J Sim, TBYH has no IR firm representation at present, and without any PRs, there isn't much to attract new investors. I'm sure that there were a few of the existing investors that sold when it became clear that there wasn't going to be a Q2 PR.....
The pop that CKGT experienced today was directly related to new investors discovering the story. TBYH has some decent appeals, with strong top-line growth of 30% and its exposure to 3G development in 2007. However, its falling margins hurt eps growth in Q2, and that 30% growth only translated to 10% eps growth.
Perhaps margins in Q3 will be better sequentially if they have a higher percentage of new design work (quotes from the Q2 for qtr ending 9/30/06):
"Some of our popular models such as series 9701/9702, 9109, 9110, along with new solution of 9501, are still selling well. A large portion of our royalty fees, which accounted for about 77.1% of our design fee revenue, was generated from these models. Therefore, some of the customers are shifting their new phone design orders to the Oct-Dec quarter when it is the holiday peak season. Extended solutions of these models will be introduced to the market in about 6 months."
and
"On the other hand, during the quarter ended September 30, 2006, we introduced three new design solutions of 9501, 2702, 2708 series to the market place. We have withheld the development of other three new model series because we believe one of our chipset platform providers may shift its business focus from baseband digital signaling business to other products. We have been actively looking for new partners since June 2006 and started cooperation with VIA Technologies Inc. Ltd. to develop mobile handsets for china market. Solutions based on VIA solutions have been completed in October and products will be sold in November 2006.
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Seems to me that some of the higher margin work got pushed into their fiscal Q3. Plus, that time of the year seems seasonally stronger, so that should help sales as well.
AI
