Establishment Investment Share Discussion Threads

[greek islander] 24/9/2008 09:19

UK-Analyst this morning

External adverse factors, including adverse weather conditions, earthquakes and political protests, caused interim profits to be below expectations at South China-focused travel operator Et-China (ETC), sending the shares reeling by 23.5p to 78p. However, the company still managed underlying revenue growth of 21%. Revenue for the six months to end-June rose to 56.7 million pounds from 17.7 million pounds, reflecting the impact from acquisitions, including a two-month contribution from the tour operating business, GZL. Pre-tax losses widened to 1.5 million pounds from 1.4 million pounds. Within GZL the strongest growth came from Outbound Tours, where revenue grew by 33.4%, as the company rode the wave of popularity among Chinese nationals for overseas travel. The e-business division saw revenues rise 41%. Cash and cash equivalents at the end of the period had risen to 17.1 million pounds from 9.3 million pounds a year earlier, while net cash stood at £7.5 million. Chairman Ian Smith believes the company is well placed to benefit from the continued growth of the Chinese travel market in its chosen role as an industry consolidator. "Whilst the first half has been disappointing, we feel that Et-china will be a leader in the consolidation exercise taking place in Southern China," commented Seymour Pierce, which has a 'buy' stance and a 155p price target for the shares. "With its strong balance sheet, GZL a strong partner and the infrastructure in place, Et-china's long-term prospects look extremely positive," it added.

[papalpower] 11/8/2008 03:11

2009 might not be very "hot" for China - which might explain the great weakness there is in many stocks related to the now "slowing" China machine.


Taking this Times article :




From The Sunday Times August 10, 2008

The dream is over as China wakes up to global downturn

The stock markets are falling and exporters are going to the wall - Michael Sheridan in Shenzhen

IT IS RARE to see an estate agent running out of his office after a prospective client, but the young........................






When taking in with this article :






Starts to lead to, as the writer said, the pin thats under the bubble. The construction boom in China has employed many people, though its corrupt ways its left banks holding far too much NPL's (Non Performing Loans) - the real NPL figures would frighten people, even the official statistics are worrying.

The building has gone on because it could even though it was not needed, because people made loads of money and at the end of the day nobody cared if the property remained empty as the "book value" could be kept high and was rising so nobody knew about all the corruption that went into it.

This has been happening for years and years now, and as I have often said if you are in China then go around at night and see just how many buildings are completely empty.

Lots of "analysts" have been imo hyping away about so many people going to migrate to cities.........but how can they.

They need a job and money to move........and with unemployment rising how are all these "rice farmers and peasants" going to be moving into these luxurious new apartments being built everywhere.... It was always a load of nonsense but in bull markets people overlook it and ride the wave.


If, as its suspected, that a property collapse is coming, it would be devastating for the Chinese economy. As the writer said a true bubble is one where people cannot see it ever stopping - and when it does, the effect is stunning.

[longshanks] 21/7/2008 17:49

The 80p resistance should be pretty strong - cutoff point for many of the large holders. I am a definite buyer if it gets down there - although with the exhibited volatility, this share is one only for the brave.

[papalpower] 21/7/2008 08:53

And its starting to fall now longshanks.

A test of 80p coming ?

[longshanks] 02/7/2008 12:52

Seems to have lost all support now. If it falls through 90p, next resistance is 80p.

[greek islander] 18/6/2008 23:36

UK Analyst this evening -

Et-China (ETC), the AIM-listed travel services group which focusses on South China, said it has entered into a partnership with Industrial and Commercial Bank of China (ICBC) to provide travel services, e-booking and payment platforms for ICBC's customers. The deal will give E--China access to ICBC's 2.7 million corporate customers, 3 million premium account holders and 170 million individual customers nationwide. "Partnering with ICBC to launch this e-platform adds another leading partner to our relationships with China's leading banks," commented CEO Matthew Ng. "Following our alliance with China Minsheng Banking Corporation, this is another significant step in raising the Group's profile, not only in the fast growing region of South China but right across the country," he added. Et-China shares finished flat at 119.5p.

[greek islander] 18/6/2008 12:21

Impressive and I am surprised the share price has not moved on the news but still no results!!!!!!

[longshanks] 12/6/2008 12:56

I am out of ETC ...and am, overall, 70% cash right now...don't feel too confident about many stocks with the current cloud of uncertainty in these markets.

I don't tend to panic too easily about such things as this though. To say "mid-May" is vague enough and it could be that the CEO just wasn't aware of how long it would take for the accounts to be audited. If the language barrier is poor for you imagine what it is like for the auditors!

Still think ETC has a bright future...and will look to buy in again if this gets back below £1.

[greek islander] 11/6/2008 18:35

Prompted by your reply longshanks, I asked my senior broker about this and she said that a delayed set of results - especially over 2-3 weeks - would normally set alarm bells ringing. With a main FTSE company it would be a disaster. With a UK based AIM company it would be pretty alarming. However she agrees with longshanks that with Chinese AIM companies it could mean nothing.

