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8telecom: Victorian's2nd recovery rally pick
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victorian2
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03-Oct-2007 12:45
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Farmer, that's the whole idea..... not to have impressive results by hiding the profits through various ways... ie CAPEX, write offs/write downs on the balance sheets etc. Trick is to look carefully into the financial statements Many of these counters have huge ongoing accumulations for periods of time & rely on these "unimpressive" results to keep the share price low for accumulation purposes. Once they're ready to blow the lids........then they start. Sub-prime actually put a lid on many of these counters that were looking set to run (cheong) in August but got wack back prematurrely. but no choice still have to announce their good set of results or new share placements. Some of those that ran really well during that July/Aug which I benefited were East Tech, Metal Components, Guangzhao, Nippecraft, Sim Siang Chon, Casa., PTCL, Eng Kong. I got caught with Oniontech (this one off my list), PNE Ind, CEI (collect divi), Allied Tech (lucky got huge dividend & rts....huge accumulation going on in this one), Action Asia (damn bullish on this one) and of course 8telecom. They will run when they are ready esp in the next 3-4mths once the blues take their break..... Citiraya was a huge scam to begin with so very little basis for comparison. |
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Farmer
Master |
03-Oct-2007 10:40
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To be fair, in such a bull market esp. China, the results aren't that impressive after all. Nevertheless, I observed that Victorian2 is very much active in his post and update on this counter, have to give him a credit for that! However, I also can recall a few years back there's this company call Citiraya whereby there's an extraordinary push by an extraordinary forumner with some "very insider" infos and predictions not long after its IPO. But once the share starts to "cheong", this ExOy person suddenly disappear and eventually, Citiraya was suspended at a high of $1.08. I believe some of you might still remember this painful incident. This is just a gentle reminder to all but its doesn't meant to offend anyone. Cheers! |
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victorian2
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03-Oct-2007 10:03
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To give forumers here a good idea on how 8telecom is investing heavily for future growth..... It's 2Q FY07 vs @2Q07 revenue was 105m vs 57m (+82%) COGS was 83m VS 43m (+89m) Net profit 4.7m vs 3.9m (+21%) The cost of sales is large........but if one looks at the investment cashflow under the cashflow analysis, the company incured a 24m purchase of propery,plant and equipment ie CAPEX vs just 1.9m in 2Q 2006. If there is expense off policy for a certain portion of the 24m, there's quite bit of profits that the company is hiding for the future.......quarters so Q3 and Q4 is likely to surprise as the company moves into 3G license announcement period which would see accelerated 3G infrastructure investments.......that's probably why instittional investors bought 6% at 17c.... Here is their 2Q results from SGX http://info.sgx.com/webcorannc.nsf/0357d11048060bb84825735f0028e25b/882b0ac3c6f37add48257337002f7fb3?OpenDocument Coy's 2Q press release and chairman's open market purchases inAugust http://info.sgx.com/webcorannc.nsf/New+Announcement+Last+3+Months+by+Company+Name?Openview&RestrictToCategory=0-98TELECOM%20INTL%20HOLDINGS%20CO%20LTD |
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victorian2
Senior |
03-Oct-2007 09:01
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Lifted from China Mobile's biz review for FY 2006.For the 6mths of 2007, China mobile just added another 60m subscribers to networks to 330m. Both contract & prepaid. Looking at its numbers, the growth of non-voice & SMS rev.....ie ringtones, MMS, data is growng in high double digits of 50-75% annually just from China Mobile..... Amazing. Looking at the CAPEX slated for commitement in the coming 3 years, 99.8-98billion annually for 2007-2008 with a portion on "The capital expenditure for the next three years will be used mainly for the construction of GSM networks, support systems and transmission facilities, and for the development of new technologies and new businesses." Barring the non-issurance of 3G licenes by the govt before the Olympics, a significant investment in 3G infrasructure in the coastal provincial cities will benefit players like 8telecom as seen in its 6mth numbers and this is just china mobile.....there are still 3 other players... --------------------------CAPITAL EXPENDITURE In 2006, the Group experienced rapid growth in its customers, voice usage volume and all types of business. In order to seize market opportunities, satisfy business needs and ensure network quality and return on investment, the Group's capital expenditure in 2006 was approximately RMB87.0 billion. The capital expenditure was mainly used for the development of GSM networks, the addition of equipment such as base stations, the expansion of coverage and capacity, the refinement of networks for value-added business, the reinforcement of the support system capacity, therefore, securing steady increase in revenue and profits.
