Another link to it is in the VMC Ibox.
Len
______________
Why does it need a home base? Why yank it out of context? It arises out of the main base. I believe it'll be reviewed more often by more people (with more interaction) if it stayed in the main base.
Just one ape's opinion.
GBCS
_________
stanu78: re GBCS, scams like this happen all the time .... people 'in the know' accumulate shares of GBCS over many weeks ahead of the fraudulent PR .... they are in 'cahoots' with management of DLTT. The PR is then issued to cause a spike in the stock price thus allowing the shares to be sold at a substantial profit. Insiders at DLTT didn't do any buying but instead get kickbacks from those who realized the profits so that there's no paper trail .... very difficult for the SEC to prove anything illegal happened. And with OTCBB stocks like these, the SEC won't even bother !
_____________
I don't know anything about this stock, i.e., scam or no scam, but opted to check out the chart on the scam-accumulation notion.
For a 6-month daily, there's not much of a footprint. Were they walking on eggshells, except for November 22 or was trading that date driven by other news or possibly some other scam?
http://stockcharts.com/def/servlet/SC.web?c=gbcs,uu[w,a]dhcayiay[dc][pc9!c15!c20!c50!c100!c200!d20,2....
BRNC
Recent IPO. Driller with strong estimates.
http://stockcharts.com/def/servlet/SC.web?c=BRNC,uu[w,a]dhcayiay[dd][pc9!c15!c20!c50!c100!c200!d20,2...
http://finance.yahoo.com/q/ae?s=BRNC
When drillers come back (maybe as hurricane season draws near), this could run hard.
PS: It's got earnings, Len.
Good Luck,
apish
SSK / Thanks much for PSL2 without SUWN -- quite informative, no?
Way to go, Len!
Oh c'mon Stan
SUWN has been mind-boggling. Up 400% or more in a few weeks. I've benefitted almost as much as you from its inclusion. Several others froze it when it started to stretch standard valuation metrics based on current information. I suspect other folks look at performance so far and figure it's mostly about SUWN, and I'd concur.
My hat's off to you and anyone else who locks it in higher than I did. I just wonder about reality outside the SUWN freak show.
SSK / PSL2 curiousity:
Seems the leaders are all about SUWN gaming so far.
How would the standings look if SUWN was excluded? If it's too much work (subjective standard) to figure that out, don't bother; otherwise, the standings without SUWN might be equally, if not more telling, about luck or prowess for PSL2 purposes.
Keep up your good work,
apish
ESV / drillers / not a microcap
I think ESV is more attractive than PDC. Forward PE is about 7, with estimates rising at a much higher rate than PDC -- and without the negative of CHK dumping the stock and buying its own rigs. PDC's forward PE is more like 8, even with the stock in the freefall mode. Much more liquid -- and not (yet) technically broken down below 200-day, ESV is a component of OIH.
http://stockcharts.com/def/servlet/SC.web?c=esv,uu[w,a]dhcayiay[dc][pc9!c15!c20!c50!c100!c200!d20,2!....
http://finance.yahoo.com/q/ae?s=ESV
http://stockcharts.com/def/servlet/SC.web?c=pdc,uu[w,a]dhcayiay[dc][pc9!c15!c20!c50!c100!c200!d20,2!....
http://finance.yahoo.com/q/ae?s=PDC
Good luck,
apish
SUWN holders
Hat's off to you,
apish
Yes, SSK, thanks for keeping track. I didn't compete in PSL 1, but monthly results to date in PSL 1 suggested it was time today to lock in some weekly gains in PSL 2. 75% in 6 weeks doesn't smell sustainable.
SUWN
I agree 1.50 is possible, but I'm not going to bet it's there or higher on any close. I still hold some shares from .21.
I'd rather hear footsteps behind me than in front.
Good Luck,
apish
Let's trade SUWN for MCX.