She said though, that if she had a substantial holding in any AIM company that delayed as long as this, she would at least seriously reduce her exposure and whatever the results finally say, she feels that I have made the right decision.
I know of one other shareholder who offloaded even earlier than I did though he only had a very small amount of stock - about £1.5k I think.
It is very frustrating for me, as without this glitch I would have been looking to seriously increase my holding in August when I come into substantial cash.
longshanks, no point phoning, as the language barrier was quite a substantial one when I contacted them directly in January this year. Have you spoken to them before?

[longshanks] 11/6/2008 16:17

I wouldn't get too worked up about it GI. There could be many a good reason for a delay in issuing results.

You could try phoning. Your email may well be stuck in a junk folder for all you know.

AIM is not a heavily regulated market; results will need to be issued by a certain date but that is all. If they come in earlier - so be it.

You expect a small company to drop everything to please its small PI's but I think such an expectation is unrealistic given the time pressures on most executives - those that have the time to reply are the ones I would be most concerned about!

[greek islander] 11/6/2008 14:42

Sorry to blow on about this but am I and a few PIs on this BB the only ones to be totally flumaxed at the fact that ETC stated that reults would be out "mid May" and not only have we had no results but we have also had no comment as to why not?
Surely AIM has rules about announcements which might affect peoples investing patterns. I for one, quite often buy my holding just prior to results.
Though I hold no stock here any more, having jetisoned all of my holding over a four day period at the beginning of the month (because no results were forthcoming), I remain totally perplexed, as I have never known in all my years of investing, a oompany fail to explain the non appearance of results almost a whole month after they were expected.
Also the silence on this BB is deafening. I am outraged as FOUR emails to the company on the subject have been totally ignored.
This is outrageous!

[horneblower] 09/6/2008 10:05

Agreed. However, I rather like the chart. If news arrives and it's halfway reasonable, then this formation should go to just below £2.

[greek islander] 09/6/2008 09:51

Still nothing! This is unacceptable.

[papalpower] 07/6/2008 15:22

Still is..........

[morgan reynolds] 06/6/2008 12:17

sold out...don't like it

[leighff] 06/6/2008 11:06

ETC is not actually a new company. Its tickets businessis is about 10 years old and its Travel Services is about 30 years old (and it is the biggest in Southern China). Southern China (Guangdong) is one of richest provinces of China, local people travel regularly.

[leighff] 06/6/2008 11:06

ETC is not actually a new company. Its tickets businessis is about 10 years old and its Travel Services is about 30 years old (and it is the biggest in Southern China). Southern China (Guangdong) is one of richest provinces of China, local people travel regularly.

[greek islander] 06/6/2008 10:47

Yes their was a formal announcement to that effect.
Absolutely - trade is booming but having a magical revenue stream is one thing, making it show a substantial NET profit, is another. I am sure that ETC will be NET profitable but for ages now they have referred to huge gross profits that have not been converted into real income.
Running a new burgeoning company is expensive and in order to expand and continue growing, then most of the working capital is going to be used up. Hence the need for raising external cash.
It is also the most dangerous period, when a lack of liquidity and over optimistic expansion can kill a company dead. I don't think this is a likely scenario here and if the results (when they finally come) are as good as we have been led to expect, then the share price will probably hit 200p pretty immediately.
However it is a risk too far for me.

[leighff] 06/6/2008 10:27

I am not try to convince anyone to buy this share. investment is risky.

Reason i keep holding is I have been to Guangzhou, I know ETC is a big company there and travel and hotel sector as a whole is booming in China. and other similar companys based in other big cities are doing well first quarter.

Did ETC promise a result three weeks ago? I didnt know that, there was nothing in RNS.

[greek islander] 06/6/2008 08:42

After what happened at GNG, I am very much more wary of uncontrolled Chinese small caps. If I had received a response to one of my three emails (which as a shareholder) I was entitled to, I might have been feeling better but the deafening silence and no results that were specifically promised for almost three weeks ago, means I have lost confidence. You cannot just announce a results date and then ignore it with no further announcement.
We had been waiting for these results (with the promise of breaking into net profitablility) for a long while now.
I am sure ETC will be a huge investment for you all and I will regret my sale but one has got to follow ones nose. I have taken a substantial profit and am satisfied - good luck to all holders, I shall keep an eye on this company.

[morgan reynolds] 06/6/2008 08:18

hope this isn't another RETV

[leighff] 06/6/2008 02:42

This company always announce previous quarter results about 3 months (or 2 months 14 days) later.

This is Olympic year in China. Travel and hotel stocks are doing very well in Chinese stock exchange. Another similar stock listed in US (CTRIP) announced its unaudited financial results for the quarter ended March 31, 2008 two weeks ago and its net income rose 52% ; Net Rev Climbs 47% On Segment Gains.

[greek islander] 05/6/2008 16:09

Still no results and no announcement as to why.
I have sent three emails now.

I have sold all my holding and banked my profit.