In view of the momentum of the rapid growth of the Chinese economy, the citizen's increasing spending power, and the nation's development of "informationalization", the Group's business will maintain its rapid growth momentum in the next three years. In order to satisfy the vibrant market demand, promote the continuous development of value-added business, maintain the leading position and competitive advantages of the network and meet the new tide of technological evolution, the Group's capital expenditure budgets newly set for each of the three years from 2007 to 2009 are RMB99.8 billion, RMB98.0 billion and RMB96.0 billion, respectively. The capital expenditure for the next three years will be used mainly for the construction of GSM networks, support systems and transmission facilities, and for the development of new technologies and new businesses. The required funding will be sourced largely from cash generated from the Group's operating activities. FUTURE BUSINESS STRATEGIESLooking to the future, the Group will fully develop the growth potential presented by the new customers, value-added business and voice usage volume as well as largely explore the markets in rural areas by leveraging and consolidating its competitive advantages in terms of its scale of operation, networks, support system, brands, marketing and sales channels, and provision of service on an ongoing basis so as to maintain its market leading position in the mobile telecommunications market. The Group will bring innovations in the provision of services, business, technology and management so as to further develop its multi-media communication service and become the mobile information expert, and will commit itself fully to servicing the 2008 Olympics and prepare itself well for the new generation of mobile telecommunications network and technology so as to take its business into a new phase in the future. |
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victorian2
Senior |
02-Oct-2007 17:40
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Nice healthy pullback to keep a lid on prices & allow continued accumulaton. 2 large300lots selldown at 15.5 and 15c to keep prices steady at 15c throught the day. 14.4m done in the last 10 trading days excluding today.....serious accumulation going on quietly... 1.46m done @ buyer price and 0.66m@ seller price today to close at 15c. 2c off NTA price so premium is small. |
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Centaur
Veteran |
02-Oct-2007 11:11
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might as well, was thinking of transfering funds from other counters to this one.. don't move up so fast, wait for meeeeeeeeeeeeeeeeeeeeeee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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victorian2
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02-Oct-2007 11:04
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A pullback this morning. Healthy pullback considering up 3c in 5 trading days. Buying still strong at 0.145c. Doesn't look like anyone wants this counter to move as yet......... |
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victorian2
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01-Oct-2007 22:38
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gap up today to 15.5c. Counter has been moving upwards very quietly in the last few days. Just a quick recap: 26.3m done since August 7 or 30 trading days ranging from 16c to 12.5c to present 15.5c. Last 10 trading days alone accounted for 14.3m. Quite a bit of re-accumulation going on from weak holders when it was trading above 20c when lots of activity after announcement of entry of institutional investors buying 27m shares at 17c. 88m shares traded from June to early august from 18-21.5c. It'll be a rough ride back to 20c but nonetheless a easy one as the expected 3G launch date will be soon & that would be a confirmation of the huge growth in the next 2-3yrs for 3G infrastructure investment which 8telecom will benefit tremendously ie. Transmission Towers & local 3G handsets that the coy is focusing on. Their numbers in the last 6mths show huge growth in rev. Read the article that was published in July on the 3G potential but also its potential bottlenecks. --------------------------------------------------------------- Monday, 01 October 2007 Government Drives 3G Wireless Transition in China, Says iSuppli Wednesday, 25 July 2007 http://circuitsassembly.com/ The Chinese government is offering 3G licenses to the four state-owned telcos ? China Mobile, China Unicom, China Telecom and China Netcom ? as incentives, if they are willing to accept reforms, according to iSuppli. The National Development & Reform Commission believes a fundamental restructuring of the nation?s telecom industry is essential to promote the long-term growth of the country?s fixed and wireless core communications networks, says the firm. Much of the responsibility for reforms reportedly can be attributed to China Mobile. The company has a near monopoly in China?s mobile communications market with $37.8 billion in revenue, accounting for 76% of the nation?s total mobile communications revenue. China Mobile also had a net profit of $8.5 billion last year, which is 10 times the profit of China Unicom, three times that of China Telecom and six times that of China Netcom, says iSuppli. iSuppli says China?s core fixed and wireless networks are transitioning to IP-based next-generation networks. Furthermore, increasing numbers of media gateways and servers will allow China?s telecom networks to deploy advanced support services, video content distribution and online gaming. Mobile handsets will have to incorporate more advanced multimedia capabilities and open operating systems, according to the researcher. Releasing 3G licenses in China has become a political issue, says iSuppli. The biggest barrier to introducing 3G services is the high level of licensing fees that must be paid by Chinese operators, mobile infrastructure suppliers and handset manufacturers. Much of the postponement is coming from the Chinese government, which is still negotiating with companies such as Qualcomm and Siemens, which own many of the 3G technology patents, adds the firm. iSuppli believes China will issue three licenses during the first half of 2008, and is certain that China Mobile will be given a license to deploy TD-SCDMA networks. China is not expected to deploy more than three national 3G networks, as regulators aim to reduce capital expenditures through base-station site-sharing arrangements, as well as radio access network and core-network sharing. iSuppli forecasts that China?s TD-SCDMA 3G subscribers will jump to 28 million by 2011, up from 1.1 million subscribers this year. By 2008, 3G subscribers in China will reach 6.4 million. For each of these subscribers, a new mobile handset will be required, offering a selling opportunity for many companies inside the wireless telecom industry. |
