Software Circle Share Discussion Threads

[gazza102] 02/8/2009 20:56

This company has great potential. I think it could be a big earner in five years. If only the SAT roll out would get the go ahead again.

[zangdook] 31/7/2009 11:46

Acquisition, sounds good, plenty of cash to do it with. How about a jump up?

[gazza102] 10/7/2009 11:25

Like wise a little selling doesn't take much to move this down. Long term holder by the way.

[boadicea] 10/7/2009 10:33

Yes - Possibly re-investment of the recent dividend plus a realisation that it pays a lot better than money in the bank.

[fatfish] 10/7/2009 09:35

a little buying this morning doesn't take much to move this one

[hugepants] 02/7/2009 14:27

Incidentally speaking of amazingly cheap on fundamentals. Taihua(TAIH) results were out on tuesday.

TAIH share price is 8.25p

Full year earnings = 1.2p
Cash = 9p
net working capital = 12.5p

[hugepants] 02/7/2009 14:23

SFT is amazingly cheap on fundamentals. Was hoping to pick up more at 4.5p but looks unlikely now.

[boadicea] 30/6/2009 09:08

"Management is confident .... that trading for the full year will broadly in line with 2008. "

To refresh memories, that was eps of 2.07cents (US) or ~1.3p assuming £1=US$1.60

If that can be achieved and we are now in the trough it leaves the share price looking reasonably cheap and presumably still paying a similar dividend (0.31p). It also remains generously funded in relation to the size of its operations.

Hence I feel no impetus to sell but don't expect to see any great advance until an upturn becomes apparent in the figures.

[apetley] 30/6/2009 07:21

Sinosoft Technology Trading Update



TIDMSFT

RNS Number : 7318U
Sinosoft Technology plc
30 June 2009

?
Embargoed: For release at 7am, 30 June 2009
SINOSOFT TECHNOLOGY PLC
"SINOSOFT" OR THE "COMPANY"
TRADING UPDATE
Sinosoft, the China-based developer and provider of software and IT solutions to
Chinese regional and national government agencies and export enterprises, is
pleased to announce an update on trading prior to the Company's half-year end on
30 June 2009.
As previously stated, Sinosoft has adopted a strategy of broadening the base of
the overall business and this remains the focus for FY2009. Sinosoft's revenue
continues to be weighted to the second half and whilst contract delays and
deferrals have resulted in revenues being slightly down in the first half of
2009, the pipeline for the second half is strong. Management is confident that
many of the deferred government contracts will commence in H2 and that trading
for the full year will broadly in line with 2008.
The Company continues to grow beyond Jiangsu province and it is pleased to
announce that it has recently won a new contract worth approximately US$0.2
million to supply its e-government software to Nan An, one of the 12 major
cities in Chongqing, the largest and most populated municipality in China.
Sinosoft will create and install a system to enable people to submit reports and
application forms such as public housing forms and marriage application forms,
remotely to any government departments within Nan An. The system will then
route the information to the applicable government department for processing. We
expect work to be completed within the next three months.
This contract is an important step forward for Sinosoft's e-government division
because it is the Company's first move into south west China where it is
believed by the management that there is significant potential for the Company's
products.
Elsewhere, the Company has recently signed a contract to provide e-government
products to Ning Xia province. In order to reduce corruption in the government
approval process for applications submitted by citizens requiring various
permits, Sinosoft will be supplying software to help the provincial
government ensure that each department is following the stated procedure for
their different roles and proper authorisation is obtained for each step of the
approval process.
We are currently in advanced discussions with a top PRC software company, for
the provision of our Skytech Reports Software, which was developed in 2008 as an
e-government product. There is further potential for this product to be supplied
to corporate sector clients.
In June 2009, the Company entered into a two year outsourcing contract to
collaborate with Singalab Pte Ltd, a Singapore IT company in the provision of
programming and coding work for a project they are working on. In the initial
phase of the contract, two engineers will be stationed in Singapore for a month
while 12 other engineers based in PRC will provide additional technical support.
It is expected that the number of engineers will gradually increase as the
project progresses. By collaborating with Singalab, there is potential for
Sinosoft to expand its outsourcing business.
During this relatively quiet period in terms of roll-out of the SAT, the Company
has been improving the functionality of its export tax software and creating a
number of bolt-on services for existing users in Jiangsu. By working on these
improvements, Sinosoft has a more comprehensive suite of products in
anticipation of renewed demand once exports in China start to recover and the
economic environment is more stable.

