Dji Holdings Share Discussion Threads

[toyin] 22/4/2015 13:21

Hi ayesha4

Well done for that, lets wail and see.

All the best.

[ayesha4] 22/4/2015 12:52

I spoke with Mercer at length and conveyed my displeasure.1. They expect an announcement on lifting of the ban by end of next week or thereabouts.2. Nasdaq listing news before or around the same time.3. They expect a significant re-rating going forward as still expect 2015 to be a phenomenal year.4. There was a big seller which has been cleared. Current movements are small PIs.

[bam bam rubble] 20/4/2015 16:41

DJI shares rallied to close at 52p which values it at £70m. That might look a lot

It looks a helluva lot. Can anyone justify the valuation here?

[sjc] 17/4/2015 23:21

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[neurolodger] 17/4/2015 12:26

Here is the write up from Mr WaltersIt's Still A Lottery The lottery ticket is still alive, and it could pay off handsomely, all being well. Although DJI Holdings (DJI) has been a flop since my initial speculative recommendation at 92.5p (It's A Lottery) on December 29, it could come back in spectacular style if and when the Chinese State allows online lottery sales to restart. There is not much of an 'if' in this. The Chinese are great gamblers, and lottery sales will return, but we still don't know when. They tend to make announcements around holidays in China, and the next holiday is May Day, but who knows? DJI develops, promotes and distributes authorised lottery products in China, both directly and through partners, and provides back office services to some of the biggest lottery partners. It has a British board, but Chinese employees, it conforms to all of the rules, and has some massively prestigious partners. The fact that it is an established participant in a massive market which is growing prodigiously as online lotteries and the internet sweep across China means that it has an enormously valuable position - one which eventually looks sure to bring a bid from a more powerful player seeking a way in to China. In the meantime, DJI has been growing at a remarkable rate, but along with the rest of the industry took a nasty blow when the Ministry of Finance suspended online lottery sales at the beginning of March and launched a clean-up of the industry. Authorised sites are an important source of revenue for the provincial and central governments, but sales through illegal sites are reckoned to be three to ten times greater. The clean-up ought to knock out most of the mavericks, and tougher rules will also take out some of the marginal legals. Those caught playing illegal sites face police action, no small thing in China. The authorised survivors - and DJI is confident it will be one of them - will be helped by clearer rules and should emerge all the stronger when sales resume. The trading statement from DJI shows that 2014 results will have been hit by matters arising from the lottery suspension - some partners will be unable to pay certain monies until online sales resume - and auditors Deloitte have taken a tough line on revenue recognition. So 2014 profits will fall short of previous expectations, even though the second half was profitable. There is likely to be an improvement of between £5m and £5.5m in EBITDA for 2014, which looks like a loss of between £1m and £2m. Results will formally be announced during the first half of May. This is not too much of a setback in what was always going to be a year of build-up, and the most remarkable news in the statement is that gross sales hit £642m for the year, against just £22m for 2013. In the first half of 2014, gross sales were £134m, and so rocketed to £508m in the second half. This is gross sales, and in some areas commission could be under 2%, so the figure needs to be viewed with some caution. Nonetheless, it shows that DJI was growing at a phenomenal pace before the online suspension. The company says that, before suspension, it was confident of the trajectory for 2015, and assuming this trading resumes in the near future, remains confident in the 2015 outlook. Chief executive Darren Mercer says DJI is well positioned to succeed through relationships with substantial trading partners and relevant authorities. It has a strong pipeline of revenue opportunities based on expanding channels to market and providing new content. This looks like a hint of more deals with powerful players to come, and the January link with Manchester City, bringing the glamour of a top name British soccer club close to Chinese fans, gives a glimpse that DJI is playing in the premier league. Still more important is the prestige of DJI's existing partners in China. Perhaps the most important of all is the joint venture signed in September with Xinhua to provide a technology platform and sports and welfare lottery games and lottery services. This 49% stake ties DJI in with the dominant State-owned media company which operates China's main online news sites, and has over 20 newspapers, dozens of magazines and various other media ventures. It is hard to exaggerate the significance of the Xinhua link, though DJI also has deals with part of the giant Alibaba company, and with Tencent and 360. DJI itself has lottery licences in a string of major provinces. The online lottery suspension, and uncertainty over when it will be lifted, emphasises that no venture in China can be regarded as risk-free to Western investors. They do things differently, but there is a massive market and one which is still in the early stages by our standards. The State action has effectively raised the barrier to entry, to outsiders and to Chinese gambling houses. DJI shares tumbled to 47p at one stage today, and rallied to close at 52p where the company is valued at £67m. That might look a lot for a loss-making company, but if the lottery suspension is lifted soon, DJI's outlook will be transformed. It will once again be commanding meteoric growth in sales with the prospect of profits following in the next couple of years. And, crucially, it will have a significant position, supported by major Chinese establishment players, in that market. Others must be looking hard at the business, even now. But, in self-defence I reproduce this warning from my original piece (which gives a great deal of background on the company) there are risks -' If you worry that DJI will be summarily locked out or thrown out, or placed at a disadvantage to local rivals, this is not one for you. No amount of reassurance can be sufficient.' The risks, of course, are underlined by the fact that you can now buy the shares for almost half the price of my original recommendation (though they did go up usefully in the weeks after it). Once again events at DJI demonstrate the sense of a stop loss policy. on March 9 (DJI Drop), I suggested that the nervous should use a stop loss and sell with the price at 70p to 73p. Sadly, that would have been sensible. Now - if it does not test the nerves too much - is the time to buy back into DJI with the price at 50p to 53p. If the online lottery suspension is removed in the next month or so, the shares should rise sharply. If the management can then carry on doing deals and building the business, the price ought to multiply over the next twelve months. But don't pretend that this is anything but a high-risk, high-return play.

