-3x Short China Discussion Threads

[bbluesky] 16/9/2010 19:43

18 patents 1st half! Not sure many here are focusing on the quality of the company or the big picture. Energy storage is a massive growing business, sorry (t)hiq. Like semi-conductors, battery uses continue to develop, but profits don't grow in straight lines. Mobile markets, bicycles; cars tomorrow, alternative energy.... lots of growth avenues and who is at the techie end?

[galles] 16/9/2010 14:18

Matt, have finally waited for the results to come out :)

You may recall my concerns before were not on the drop in revenue and profit as much but more on its ability to retain cash and keep debt at reasonable level and how it deals with the varying market conditions. To me, even after the difficult period experienced, the figures show CHNS has done an admirable job. Not giving out dividends is perhaps a not so positive point, but the half year profit for a company worth £44mil is very attractive indeed, dividends or no dividends.

I think the result has given me enough confidence to do what needs to be done! ;)

[nilip] 16/9/2010 14:03

rivaldo,

Thanks for your summation above.

Must admit, I had a very small holding remaining (which I had stupidly forgotten about! ) - the sharp drop to 140-150p was a bit of a scare for me and a strong indication where the MM's can take this in the absence of any good news in the short/medium term.

Unfortunately, I fear that will be the case as I cannot see any particular positive news coming from CHNS in the coming weeks.


I closed my small remaining position today.


Will continue to watch ... but think with only 2 MM's and lack of news we could well see the share price drift much lower in the short - medium term (irrespective of multiples)

I suppose, given the number of stocks that offer sig. upside elsewhere, money tied up here just doesn't quite make sense imo ... unless you're happy to lock in your cash for 12-24 mths ... eventually CHNS should come good again so long as there are no further surprises.

[tux223] 16/9/2010 13:36

Just passing through - the spike down caught ny eye - but I know this about lead-acid batteries in UPSs, golf buggies, etc.

They don't last forever. They typically last three years. Five, if you are lucky. And if you put off replacing the ones in the UPS for too long, they go eggplant-shaped(*), leak, and you've postponed a £50 battery replacement into a £200 UPS replacement.

Someone with electronics that needs back-up power, or an electric bicycle, can't put off buying another battery for long. So either this company's customers will return quite soon when they are forced to, or some other company is eating CHNS's lunch.

Which is it?

(*) like pear-shaped but without the long thin bit.

[rivaldo] 16/9/2010 12:55

CHNS' results are an interesting conundrum as usual :o))

The initial market reaction was of course bonkers given 21.6p EPS for H1 alone. If anyone got shares at 150p or so then congrats.

Positives

EPS performance is good despite increased tax etc. Will tax rates fall in future with CHNS' "green" initiatives?

CHNS have reacted quickly and cut costs accordingly

The recycling facility is expected to expand and boost profitability in H2

Balamnce Sheet/cash looks solid despite poor cash flow as usual in H1. This should pick up, again as usual, in H2

Negatives

The outlook is opaque and gives no indications as to full year performance, despite already being near the end of September. One could say that the statement that H2 is normally better than H1 is a small clue, but who knows?

The lack of an interim divi is a small negative, but they've done this at least twice before and paid a full divi at the year end, so not really a sign of anything in particular

Exports aren't growing as fast as hoped in replacing domestic sales

The lead price linkage scheme didn't work in CHNS' favour as in the past

Conclusion

A real curate's egg again. I won't be reinvesting just yet given the lack of clarity going forward - things really could go either way.

But for holders I can't see the share price falling much either given the high tangible net assets, CHNS' domestic leadership in its sector etc etc.

Could CHNS even become a bid target at these levels I wonder? Obviously the head honcho and his plans and needs going forward are key.

It's fascinating to watch the ups and downs of companies like this over time.

[mattjos] 16/9/2010 11:53

there was this period where chinese telco equipment was on hold to india but that trade spat seemingly now resolved

[crawford] 16/9/2010 11:46

Export sales to India are well down, I wonder if this is temporary or not.