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victorian2
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20-Aug-2007 02:20
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Went through its results..... 100% rise in top-line for 2rd Q and 20 odd % rise in net profit. growth momentum for the rest of the quarters are in tact. 1st Q results no fluke. Panic selling in the last 2 days driving price below NTA of 13c. Now is the best time to buy. Hope the last 2 days were ones of critical selling.... and any meaninful rebound is dependent on how deep the critical sellling is..... counter drop 4c in 3 days with under 1m done or 300 lots per day. |
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Centaur
Veteran |
17-Aug-2007 13:52
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Whoa, this counter hitting 11cts.. Whats happening?? Ok to accumulate more under current market conditions or better to wait? Wat you guys think huh? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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victorian2
Senior |
11-Aug-2007 00:40
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1234567, 1st quarter FY07 is out. Not 2rd quarter. Should be very soon. type error. sorry. Kilroy, I agree. I believe there will be more downdraft to keep the price rangebound during this weak sentiment period. Anything below 15c... just above the 13.5c NTA is a fantastic price to accumulate for a growth stock with huge barriers of entry in the China 3G market. |
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1234567
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10-Aug-2007 23:44
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hi victorian2, shouldn't it be 1st half result rather 2nd half result ? i went to sgx website and noticed its last financial year end december 2006. So, if this is truth, we should be looking forward 1st half result FY2007 (ie. june 2007), correct ? Sorry if i'm wrong. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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KiLrOy
Master |
10-Aug-2007 23:33
Yells: "I buy only what I can see." |
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My take is there may be still a possibility of downward price action though I wont rule out 0.15SGD as the immediate physiological support for the next few sessions. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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mediacraze
Member |
10-Aug-2007 23:17
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Hi victorian2 Thanks for highlighting and sharing this counter. Good fundamental and potential is there after the beat down for this 2 week. Will be looking to vest in this baby coming monday. |
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victorian2
Senior |
10-Aug-2007 22:42
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I made money from 8telecom from 16c to 21.5c in one its major breakouts. I proceeded to accumlated the stock heavily from 19c to 21.5c after the announcement of the entry of instituional shareholders at 18c. I'm waiting for the dusk to settle plus 2nd half results but it's a safe price for this beaten down gem..... foreced down by internal BB. Can see the vultures waiting for kills below 15c. Hope this helps |
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lesmay
Member |
10-Aug-2007 22:17
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hi, may i know what's your entry price for 8telecom? I'm holding quite a fair bit at $0.205 which is deemed too high and trying to average down my costs. Hopefully will get in next week when the sky is clearer. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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victorian2
Senior |
10-Aug-2007 21:49
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8telecom. In oversold territory as with many other stocks. Stayed rangebound between 15 to 15.5c with 720 lots done to closed upchanged. Unaffected by meltdown. 0.495m@ buyer price and 0.225m@ seller price. Bottom fishing buy quotes of 0.5m at 0.14 to 0.145c. Close to NTA price. This is as low as it gets for now during this period given its growth stock status. happy vesting...... waiting for 2nd half results. |
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victorian2
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09-Aug-2007 22:40
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8telecom: Part III: Conclusion & recommendations Recommendation a. A 10-year old company which holds patents and proprietary technologies that is important in an industry like telecommunications due to the technology-scape of the sector. Thus, with the patents and proprietaries, 8Telecoms has relatively barricaded others to entry. b. Revenue growth has been on an increasing trend. However, net earnings have been in decline since FY04. Margins were good in FY04 only to face a drastic drop to the single digits for net margins in FY05 & FY06 from a high of 22.9% Looking at the NTA, the company is not cheap to purchase while management?s creation of shareholder?s value is not satisfactory since for every dollar of equity capital, only earnings of 1.4cents is generated. The 3G story and actual acheivements as seen in the 1st quarter results maybe the tunring point in terms of earnings growth after 2 years of unsatisfactory growth. c. Net operating cashflow has been increasing through FY04 to FY06 which is a good indication that management have been able to convert earnings into cash while net cashflow have been volatile. d. The individual shareholders has taken up a much larger position compared to the institutional/brokerage funds in FY05 with the free float at 62.851m vs 63.759m, with the same number of shares for 2 consecutive years. The vendor sale of 27m shares to institutional investors and high network individuals seem to be a key potential future catalyst for future share price movement adding in more depth of blue chip shareholders. Thanks to Rosanne for her excellent 1st cut coverage of 8telecom as of July for me to add on and make the necessary add ons. Vested and all the best. |
