Ft Cesg Discussion Threads

[0rb1t] 02/6/2008 09:30

Excellant bolt-on acquisition with strategic fit at a very good price. Buying it on a forward PE of less than 5. The sellers most think CESG shares at 33p represent good value!

[hectorp] 02/6/2008 09:21

Share price here is undr-achieving: but I dont expect the company shall. Tarred with the word 'China' on AIM UK, but she should fly in due course.

[masurenguy] 02/6/2008 09:19

Interesting to note that the deferred consideration (42%) of the total purchase price will be paid in shares, based upon a strike price of 33p, subject to achieving the agreed performance criterion. The DC strike price is pitched at circa 38% above the current share price !

[matt] 02/6/2008 09:05

Acquisition

RNS Number : 6998V
China Eastsea Business Software Ltd
02 June 2008



China Eastsea Business Software Limited
(AIM: CESG)

£1.9m acquisition of INFA Group

China Eastsea Business Software Limited ("China Eastsea"), which provides information
technology and business process outsourcing
services, announces that it has acquired Infa Hong Kong Group Limited ("INFA Group") for a
total maximum consideration of HKD 28.9m (c.

£1.9m). INFA Group is a profitable, growing business and the acquisition is expected to be earnings enhancing. INFA Group provides IT outsourcing services in the power and telecommunication industries focusing on Shanghai, Beijing and Zhejiang.

The acquisition will increase China Eastsea's market share in the power and telecommunication sectors as well as complement their established presence in the petrochemical and government sectors. The acquisition includes Beijing City Cash Business Service Limited Group, INFA Group's wholly owned subsidiary, and also includes parts of IT outsourcing business in Shanghai. Financials INFA Group, established in 2000, achieved profits after tax of £0.27m for the year ended 31 December 2007, an increase of 109% on the prior year, on turnover of £4.47m and net assets of GBP 0.14 million. Consideration The acquisition of the entire issued share capital of INFA Group is for a total maximum consideration of HKD 28.9 million (£1.9m) with an initial cash payment of HKD 17.4 million or RMB equivalent (c. £1.1m). The remaining consideration payable is conditional on INFA Group achieving minimum profit targets for the years ended 31 December 2008 & 2009. The remaining consideration will be settled by the issue of up to 2,270,197 Ordinary Shares (which will represent 3.06% of China Eastsea's enlarged share capital), at an issue price of 33 p per share, as follows: * 60% of the shares, equal to £449,498 (1,362,118 Ordinary Shares) will be issued subject to INFA achieving a minimum profit after tax of HKD 5.05 million (GBP 326,860) for the year ended 31 Dec 2008; and * 40% of the shares, equal to £299,666 (908,079 Ordinary Shares) will be issued subject to INFA achieving a minimum profit after tax of HKD 7.0 million (GBP 453,519) for the year ended 31 Dec 2009. Eric Zhu, Chief Executive of China Eastsea, said: "This acquisition demonstrates the ability of this group to deliver on our strategy of acquiring successful business in major areas of China which reinforce our strong position in the petrochemical, government, telecoms and power sectors. The success of our strategy and this acquisition will give China Eastsea group a solid base in Shanghai, the financial centre of China, which will further enhance the visibility of the company's profile as well as access to financial market resources."

[pec2004] 01/6/2008 20:55

Still buying these while the masses are unaware of them.

My 3 core shares are GNG, CESG and SFT.

Will be parting with some GNG shares on/before results to get more here for the run up to CESG`s results.

In the process of establishing communications with the company and other related parties which has proved very useful before.

[janeann] 01/6/2008 17:37

well perhasp pec is still buying. As long as someone does i dont mind!!!

[0rb1t] 30/5/2008 18:30

Looks like someone bought 150,000 shares today (0.2% of the company). Great price of 23.5p.

[0rb1t] 23/5/2008 12:16

Last tranch has been paid for BHH:



'We are extremely pleased that the performance of BHH has been in line with our expectations. With BHH achieving its profit targets and the full consideration becoming payable, the PE multiple for the acquisition drops to 3.15.'

This has only just been an earning enhancing acquisition!

[angel of the north] 22/5/2008 13:41

No trades for 2 days? Is that right? Blimey!

[0rb1t] 21/5/2008 18:33

Also after the results, which is only one month away, LDC could quite possibly find a buyer for its remaining shares based on the company's improved performance.

[capt bligh] 21/5/2008 15:19

I agree with whoever it was that said the remnants of the LDC stake is holding this back, once it goes the stock is going to very difficult to buy. Pec you could probably buy your 1% at these levels in one fell swoop if you hurry... cant help feeling this is the last element hold cesg back... how many have they got left since dipping under 3% on the 28th Feb???

[0rb1t] 20/5/2008 11:33

Hi AOTN, Results end of next month should generate more interest in the shares. We will then see how much above 4p they actually are.

[angel of the north] 20/5/2008 09:53

Dipped my toes in the waters this morning - I sort of like quiet boards but uess will all change if action starts?

[arthurly] 19/5/2008 18:14

I've got all three as well. But heavily weighted to GNG.

[zimbi] 19/5/2008 17:43

Perhaps i should have added :-)

[pec2004] 19/5/2008 17:38

Phil is talking about software co's.

[zimbi] 19/5/2008 17:33

Phil

Why don't you throw in RCG and TAIH?

[pec2004] 19/5/2008 17:27

I hold all three of those, only started building my SFT stake last week though as it is the least strong of the three imho.

[philjeans] 19/5/2008 16:02

A Chinese trinity of CESG, SFT and GNG would be formidable; extremely successful and make me quite a lot of money too!

Combined or separate, I'm holding long term.

[0rb1t] 19/5/2008 13:23

CESG staff doing their bit for the Sichuan earthquake:

[0rb1t] 19/5/2008 12:35

Hi riv,

Welcome aboard! I think both GNG and CESG will do well. GNG have the better international connections but CESG seems to have very good connections within China and the local authorities are promoting them. They are both leading players in their respective fields. CESG could grow bigger based on the fact of winning major outsourcing deals.

[pec2004] 19/5/2008 12:11

And long may it last so I can keep accumulating.

[capt bligh] 19/5/2008 11:12

A muted response really, when you think the PE has moved up to about 6.5 ( probably quite a lot better they may have beaten the CITY IR 2006 estimate of 6.7eps for the year (pe 3.88)!) no debt, cash flowing in... crazy.

[pec2004] 19/5/2008 10:16

Good to see you here Riv, i've been buying these for a while as they are well of the hoards radar.