Ft Cesg Discussion Threads

[affc21] 11/4/2008 18:11

Hi 0rb1t, Thanks for the feedback, will put a note in my diary. Like yourself I have also very recently bought a few here prior to results.
I noticed CESG management are confident at meeting their year end expectations (from the Admission to AIM Document), whose trading sector would appear to be in a very high growth area, as confirmed by the Trading update from Geong.

Good choice in your recent purchase of Geong, where I hold a few myself.

[0rb1t] 11/4/2008 12:11

Hi affc21, TDWaterhouse has the prelims estimated for the 30th April. Last year they were not announced until the 30th July. Maybe they will be earlier this year now they are on AIM and used to producing UK-style report and accounts.

I managed to buy 20,000 yesterday at 25p. Wanted to buy before the next results are announced.

Also have bought some Geong at 52p & 58p but they look expensive compared to CESG!

[affc21] 11/4/2008 08:55

0rb1t/other interested investers,

Does anyone know when the Results are due?


P.S. Thanks 0rb1t for all the info/links that you have posted above, its been most helpful.

[capt bligh] 10/4/2008 12:14

Interesting to plot GNG against CESG Both suffered in the same way leading up to tax year end. Cesg has yet to make it should its a very good and ambitious company. I hold both.

[capt bligh] 10/4/2008 10:45

Gone long... lets see what happens, encouraged by Geongs's move and favourable currency plus irrational year end selling.

[0rb1t] 31/3/2008 23:38

The occassionally sale is causing the price to be dropped here. Not surprising with the current market. This company is forecasted to make about £6m after tax for a company with a market cap of £17m. That could soon be a historic PE of about 3 (and not to mention 100% growth per year!).

[0rb1t] 14/3/2008 12:47

Aim's Chinese oaks need remninbi revaluation



Published: March 13 2008 19:54 | Last updated: March 13 2008 19:54

Chinese companies on Aim had a pretty good year in 2006. No less a fan than Clara Furse, chief executive of the London Stock Exchange, praised them as "tomorrow's oak trees".

Then Seymour Pierce, the investment bank, came up with an Aim China index to monitor their progress. Last year the index was flat, although it did compare favourably with the performance of the Aim 50, the FTSE Fledgling and the FTSE SmallCap.

Now even that consolation has gone. Since January 1 the Aim China index, which comprises 47 companies with market capitalisations ranging from less than £10m to more than £400m, has lost 16 per cent of its value. That compares with a decline of almost 5 per cent in Aim as a whole.

Nevertheless, Jim McCafferty, head of research at Seymour Pierce, is urging investors to have another look at the junior market's Chinese companies. In a note published yesterday he points out that there is a realistic prospect that China will revalue its currency this year because of a combination of political pressure, rising interest rates and concern about inflation.

A revaluation would benefit many of the companies that operate mainly in the Chinese market, he argues. A stronger remninbi would translate into higher profits in sterling.

The Aim China index is heavily weighted, with the top 10 constituents accounting for more than 70 per cent of its market value. None of them are advised by Seymour Pierce, which expects five to benefit from a stronger remninbi.

The biggest is China Real Estate Opportunities, followed by ARC Capital Holdings, which has retail assets in China; Green Dragon Gas, which bills in China; Central Properties; and Asian Citrus Holdings, the orange plantation group that is helping to develop the Chinese market for orange juice.

The impact of a revalued currency on the other five companies is expected to be either negative or indifferent, mainly because they are significant exporters or price in dollars. For the record they are Renesola, the solar wafer maker; Griffin Mining; Prosperity Minerals; RCG and Jetion.

The three companies advised by Seymour Pierce itself are much smaller – China Shoto, the battery maker; ET-China, the travel specialist; and Geong International, a software company. All three operate in the Chinese domestic market.

[hectorp] 14/3/2008 09:24

Company seem to be performing as well or better than I for one expected post float, raising £333,000 for 1M shares at 33p was helpful, I dont know much about the recent aquisition , but winning a contract that brings in further 1M a year for 3 years is extremely supportive of share price which should be back over 30p surely.
I see Don Muang here too, I sold before float due to short term illiquidity on my trading accounts, I can come back now and may well do so.
PS note this news today , not sure how it could affect this company directly? China overheating?

[0rb1t] 03/3/2008 16:20

Evolution have initiated coverage today with a target price of 41p.

[0rb1t] 03/3/2008 07:23

CESG are maintaining at least one news annoucement per week!

CESG have obtained a 60% share of Ningbo Education Information Technology Limited ('NEITL') for RMB 3m. This gives them access to IT outsourcing for 500 state schools plus other private schools in Ningbo.

[don muang] 28/2/2008 19:33

Noticed this part in the RNS:

"China Eastsea also said London Asia Capital PLC no longer holds a
disclosable interest in the company."

Been watching it for a while. So might buy a few (of CESG) now.

[pec2004] 28/2/2008 07:59

The secret here is to built up a decent size stake before too many people here about them.

Will be adding again shortly.

[0rb1t] 28/2/2008 07:53

pec2004,

the share issue at 33p which is above the current share price is interesting. No need to give a discount here as the share price are already trading at a discount.

We now have two major share holders called Rich Hope and Good Hope in the company!

The other good news is that London Asia no longer have a notifiable interest in the company. They did have 4.3m shares when the company transferred to AIM. Now less than 3% means that their holding is below 2m. They were the only major shareholder not to sign a lockin agreement for the AIM float. Their selling post-float is the only thing that has kept this down to 30p IMO. Maybe Good Hope also took some of the shares.

[0rb1t] 28/2/2008 07:34

Great news this morning. At the momement we are getting annoucements at least once a week! Makes earnings more visible going forward. There must be 1000's of opportunities like this in different regions in China. It's interesting that the Asia Pacific CEO of London Stock Exchange is supporting the company (or just there for publicity!).

