-3x Short China Discussion Threads

[pro_s2009] 18/9/2010 09:36

A valid point.

Anyone familiar with Chinese large scale projects knows that all along their timescales there are people who are corrupt stealing money from the pot.

This is fine with ever expanding activity as there is always new cash, but when things go into decline or start to dry up its where all the holes appear.

Nothing to do with CHNS but it could be that the receivables might now build and build due to funny business going on at their customers and their customers being unable to pay for goods received.

One of the reasons I have been bearish on CHNS, through no fault of their own they could end up with a receivables problem with lots of delayed, deferred and also eventually non payment of invoices.

As the activity dries up its time to see who has been swimming without their trunks on, if any.



Melton John - 17 Sep'10 - 17:29 - 911 of 914

Just had time for a good read of the H1 results. Does anyone else find this worrying.

"Thirdly, net cash flow from operating activities was -GBP27.90m, principally due to customers delaying payments as result of lower 3G infrastructure investments by China's major telecom operators and higher inventory levels. The Company continues to focus on the management of trade receivables to ensure sufficient working capital."

We know another company that has been stuffed by poor cash flow.

[jtcod] 18/9/2010 09:24

John
Do you mean CNT?

If so:
CNT had net debt of (-£97.5m ) whereas CHNS has Net Cash of +£3.2m
CNT had Tangible Assets of (-£46m) equivalent to twice the share price (negative) whereas CHNS has Tangible Assets of £76m equivalent to 1.75x the current share price (positive).
CNT went bust because of 'Trade Payables' not 'Trade Receivables'. Their suppliers refused credit leaving a £160m hole in their balance sheet which their bankers were unable to fund against non-existent net tangible assets. Whereas CHNS as we speak have no problem with Suppliers, Zero Net Debt with Bankers and as I say Net Tangible Assets of 1.75x the current share price.

[hiq] 17/9/2010 21:02

Current share price is about right +/- 20-%

[3taz] 17/9/2010 20:38

Nothing to be unduly worried about

[melton john] 17/9/2010 17:29

Just had time for a good read of the H1 results. Does anyone else find this worrying.

"Thirdly, net cash flow from operating activities was -GBP27.90m, principally due to customers delaying payments as result of lower 3G infrastructure investments by China's major telecom operators and higher inventory levels. The Company continues to focus on the management of trade receivables to ensure sufficient working capital."

We know another company that has been stuffed by poor cash flow.

[jtcod] 17/9/2010 13:49

Thks Orb1t

[yump] 17/9/2010 12:21

@hiq

Go to Blinkx, go directly to Blinkx, do not pass GO and even if you did you would not collect £100.

[0rb1t] 17/9/2010 11:52

Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Dec-10 230.00 13.50 50.40p 3.6 n/a -50% 5.00p 2.6%

[mattjos] 17/9/2010 10:34

have mailed Laetitia .. a/w response

[jtcod] 17/9/2010 10:24

Has anyone here seen any update from Seymour Pierce following the interims yesterday?

[hiq] 17/9/2010 09:33

It is indeed the lonely role of those who warn that the emperor wears no clothes to be scorned and vilified.

Just as I was on the TAN board, the LNG board, the ACE board etc etc over the last 2-3 years.







Notice anything?

[dreggspicker] 17/9/2010 08:11

I will second that 3taz; :-)

[mattjos] 16/9/2010 23:39

steg, thanks. wasn't aware. what is it with the sad geezer brigade?

averaging down, lol. fwiw, i'm averaging up at these levels

[stegrego] 16/9/2010 23:26

Mattjos,

hiq is the new reincarnation of Sir Brainy, Sundaymonday, donutulike etc etc.

Thats where these idiots come from...

ie its the same person.

[hiq] 16/9/2010 23:03

Averaging down? Why not?

Cannot give advice but looks bad to me

[mattjos] 16/9/2010 22:58

well good luck elsewhere then.
This seems cheap to me and hence i have bought it again.

[hiq] 16/9/2010 22:47

Yeah right, batteries.

I see your personal insight and knowledge/ expertise, which you already know I respect.

I do not agree with your assessment of the potential, you are blinded by your job.

Batteries are in decline.

[mattjos] 16/9/2010 22:40

hiq .. i don't think you get it. which energy-centric industrial sector is not going to have demand for batteries?
Think of the growth to come in the ASEAN economies ... forklift trucks, industrial electric vehicles, railway network, solar parks, cars, e-bikes, telco, e-cars, grid back-up, lead re-cycling itself

Perhaps owning & running an OEM of industrial electric vehicles gives me a greater insight here but i can assure you the trend is very much growth in this sector.
Shoto's backup batteries ... we have some in our products ... they do not have to be used in telco stand-by applications only & Shoto's commentary today that they are focussing on higher profit domestic sectors is a clue here.

[hiq] 16/9/2010 22:07

You just don't get it.

Where is the future demand for Shoto's batteries?

It will evaporate.

[mattjos] 16/9/2010 21:37

I do believe that Shoto have listened to the feedback from uk investors .. the segmental data in the results is improving and they are giving us some more info on the financial benefits of the recycling project .. this info was missng in the past.
The better the company is understood, the more likely the market will come to increase the rating it is afforded.

Call it 24.1m shares @ £1.80 / share = mkt cap of £43.4m

Cash & cash equivalents at end of H1 = £30m

£129m in cash, stock & debtors v £87m in debt and creditors .... so a reasonable surplus


Market seems to value the 'business' at solely the difference between cash/stock/debtors minus the debt & creditors or, put another way, is valuing the business at just a 50% premium to the cash in the bank.

This is, imo, a complete nonsense ..... the significant investment in R&D and the fast growing patent suite clearly marks out Shoto as a company making a bold statement about future intent ... none of this seems to be valued either.



For those bothered or interested, you may like to have a look at:

DMS Technologies .. Red Top Batteries & Chargers (made in ?)

Regen Power in Australia, solar battery range

For trends in the industry, aka how manufacturers in the EU are scaling back manufacturing to concentrate on distribution, one may read the history of Supac Ltd.

For a possible 'pair trade' or chinese peer to watch for, keep tabs on Ritar Power, listed on the NASDAQ ... ticker is CRTP (www.ritarpower.com)
(Have tested their batteries & can advise they are not as good as Shoto's)


Quite happy i added of late and will keep doing so i feel.

Edit: where do these idiots come from?

[stegrego] 16/9/2010 20:31

Head. Nail. Hit.

[mattjos] 16/9/2010 20:29

unloved, misunderstood, undervalued and not an oiler or a some-time-soon miner .. just a steady profitable battery business in China continuing to innovate and expand its products and markets. Far too boring for most i expect