Geong Share Discussion Threads

[sir rational] 20/4/2012 14:41

Geong International remains confident despite difficult trading conditions
11:27 am by Andre LambertiGeong International remains confident of its business model and its potential

Geong International (LON:GNG) said it remains confident in the potential of its business model.

The Chinese enterprise software firm says it continues to win clients for its Integration as a Service (Iaas) and Software as a Service (SaaS) offerings.

However, the trading update issued today, following the end of its financial year on March 31, showed that difficult trading conditions flagged in late February have persisted.

Because of the uncertain global economic environment in general and the effect of slowing growth in China in particular the company now expects to report full-year revenue materially below that recorded last year. Operating profits will be affected too, it said.

Geong had originally anticipated strong trading during the fourth quarter based on an expectation of receiving high margin performance fee revenues on certain SaaS contracts.

Unfortunately these performance fees have been at a lower level than anticipated. It explained that because of slowing economic growth in China many of the key performance indicators set by the company's clients are too optimistic and as a result the level of performance fees has greatly reduced.

Also it says that a long standing global deal with a major partner was anticipated to deliver significant revenues in the final quarter of the financial year, but only a third of these anticipated IaaS contracts were delivered.

Geong believes the shortfall is a direct result of the uncertain global economic environment rather than the quality and appeal of its offering.

Despite the significant revenue shortfall in the final quarter, the company had cash of £5.3 million at March 31 2012.

The board remains confident of Geong's business model and its potential.

Geong says it is still getting new IaaS clients in its core markets and new industries with two strategic partners, and it has not lost any IaaS clients during the quarter and no business partners have moved any business to the company's competitors.

The SaaS business gained 2 new SaaS clients during the final quarter of the financial year, a total of 16 SaaS clients during the year and is in current negotiations with another 5 potential new SaaS clients.

[sir rational] 20/4/2012 14:34

As has been noted, the trades going through are interesting, to say the least.

GNG was not so heavily shorted to explain much of it (ie shorts getting closed).

Clearly certain investors see value at this level.

[cat100] 20/4/2012 14:14

SR was hoping you got out of this. Knew you were in a while back. Hope we get the opposite effect over you know where

[sir rational] 20/4/2012 13:51

Will have to wait for Finals I guess to see where this leaves NAV per share.

I suspect that even with all that is in the RNS, 2011/12 was still profitable so NAV will be higher than LY. (I think the RNS says that.)

I think NAV/share is a minimum of £17853000/37830000 = 47.2p/share

Whilst I concur with many of the negatives above, I do wonder if there has been an over-reaction here (completely understandable).

Profit warning - big one.

Bad management - deliberately (or merely incompetently?) misleading shareholders as they should not have been guiding positively as recently as 22/2.

BUT//

None of the above signifies fraud (in the sense of pinching our money).

LY's accounts were signed off after full checks.

Possibly a big element of kitchen sinking & a new start in today's RNS (as advised by new Nominated Advisor?)

So I'm starting to think that whilst the past has caught up with GNG - receivables owing that won't be paid etc - OTOH NAV/ share could easily lie a long way north of 10p.

Not willing to sell at such a low level so I'll still be here to find out more in July.

[hvs] 20/4/2012 13:41

Beware Chinese bearing gifts used to be Greeks in the old days.

[zangdook] 20/4/2012 13:21

Damn. I was on the point of selling into the brief rise this morning to raise funds for other opportunities, but didn't. That'll learn me.

[greek islander] 20/4/2012 13:00

Surprising number of buys going through.
Bit puzzled

[joe say] 20/4/2012 12:50

I will willingly join any action group organised having recently been bitten by Lees Foods

[rmillaree] 20/4/2012 12:48

If i was a shareholder here i would want a new CEO who has had no connection with the business and who can be trusted to be 100% honest - this individual should be allowed to do whatever is necessary within the business.This individual should then concentrate on providing shareholders with an open an honest summary of how the business is progressing and be tasked to return maximum value for shareholders - probably by focussing business on core profitable area(s) of the business - ditching everything else and returning as much cash as is possible back to shareholders.Hopefully for shareholders the stated financials are at least semi accurate. What % of shares do posters here and independent institutions etc hold as compared to "related parties"?
Unfortunately whilst ideas like this are good in theory they are probably not practicable :(

[joe say] 20/4/2012 12:43

and is today the 1st time they have quantified the aborted acquisition cost fee ?

If it is, surely they've not complied with the disclosure rules

[stegrego] 20/4/2012 12:35

Well, this isnt unexpected IMO.

Management are clueless and possibly worse.

What a load of old cobblers blaming it on China slowing down to 8.5% Thats still enormous growth.

A huge amount of energy and expertise has been wasted on this share and as it currently stands no holders are in profit and the opportunity loss of holding for many years must have really dragged returns for anyone holding anything more than a punts worth.

I think a few posters here who have consistantly backed management and come up with excuse after excuse, need to look at their objectivity.

It does raise the questions again as to whether the cash even exists, but anyone who even gives a monkeys now and isnt already out, well, deserve all they get.

[loafingchard] 20/4/2012 12:31

Well who is buying all the stock today ? Someone seems to want them .

[woodcutter] 20/4/2012 12:15

i have to say this was inevitable and my sympathies go to those long term holders who believed in this business and kept believing, riv, sr, mas, gi etc and particularly jtc who had a very large holding at one time. I went against all my 25 years of investment principles when i bought this in the early days............profit but no cashflow.

Fortunately i sold out some time ago but at a small loss, having at one time been in reasonable profit, and have no plans to go anywhere near it despite the low per.Fortunately my loss here was evened out by my gain on rcg when i got out of that early enough. Two very poorly run companies.

Pro has had a hard time on this board but despite all the positive research it seems he wasn't too far from the mark.

Woody

[longsight] 20/4/2012 12:13

Apple are doing very well in China. I think sales of their iphone were up by 70%. As to the mention of the £350,000 charge - why was this not informed about before?

Be keen to hear some comments from masurenguy who has been very keen to call critics on here "muppets". He shd post on here today & tell us exactly why the sceptics are muppets.

[hugepants] 20/4/2012 11:55

Amusing how they blame slowing economic growth in China. Slowing maybe but its still growing at 8%-9%! The orders should be rolling in.

[yorkie52] 20/4/2012 11:48

Well just sold all my 30,000 at a huge loss but at least i've £3000 in my pocket. I have learnt a lesson - I think. should have sold at 20p earlier in year.Can see this reducing to pennies

[mattjos] 20/4/2012 11:25

Grief ... mgmnt are having a bad spell here at present. They could do with a more experienced board member coming in to steady the ship here & try to rebuild some credibility.

[goliard] 20/4/2012 11:16

Some people still clutching at straws here and even rolling out the 'it is so cheap it will be taken over' line! Complete farce and devoid of any credibility now.

[geheimnis2] 20/4/2012 11:13

give us a "woof woof", ratty!

;-)

[sir rational] 20/4/2012 11:12

Low ball offer a definite possibility here.

I do wonder if it might come from within