[mattjos] 16/9/2010 10:50

i did wonder :-)

[foodcritic] 16/9/2010 10:31

Mattjos do you think that buyer is JTC?

[mattjos] 16/9/2010 10:13

really could do with another MM on this stock as SEYP really have it their own way and the spread is so off-putting for many.
There has been a persistent buyer here of late in 10k blocks who tends to come in late pm and collect up the loose stock, so am curious to see when/if they might next appear.

[interceptor2] 16/9/2010 10:07

I took advantage and sold last small holdings here. They will recover, it's just a matter of waiting for either a trading statement or final results. imv.

I really had to trim one of my holdings, because I was starting to hold to many stocks and these were the weakest holding. Have become a little trigger happy with so many companies with great prospects at this time. imo.

Good luck to holders.........

Regards ic2.........

[roundup] 16/9/2010 10:00

Excellent recovery

[jwe] 16/9/2010 09:10

Matt-to be fair,what may have been good value last year has no bearing on fair value now.Personally i cannot see it going above £2 without an improving outlook.I also believe 50p EPS this year is not unobtainable.It means CHNS would have to produce their best results ever(apart from the one off of H2 last year).from my viewpoint that looks unlikely,although i do closely watch this share

[joe say] 16/9/2010 08:50

Shanklin - all listed as current debtors - so in the worst case scenario 12 months to collect the last penny !

However, you're right it would be good to know.

[mattjos] 16/9/2010 08:50

a quick search in , for instance, the australian solar sector will show how Shoto are getting out there more and more. I still maintain that around / under 180 is a good price here given the CEO paid £11m for stock at that price last year

[interceptor2] 16/9/2010 08:48

Just filter him, I did ages ago and have no idea what nonsense he is posting. If everyone does this and he never gets a re-action, you take away his reasons for posting.

[shanklin] 16/9/2010 08:47

As somebody who held for a long period up to the AGM statement on 22nd June, I must admit to sharing Pro's concerns about the cash flow here. It would certainly be helpful to get some sort of age profile of the monies owed to CHNS and information as to when they expect to collect this cash.

I still follow CHNS with great interest and if we can get any more info on the above, and a little more optimism on trading, would look to go long again

[pro_s2009] 16/9/2010 08:46

daydoo.

Well done.

If you want something with some risk but potential upside that is staggering, take a look at XEL (Xcite) who spud their North Sea heavy oil well late this month/early next.

Even the ex-CHNS holder "rivaldo" is in that XEL ;)

Its a cracker, I have been in since 20p and not selling none either, the big make or break is coming up soon and its a potential multibagger, like GKP/RKH has been for some.

[hvs] 16/9/2010 08:44

Whats happened to the Chinese ?

Are they not charging their battereis ?

[jwe] 16/9/2010 08:43

I too tried to buy in at 150p but was too greedy and went for too many in the end could only get a quote 2k at 158p(price rising against me)-i passed

[yump] 16/9/2010 08:41

Pro
I think you need to get some help of some sort (or a life).

No idea why you are posting; it certainly can't be out of the goodness of your heart. Perhaps you just feel like getting your own back for the shares where you started a thread and ramped endlessly, taking stick from others when the companies ran into trouble or got liquidated.

Even a nomark can see that this is not a ramping thread.
Its a debate about value and possible recovery.
So hardly anyone will be taking anything you say seriously.

You'd probably spend your time better consolidating your efforts into ramping whatever stocks you're ramping at the moment.

[crawford] 16/9/2010 08:35

Results slightly better than expected, every time they RNS the situation seems to be improving.

Could be on for 50p EPS for the year, they say H2 is historically better than H1 and these results were for 1st half up to June, so I reckon 50p EPS is conservative.

Surprised at the fall this morning, I reckon we should be moving up to 250p in the short term.

[mattjos] 16/9/2010 08:35

Pro .. you are getting desperate. Came up with all this rubbish last year. at the H1 results. It's tiresome now

[davydoo] 16/9/2010 08:34

and i've sold at 165p, i know its worth more longer term, just couldnt resist a quick 10% profit in half an hour before work.