Contract gain


China Eastsea Business Software Limited ('China Eastsea'), which provides
information technology and business process outsourcing services, announces that
it has signed a contract to review and upgrade IT systems for the Yinzhou
District Government of Ningbo City ('YDG').

The initial scope of the contract is to form a working group to study the
current YDG IT platforms and to analyse the future IT requirements ahead of any
further implementation of new systems, upgrades and training. In addition, the
working committee will provide analysis of the maintenance procedures that would
need to be established follow the implementation of such systems.

It is expected that this initial contract plus the future implementation
contracts could be worth up to RMB15m (c. £1.06m) annually for the next three
years.

For the year ended 28 February 2007 China Eastsea recorded revenues of £8.79m up
from £4.36m in 2006, with pre-tax profits rising to £2.23m from £1.28m.

The signing of the IT outsourcing contract will take place at a reception in
Ningbo later today. Gao Xinmin, Vice Director of the IT Expert Committee of
State Department; Yu Hongyi, Vice Mayor of Ningbo City; Jane Zhu, the Asia
Pacific CEO of London Stock Exchange; and Eric Zhu, CEO of China Eastsea will
all address the reception which will be attended by senior government officials,
representatives of China Eastsea's major customers such as Sinopec ZRCC,
Yanghong petrochemical, as well as local media.

At the reception China Eastsea will be presented with a government grant of
RMB2m (c. £140,000) by YDG. The one-off grant has been given in support of a
local business and to recognise China Eastsea's contribution to Ningbo City.

Eric Zhu, Chief Executive of China Eastsea, said:

'This contract demonstrates the success of our strategy of diversifying our
client base and expanding into other industry sectors beyond the petrochemical/
petroleum IT outsourcing market. The Yinzhou District Government is a major
government contract for us and we look forward to provide them with our
consulting, outsourcing and software solutions.'

[pec2004] 28/2/2008 07:06

Interesting to see they raised funds at 33p.

And yet another contract win.

Happy to be in here for the long term.

[0rb1t] 27/2/2008 18:42

Hi ex88, I'm still holding there. Not expecting much rise at the momment.

[explorer88] 27/2/2008 15:36

Orb1t - are you still in TAIH? looks like we may be very close to breakout on the upside.

[capt bligh] 25/2/2008 10:14

I hold both gng and cesg...Cesg has made one spectacular purchase so far on incredibly good terms... they look especially solid and are now priced at a huge discount pe wise to GNG where the story also looks compelling but perhaps more potentially explosive in a good way.

[explorer88] 25/2/2008 08:31

morning Orb1t - CESG - yes, good growth. i like the bit (can't remember where i read it) where CESG says they want to grow substantially/be a major player. imo, they'll either do this, or like many companies before be bought out in the years ahead.

[0rb1t] 25/2/2008 08:18

Hi ex88,

CESG at growth of 62% and 102% over last two years and on track for another 100% this year is good enough for me!

Geong has different risks to CESG. They are reliant on a single product for all their revenue but this can work if it is very good (ie sage). Also I suspect Geong would be more affected if key personel left.

I would have thought that CESG has the scope to becoming an even larger company than Geong as any computer system can be outsourced (see the size of Wipro, TCS, EDS, CSC, etc).

The statement listed in the admission document about this being a PRC company held by a foreign listed company probably applies to Geong as well (they are listed in the BVI). There are of course risks associated with investing in China but like in any other country. I think the Chinese will want to promote their companies that are going to compete on the international front and not penalise them!

There are 16.15m share options outstanding at an average price of 14.48p. At the current share price of 31p this would cause dilution of 10%. This sounds reasonable if they can grow the company at 100% a year! (also note any future options will not be issued at less than the current share price).

[explorer88] 24/2/2008 17:06

melody - you may also care to take into account the very substantial (about 15 million)CESG share options granted at about one third of current share price

[explorer88] 24/2/2008 16:59

melody - i favour GNG - prospective higher growth rates, higher barriers to entry (?), and products which appeal to all businesses / sectors: VSB / SME / Enterprise.

It is perhaps also worth doing a detailed analysis of potential risk factors for each company. CESG has risks which, imo, are not present in GNG. e.g. from last months AIM admission document for CESG:

New M&A Rules

On 8 August 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission (the "CSRC"), promulgated the New M&A Rules that became effective on 8 September 2006. These New M&A Rules, amongst other things, have a number of provisions that purport to require that an offshore special purpose vehicle ("SPV") formed for listing purposes and controlled directly or
indirectly by PRC companies or individuals shall obtain the approval of the CSRC prior to the listing and trading of such SPV's securities on an overseas stock exchange.

The current position of the Group is that the transformation from a PRC domestic enterprise into a wholly owned foreign enterprise ("WOFE") was completed in accordance with the then applicable procedure, before the New M&A Rules took effect. The common interpretation is that the new regulations do not apply to an existing SPV with a WOFE set up before 8 September 2006.

However, there exists a grey area in the New M&A Rules in that they do not explicitly stipulate the requirements for the overseas listing of a non-SPV company. In the, what is considered by the Directors to be unlikely, event that the CSRC determines that the Company is required to obtain its written approval prior to Admission, the Group may face regulatory action or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies
may impose fines and penalties on the Group's operations in the PRC, limit its operating privileges in the PRC, or take other actions that could have a material adverse effect on the Group's business, financial conditions, results of operations, reputations and prospects, as well as on the trading price of
the Ordinary Shares.

If the CSRC determines that the Admission requires its approval, the Group may not be able to obtaina waiver of the CSRC approval requirements, if and when there are procedures established to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement
could have a material adverse effect on the trading price of the Ordinary Shares."

CESG - caveat emptor?