Geong Share Discussion Threads

[mudbath] 21/10/2014 12:52

I had already sent Finn a good kicking via email.
I also asked to be provided with 2014 detail of new clients,rather than the regurgitated pair from 2013.

[rivaldo] 21/10/2014 11:25

LOL, good spot. I wish the similarity had been pointed out before the conference call - when exactly did Hubei and Huaxia become new clients then?!

They've obviously just used last year's template and updated the numbers in a hurry without looking very hard at the narrative. Typical GNG to put their foot in it - and the NOMAD should be kicked too for not realising.

[mudbath] 21/10/2014 10:24

At the AGM of GEONG International Limited (AIM: GNG), the AIM listed, China
based provider of enterprise content management ("ECM") software and solutions,
held on October 20th 2014, Henry Tse, Chairman of the Company, made the
following REMARKABLE statement:

"Since the completion of the financial year ended 31 March 2014, we have
continued to focus on winning SaaS business. Since the start of the year we
have gained two new SaaS clients in the second tier of the banking sector: Bank
of Hubei and Bank of Huaxia. On SaaS business for existing clients, we are
providing solutions for digital marketing, E-commerce and customer experience
management. The Board sees significant opportunities for H2 and hope to
announce further contracts in due course.
We have previously stated our intent to monitor trade receivables carefully and
with a focus on increasing collection. Steady progress has been made with this
and we expect that total trade receivables and accrued income at 30 September
2014 to be slightly lower than at 31 March 2014. The cash collection for the
period from 1 April to 30 September 2014 was around £3.8m which was in line
with our expectation.
The Company had net cash (i.e after taking account of the £1.0 m of convertible
unsecured loan stock) of £2.7m as at 30 September 2014.
The Company will provide a detailed interim trading update in mid November and
expects to announce interim results for the six months ending 30 September 2014
in mid Jan 2015, which we expect to be in line with our expectations."

Why REMARKABLE,one might ask.

Well tt the AGM of GEONG International Limited (AIM: GNG), the AIM listed, China
based provider of enterprise content management ("ECM") software and solutions,
held on 26th September 2013, Henry Tse, Chairman of the Company, made the
following statement:

"Since the completion of the financial year ended 31 March 2013, we have
continued to focus on winning SaaS business. Since the start of the year we
have gained two new SaaS clients in the second tier of the banking sector: Bank
of Hubei and Bank of Huaxia. On SaaS business for existing clients, we are
providing solutions for digital marketing, E-commerce and customer experience
management. We see significant opportunities for H2 and hope to announce
further contracts with our next trading update.
We have previously stated our intent to monitor trade receivables carefully and
increase collection. Steady progress has been made with this and we expect that
total trade receivables and accrued income at 30 September 2013 to be slightly
lower than at 31 March 2013. The cash collection for the period from 1 April to
30 August 2013 was £3.5m which was in line with our expectation.
The Company had net cash (i.e after taking account of the £1.0 m of convertible
unsecured loan stock) of £2.9m as at 31 August 2013.
The Company will provide a detailed interim trading update in early November
and expects to announce interim results for the six months ending 30 September
2013 in mid-December 2013, which we expect to be in line with our expectations.

REMARKABLY UNIMAGINATIVE,at best.

[mudbath] 20/10/2014 20:25

Over the years Geong has been analysed to death, and then some,and then some more.
As it is broadly in the same shape as when investors were eulogising over its prospects and paying tenfold the current price for its shares,then yet further re-examination would seem futile.
It's more a case of,"are you feeling lucky punk".....which I do .

[eacn] 20/10/2014 17:00

Rivaldo,

The Chairman appeared at one point to say that the CULS would be repaid by the year end, but then retrenched to his earlier formula that the company would not breach the terms of the Hanafin agreement. On that basis I remain to be convinced that the CULS will be repaid in full by the year end.

On the SaaS side I noted that the CEO spoke of a target of 50% in two years, rather than the 60% suggested by the questioner.

The responses given failed to reconcile how cash collections were £3.8M, debtors fell by £2M and yet turnover was broadly in line with previous H1's. My conclusion is that they must have written off or impaired certain debtors.

A number of questions included statements of the form that accrued income had been hanging around for 5, 6 or 7 years. While I have pointed out before that accrued income is almost exactly equal to the sum of historic profits, this does not mean that the accrued income number is an accumulation of debts built up over many years.

By way of illustration if turnover is constant at £10M and 60% of turnover is from IaaS projects whose average duration is 2 years and the work cannot be billed until completion, then you would expect accrued income to be steady at £12M.