-Ends-

[explorer88] 07/6/2009 20:56

I see Guy has bought another 1,410,000 shares in SFT :-)

[explorer88] 26/5/2009 11:47

net assets £16m
market cap. £ 9m

one week to go to buy SFT and get 0.31p / 5%+ final dividend ;-)

[buggy] 16/5/2009 12:59

HugePants,

Not exactly rocket science to deduce that,

In the released annual reports the following are the contributions to annual profits.

Tax Software=25.8%
Syst Integration = 31.2%
egovt = 22.4%
Info Integration = 20.6%

Now the System Integration is a direct dependent of the sale of the Tax Software. >>> {... from accounts ".....Sale of add-on services contributing strongly to tax software revenue growth..." >> [Hence we can say that Tax Software dependent earnings = 57%.]}


Information Integration:

......However with the impact of the financial
crisis being felt across many industries and countries, we are expecting some
delays in projects in this area as corporate clients start reducing their IT
spending. ......


e-Government:

......this division has experienced a negative growth....... The
decline in turnover is a result of a number of local and provincial governments
suspending discretionary spending until FY2009 due to the current financial
crisis.


General Competitive climate for SFT:

With all due respect to Chinese software advancement or technology, the rest of the software being offered by SFT has a ready and more capable alternative already available which are all localized .. made to fit chinese market , language etc.

If some company is looking for the best product to do a job SFT will not be the option.

If they did not have the SAT contract I doubt if this company could have successfully listed on AIM. Take a look at the AIM admission documents and you will see that the main trust of their confidence was the SAP program and not the rag tag of other offerings.


EXTRACT FROM ADMISSION DOCUMENT:

Golden Tax Tender
The awarding of the Golden Tax Tender by the Chinese State Administration of Taxation ("SAT")will, in the opinion of the Directors, enable Skytech to target Exporting Enterprises across China.

High barriers to entry – export tax software
Jiangsu Province became the first province in China to impose compulsory electronic tax filing on Exporting Enterprises. The Directors believe that this shift towards electronic filing for export tax and the selection of Skytech's export tax management software by the Jiangsu Tax Bureau has created a high entry barrier for competitors to compete in relation to export tax software in
Jiangsu Province.

As for stocks I think is worth holding, depends on your investment window but I like a stock that i feel is guaranteed to be a multubanger in 2 years.

AFR >>> +75,000boe by end of 2010. Very liquid stock so was depressed by the sale-off from institutional holders when they needed cash to weather the credit crunch. Planning on Full listing. will be extremely surprised if not 10 banger in 2 years window.
SYNC >> has a leading tech that will mean mobile email for any phone even the most basic. NOKIA just stopped supporting their own software, which they payed 400Mill to acquire, in order to start offering the SYNC product.
UVEL >> a right dog but my punt on the Chinese matket. I seem to be the only one with faith on this one but have my reasons.

You pay your money you take your choice. There are plenty oportunities in the market. You just do your research and position yourself, if the stock meets your risk tolerance.

[hugepants] 15/5/2009 23:11

Without SAT however they will limp along ..making profits but no transformational change in share price or prospect.

How do you know this?

Also Id be very interested to know what stocks you do think are worth holding.

[stewjames] 15/5/2009 18:50

Way, way better than I was expecting. All things considered, profitability from core business barely changed at all. Frankly, after December's trading statement, I don't think we had any right to expect results that good. And the price drops. Go figure.

[buggy] 15/5/2009 12:35

HugePant,

It is recognised that there is huge potentially market in China. For me however the carrot in SFT was the SAT deal. If they had pulled off the roll out then we will be talking a share price of ££s. It is indicative that their main earner even now is the added services to the regions that have already rolled out SAT.

Without SAT however they will limp along ..making profits but no transformational change in share price or prospect.

I will keep a beedy eye on it for when SAT comes back on tha table. Until then there are other opportunities in the market without tying down cash here.

Like most investment plans there is no obvious right and wrong way, until the fat lady sings and you can either count your winnings or loses ... you just pay your money and take your choice.

[hugepants] 15/5/2009 11:49

They have made #6.5M in loans getting about 10% interest. Thats why cash is down. To suggest SFT might go through all their cash is bonkers.

Profits have been reinvested in R&D and capitalised under intangibles. For me SFT is a great investment in the future growth of the Chinese economy.

[explorer88] 15/5/2009 10:28

buggy - thank you for the advice. fwiw, i bought a significant shareholding at under 4p.

conference call was interesting. they are already seeing positive results in eGov from Chinese stimulus package.