Thanks,
apish
You're welcome bigpike. By the way your name cracks me up. I was about 10 years old in smalltown Michigan, fishing a pond with a buddy, we caught two bigpike, maybe 12 inchers, called the local paper, and the photographer came out and the paper soon published a photo of us holding our bigpike with bigsmiles. Must've been a gutbuster to anyone into serious fishing. At least they weren't two-inch bass.
Clowns to the left, jokers on the right, here I am stuck in the middle with you.
DD: http://www.towerrecords.com/product.aspx?pfid=1601540&from1=QUIA
R59 / EZM prior gap
<After all, the stock recently fell from $1.58 to $1.21 in a mere 10 days without there being a gap to fill.>
http://stockcharts.com/def/servlet/SC.web?c=ezm,uu[w,a]dhcayiay[dc][pc9!c15!c20!c50!c100!c200!d20,2!...
Appears to me that a prior gap at 1.19 to 1.21 was filled the other day.
OIH / wow
Thanks. You guys are fast!
Makes a big difference to know what's in OIH when earnings of a major component come out or for daytrading purposes.
Thanks again,
apish
OIH questions / R59, 10-bagger, anyone?
Which stocks are in the OIH basket and how are they weighted?
Thanks,
apish
Len,
Thanks. Okay. Cancel it. I'll wait for something better to come along. By the way, what inning are we in?
Good luck,
apish
Trade ACTU for EZM.
ACTU seems to be stuck in a trading range. EZM seems undervalued, in the midst of a stong uptrend, and under accumulation.
Thanks,
apish
SUWN.ob
http://stockcharts.com/def/servlet/SC.web?c=suwn,uu[w,a]dhcayiay[db][pc9!c15!c20!c50!c100!c200!d20,2....
No idea if party's over. Technically interesting. I suspect the trade(s) in the .90's are a misprint or goofball action, but still stuck with whatever the chart shows.
Arguably, bullish action for stock to bolt something like 300% out of its base, then retrace 50% and endeavor to hold 9-day. Could easily be construed as a flag formation, yet to be confirmed.
http://stockcharts.com/education/ChartAnalysis/flagPennant.html
I sold most of my stake around .80, expecting a pullback, but remain long on it in the go-for-the-gusto contest.
Good Luck,
apish
Bob
Thanks. But leadership? Easy come, easy go!
No tricks today, but snagged a wad of BJS on the pullback to the 50-day. Plan to add on any more weakness, then just sit on it til the height of hurricane season.
Good luck,
apish
SSKILL / Cancel SUWN freeze
Thanks for the explanation.
Sorry about the hassle,
apish
Liquidity Issue / Suggestion
On another board, we had a weekly stockpicking contest. I think it worked out well. Bobwins won more than his share of medals. I wouldn't call it the Bobwins Rule, but some of his picks were somewhat illiquid.
We ultimately decided on setting a minimum ADV (average dollar volume) of something like $100,000 to $200,000, i.e., average daily volume (50-day average) times share price, because we wanted stocks that were at least somewhat tradeable.
That board was private, had 20 to 30 members. Weekly picking requires more liquidity than 3.5 month contests. Then again, this board is public and has who knows how many lurkers preying upon top pickers' picks. I don't think it would be a bad idea in the next contest to require that three picks exceed $250,000 (or more) ADV.
Just one chimp's opinion.
Question about closing price rule
"If the next day's first trade of a stock (buy) is higher than the previous close on no news (as was the case with ISSG yesterday), then the buy price must be at the first trade (higher) price. If the next day's first trade of a stock (sell) is lower than the previous close on no news, then the sell must be at the opening (lower) price."
What's the rule on closing prices if there IS news?
Thanks,
apish
Freeze SUWN
Sold most today at about .80 ave. Got in around .20.
http://stockcharts.com/def/servlet/SC.web?c=suwn,uu[w,a]dhcayiay[db][pc9!c15!c20!c50!c100!c200!d20,2...
Uptrend remains intact to my amazement. Looks like momo's want to drive it above a buck to make the stock seem more "respectable."
Would not freeze it if contest ran longer.
Good luck,
apish