[sjc] 17/4/2015 07:44

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[toyin] 15/4/2015 22:25

Monts12

I admire your faith, but I also think you will be rewarded. It's all about risk reward, that's why I'm still in, I have a sneaky feeling this is going to massive, painful, but ultimately massive...more fool me, maybe?

All the best

[monts12] 15/4/2015 21:49

Michael Walters has posted an interesting commentary on his site today with the title "Its still a lottery" and a Buy recommendation at this level.
(Subscription required).

Fwiw
I hold and averaged down again today...more fool me? Maybe, maybe not. Timescale of lifting of the ban is key.
DYOR

[toyin] 15/4/2015 18:21

quazie12

No problem. I try to see the bright side, unfortunately it hasn't worked with this one. I agree management has handled this extremely badly and normally would have been way out by now, but due to a friend telling me it will come good I broke my golden rule and am stuck with it. But I have to say I remain optimistic for three reasons.

1. I think the model is good.
2. They are regulated.
3. The Chinese are prolific gamblers!

Time will tell.

All the best.

[quazie12] 15/4/2015 17:59

Toyin, apologies for the terminology. The reason I asked the question about working for DJI is that you and Mots seem to me to be eternal defenders of the company on here. You have both said you are not employed nor are you linked to the company so I will not raise that again. What I will continue to do is criticise or praise management on here as I see fit. I did sell out my personal holding after the initial delay by the BOD in informing the market about the initial suspension of lottery sales and I did that for a painful loss. Regrettably I did not sell out another indirect holding at the time.Q12

[quazie12] 15/4/2015 17:51

Ayesha4 that is exactly what I am beginning to suspect. I couldn't get over last week's RNS and when it sits beside today's announcement it gets even worse.

[toyin] 15/4/2015 14:46

quazie12

No I don't work for the company.

I don't class using terms like wtf and the general tone in which your statements are made as debate.

And I for one didn't suggest you leave the board, I just suggested that if you are that upset maybe you should consider an alternative direction regarding your investment.