[buggy] 15/5/2009 10:10

explorer88,

You will get your wish I am sure.
Just a question why buy in a 6p. Is it a fixation with number 6 ....as you could have bought at 4p just about 2-3 weeks ago?

Just wondering ... if 6p is supposedly your lucky number or is it one of those throw away remarks people make without thinking. When the shares were trading around 4p the discount to net asset value was even more ... assuming that was your basis for buying a share.

Those that pushed the shasre price up from the 4p range were betting on the results surprising. Now that the goose that lays the golden egg,SAT project, has been put to sleep you can bet that most will jump soon. Hence if I was you I will wait for it to get back to the same trading range. You can then show your confidence by buying.

Currently though .. for me anyway, without the SAT project this company becomes one of millions of small software houses making ends meet by producing minor application sofware.>>>> No killer application ... no big bang in share price.

With the SAT program they had a killer application , in China, with a massive market .. especially as the Chinese gorvernment was going to make it legally binding that every company files digital claims. Now that this is off the table for the forseable future >>> what is left is a shell ... they may well consider an acquisition because they are aware that what they currently have is not enough.
Considering acquisition and making one though is miles apart. There is also a similar risk to successly acquiring and integration of the acquired company. If they are going to acquire a company that has a huge potential then it begs the question of why the company is selling out. SFT also is not that well heeled and good acquisition targets will come at a prenium >>> risk of significant dilution, share plus cash deal.
I myself see them as being acquired rather than acquiring someone. A company that already have a good product miss in China may view SFT as a back door entry into AIM.

[explorer88] 15/5/2009 09:36

hope we get a few more sells to enable to buy more at 6p (40% discount to net assets, 5% + yield, and prospect of M&A activity) :-)

"we are very optimistic about the Company's future"

[siwel100] 15/5/2009 09:09

Looks a bit bleak. SAT seems to be dead in the water. The company is gambling on a rising R&D and property spend into a declining and what must be a ferociously competitive market.
It would be all too easy for SFT to burn through their cash reserves during the recession and still not be left with killer apps. or sector specific expertise when the good times do eventually roll again.
Every software house needs its high margin or turnover boosting niche. SAT was SFT's. Without it, all that seems to be left is a jumble of expertise, falling income and a dwindling cash balance. 2009 looks set to be a daunting year.
imo

[bardfield1] 15/5/2009 09:08

Dividend payment is sensible given the cash position and the profit generation.
Investment in R&D during the economic downturn is an extremely positive indicator and has created 7 new products which will generate revenue in 2009.
I continue to be impressed with this company and see it as a long term hold with excellent prospects.

[buggy] 15/5/2009 08:42

Does not look too bad ... but it has to be rememberd that the impact of the economic slow down only started during the last quarter of 2008. Hence this results only includes 3 months of economic downturn at best.... (my extimate is about 1 month of impact ... the impact would have been weakening order book which will start to impact earning this year).

A bit full-hardy to waste resource paying dividends .... but then again if they did not pay any it will give market the impression that they are struggling. On the other hand if the economic activity does not recover the next H1 will be a darn site worse .... H1 2009 result will be a full 6 months impacted figure..... may have been wise to conserve all cash resources as no one is clear when we will come out of this downturn and Chinese export returns. Their key software is for the export market and that will only pick up when US and European economy picks up. The rest of their software are bits and bobs which is not supposed to be the main player for SFT. Now the key application is put to sleep and they have to scramble to find something to keep them going until and if the Chinese government deems fit to mandate the automation of all export claims .... when they think the export market has returned and the work load becomess excessive for their current staff levels. [ As the government is keen on keeping unemployment down, I would think that as part of the stimulus package they will rarther hire more staff than give a go ahead to an efficiency saving tool that will mean less people required to do the task leading to more unemployment ...... that is the sarcastic bit but then governments ....... ]

On a positive side ... they did not attempt to spin it. They told it as it is ... they are expecting significant impact in the short term but has the necessary reserves to weather the storm until after the recession.

I will keep on my watch list but will not re-invest at the current time.

[boadicea] 15/5/2009 08:19

exp88 - Of course , if you translate from US$ to sterling, the turnover increase looks even better.
However, I think some on here are forgetting to convert US$ to sterling before calculating the assets per share.

Overall, not a bad set of results in current circumstances (p/e ~5 at current sp) but not likely to set the share price on fire. Just enough promise for the future to keep one interested.