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victorian2
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09-Aug-2007 22:38
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8telecom: Part II Shareholder Structure/changes and trading vols/patterns since 16 March 07 1 Year Stock Price 6-mth Stock Price High: 0.205 High: 0.200 Low: 0.060 Low: 0.085 Shareholding Structure/Composition 16 March 2007 07 March 2006 Size of Holdings No. of No. of Shares No. of No. of Shares Shareholders Shareholders 1-999 - - - - 1,000-10,000 612 2,709,000 663 2,932,000 10,001-1,000,000 786 64,049,000 846 63,272,000 1,000,001 and above 16 412,146,250 17 412,700,250 Total 1,414 478,904,250 1,526 478,904,250 16 March 2007 07 March 2006
Key salient observations from March 16th 2007. a. Major changes in shareholder structures in the top 20 with 11 new top 20 shareholders. 5 Existing shareholders also adding new shareholdings b. Freefloat as of march 16th was 62m. From then to present 8 August 2007, 170m shares was traded this 4 1/2mths with 4 whipsaws/false breakouts from 14c to 22c. c. Entry of institutional investors at 18c on July 4th taking 26m shares from vendors. d. in the 4 sell downs in the last 2 weeks, bulk of the selling has taken place and volumes in the last 4 days have been just about 2m or 500lots per day. The aimless drifting also shows clearly stock is cornered so BB will just take advantage of poor sentiment to drive prices down to forced further panic selling etc. f. OCBC securities has provided a 4.7m financing quota for 8telecom while UOB Kayhian a C grading hence single counter limits per margin account is $1m. As with Action Asia, that?s a lot of firepower for holding purposes. See public announcement on sgx website below on 5.64% or 27m vendor sale. http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_8B47F113C87231CB482573100022D58B/$file/8Telecom_Press_Release.pdf?openelement |
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victorian2
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09-Aug-2007 22:35
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8telecom: Part I. Coy, financials I?m starting coverage and daily/weekly commentaries on 8telecom. One of my growth stocks that I see in the league of SMB with the right timing in the next few months as the float tightens and sentiment improves. It had recently announced institutional investors taking a 6% at 17-19c stake in the company on the 4th July. As with SMB after the announcement of a vendor sale to instutional investors, the stock hover for close to 2 mths before taking off from 34c to 50c high. I expect 8telecom to behave no differently given its 5year high in 2003 was 32c so there will be some rough ride upwards in the quest to clear the stale bulls in light of the softness of the markets in the coming weeks if not months. Excesses have to cleared off from the financial mess from subprime etc before the real markets from the goods and service segment takes over? Description The Group's principal activities are manufacturing and selling communications materials and providing installation services for various telecommunication engineering products. Other activities include manufacturing and installing telecommunication and other towers, constructing telecommunications pipes network, designing, integrating and installing hardware and software, and investment holding. The Group operates in China and supplies key tower communication to all the major telco providers China Telecom, China Unicom, China Mobile, China Netcom. The company?s major growth area is the installation of 3G towers in support of the major roll out of 3G services by the major telcos prior to Beijing Olympics. For the latest 1st quarter, the group reported a large 152% growth in turnover resulting from huge orders in the telecommunications tower segment as well as a scale up in the Telecommunications Electronics Manufacturing Services (TEMs) operations on the back of the impending 3G launch in China before the Beijing Olympics Financials
------------------------------- Commentaries The company has highlighted in the 1Q results commentary the production capacity of the TEMs segment has been tripled and the group plans to double the production capacity of its telecommunications tower segment to cater to the increasing demand. This explains why the cashflow has turned negative as compared to 2 years of positive cashflow as the company has started CAPEX activities in the last few months to support the huge 3G equipment required by their customers. Debt levels have gone down from positive cashflow used to pay off debt. The increasing CAPEX requirements bodes well for the coy?s growth in both the top-line & bottomline.
Ye TianYun (Chinese) - Executive Chairman & CEO - Founder of 8Telecom; 1997 - Qualification: Bachelor Degree (Computer Science & Technology); Technical Economics and Management (Business Adminstration) - Executive Director; appointed in October 1998 - Qualification: Bachelor Degree (Business Economics); Technical Economics and Management (Business Adminstration) - Executive Director; Appointed in August 1998 - Qualification: Bachelor Degree (Business Adminstration), (Computer Science & Technology) - Executive Director; Appointed in April 2001 - Qualification: Bachelor Degree (Technical Economics); MBA |
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