Last year we had roughly 3 years of project income backed up and this has now fallen to under 2.5 years. The board is saying their target is to reduce this to under 1 year. Given that these projects appear to last for a couple of years, to meet that target they will need to cut back on their IaaS projects to a much greater extent than suggested by the 50% SaaS target. I remain sceptical that they can achieve this while remaining 'profitable'.

[mudbath] 20/10/2014 14:08

Exactly 12 months ago,the price of Geong shares spiked upwards ,peaking at ten pence.Should the GNG share price exhibit a similar pattern over coming weeks, longer term holders will feel appreciably reassured,particularly if,as seems eminently possible,the upward momentum is maintained beyond that last November 2013 high.
As rivaldo observes,(whether one is a dreamer or a realist)the actualities and the potential evident within recent Geong reports, are "not bad at all for a £1.3m m/cap company".

[rivaldo] 20/10/2014 10:44

Interesting AGM conference call. Good aggressive questioning from everyone on the main issues, and some intriguing answers.

- GNG confirmed they intend to repay the Hanafin loan by the 31st December
- total debtors will "definitely" be reduced at the year end, and my impression was that the reduction may be some £2m or more
- SaaS sales should be at 40% or more of turnover by the year end
- in the next 24 months they aim to get SaaS sales up to 60%, and total debtors down to £10m (£5m trade and £5m accrued income)
- H1 sales are less than the £3.8m cash inflows, which explains why debtors have reduced. But GNG are confident in the year end outcome given the order book, client wins etc, explaining the sales reduction from last year as due to the volatility of H1 and its seasonality

It remains to be seen whether these aims are achieved. Talk is cheap :o))

Certainly if the Hanafin loan is repaid and then debtors are steadily reduced to £10m the share price will be a lot higher than the current £1.4m m/cap.

[augustusgloop] 20/10/2014 07:34

I don't see how debtors can be falling when the 6 month cash collection is so much smaller than the 6 month turnover.

Unless they have written a few million off.

[rivaldo] 20/10/2014 07:29

That's actually a reasonably decent AGM statement today:

- the seasonally weaker H1 in line with expectations
- £2.7m net cash, up from £2.4m at 31st March, when H1 is normally poor for cash flow
- debtors continuing to fall, again despite H1 being poor for cash flow
- winning SaaS business for new and existing clients in the core banking modules plus in "marketing, E-commerce and customer experience management"

Not bad at all for a £1.3m m/cap company.

[sir rational] 16/10/2014 21:15

Wait for 7.5p

[mudbath] 16/10/2014 11:33

Buying at sub 3 pence works for me.
As I never feel particularly comfortable holding GNG,an early exit on the next upward spike will suffice.

[sir rational] 02/10/2014 20:00

Need to keep a sense of proportion, chaps.

[mudbath] 29/9/2014 17:41

"Over and out", is a very fair summary rivaldo.
Possibly worth adding to the header.

[sefton1] 29/9/2014 16:22

Not only a complete dope but also a blatant liar too. Get a life augustdope, cos you desperately need one.

[augustusgloop] 29/9/2014 16:05

rivaldo,

if its a scam - like I believe - then buying shares in a placing is of no consequence.
They just take the money back out of the company immediately.

Buying in the market would be completely different.

The salaries are inconsequential - if its a scam then they have other ways of getting money out.

Especially here were the accounts show $20+m of work done that has not been paid for.

RED FLAGS everywhere!

[rivaldo] 29/9/2014 15:09

Apologies for interrupting this love-in (!), but just for completeness:



- the CEO buys £40,000 of shares at 65p in a placing
- the Chairman buys £65,000 at 65p in the same placing



- the CEO buys £80,000 of shares at 38p in a placing
- another director buys £23,000 of shares in the same placing

It's worth remembering that at these times the TOTAL annual wage bill for all of the GNG directors combined was around £150,000. Some time on (from memory) it's probably now only £200,000-£250,000.

There are plenty of things to moan about with GNG, but directors' salaries and interests in shares are not worthwhile targets imo.

Over and out :o))

[sefton1] 29/9/2014 14:38

LOL, augustdope the birdbrain

[sefton1] 29/9/2014 14:30

Well you would say that, wouldn't you. It is obvious that you desperately need to get a life so make a resolution today and try to get one

[augustusgloop] 29/9/2014 14:22

Sefton,

excluding shares being swapped between directors (which obviously doesn't count) - the director dealings that you linked to were for less than £30k = peanuts.

They can blow more than that on a party.

[augustusgloop] 29/9/2014 13:53

The fact that the directors hold shares is irrelevant.

They didn't actually pay for them.

[mudbath] 29/9/2014 13:44

I bet the Directors wish they didn't !