Now if you want to have a constructive debate on the good and the bad that's great, but loose the aggression it doesn't do you any good!


All the best

[quazie12] 15/4/2015 14:03

Toyin, I'm not aware of slagging anyone off here but I may have been a bit brusque at the suggestion I go away from this board just because I don't follow the line.

[quazie12] 15/4/2015 14:00

Toyin, do you work for this company, wtf is wrong with you guys, do you think ADVFN is just a mouthpiece for ramped up guff or would you ever contemplate that it might be for debate, good OR bad ? I'm sick of blinkered Bulls

[luckykids] 15/4/2015 12:36

I wonder what "commission fees" actually means.
secondly seems strange you can withhold payments that were earned last year because of problem this year.
Although i want to invest, I am not sure of the market regulation and legal side in China, seem a bit dodgy not from the firm but the country ... exactly like I would be unsure of Russian ones
I think I will wait for more clarity.

[monts12] 15/4/2015 12:13

LONDON (Alliance News) - Chinese regulated lottery products company DJI Holdings PLC saw its shares fall Wednesday as it said it expects its results for 2014 to be below market expectations due to delays related to the suspension of online lottery sales in China and due to higher-than-anticipated commission payments.

DJI said that although it expects growth in gross sales to be significantly ahead of market expectations, delays to fee and bonus revenue related to work done in 2014, caused by the suspension of online lottery sales in China, and higher-than-expected fees have meant adjusted operating earnings before interest, taxation, depreciation and amortisation in the fourth quarter of 2014 will be materially lower than expected.

The company said it has been advised by partners that they are unable to complete its fee and bonus payments until the temporary suspension of online lottery sales imposed by the Chinese government ends. Though DJI has performed the necessary services to earn the payments, it said there is a lack of certainty regarding the outcome of current payment negotiations. In order to ensure its results for 2014 are reported in a timely fashion, DJI said it has decided it will recognise this delayed revenue in its 2015 results.

The company also said it incurred higher-than-expected commission fees in the fourth quarter, which rose to a further GBP1 million, driving the Ebitda loss.

"DJI's long term objective remains to be a leading player in this industry and we believe we are well positioned to succeed through our relationships with substantial trading partners and relevant authorities. The company has a strong pipeline of revenue opportunities based on expanding its channels to market and providing new content and we look forward to the remainder of 2015 with confidence," said Chief Executive Darren Mercer.

DJI shares were down 8.6% just after the open to 53.00 pence, one of the worst performers in the AIM All-Share index.

[monts12] 15/4/2015 11:23

quazie12
I agree with Toyin (post 95) and don't think I can add much more than that

best regards

[quazie12] 15/4/2015 10:07

And one last thing Monts, do you think today's RNS fits well with last week's ? I don't.

[quazie12] 15/4/2015 10:05

Monts12It's one thing having a pop at me and saying that everything is a gamble. Yes I agree it is a gamble and we go in with our eyes open. However management here were too slow in informing the market of a major incident at the time of the lottery suspensions and some would level the accusation to them that by not informing the market timeously, then a false market is created.My gripe with this most recent announcement is that I don't believe management are in a position to say what they said and I challenge it. It smacks as an attempt to calm the retail investor down. As we speak, someone with a big holding seems to be selling and a fall of 60% isn't something that should go undebated or unchallenged. I am fed up with Bulls falling in love with shares/management and taking constant aim at messengers.Q12

[neurolodger] 15/4/2015 07:56

Risky Chinese business !

[monts12] 14/4/2015 22:15

I am neither a company employee nor a bull caught in the headlights. But I do sympathise with ordinary people who suffer personal losses. At the risk of sounding patronising, these are the risks you take on these type of "investments".....the gains can be spectacular, losses gut wrenching. It's really just gambling.
I'm gambling that this will come good (very good from here) but I am fully aware that it may not.
I wish you luck in your future investments.