Software Circle Share Discussion Threads

[cheeky13] 16/4/2010 17:02

Bought again 10000 on the plus market, anyone know when finals will be announced

[explorer88] 22/3/2010 20:27

buggy - i admire your enthusiasm for SFT; however the fact that SFT's turnover is historically weighted to H2 needs to be factored into your analysis.

[stewolf] 22/3/2010 19:49

Always good to read the comment on this bb. SFT has to be seen as a longer term investment, imo, as China seems to be at the early stages of mass 'computerisation' of officialdom. The market for it though must be huge.

One cautionary thought, as mentioned a few posts ago, is that of a withdrawal of SFT's AIM listing. It's always a possibility here and one to be mindful of when weighing up a decision to buy these shares. AIM can seem like a cowboy act at times!

[buggy] 22/3/2010 18:39

c2i,

Was in SFT about a 18 months ago but sold out at a loss to cover other areas as at that time I did not do any deep analysis and just bought for an exposure to China based on other's tip.

Having done a deeper research this time, I am moving what I can back into SFT, with at least a 2 year investment window. I expect this to multibag several times over in that period.
[Not enough shares in free float so I would not be tempted to trade these besides I do not have time to watch every move of a share price].

They are on a growing area, China. The impressive performance of H2 2009 was achieved even when the SAT program was on hold. They have diversified their range of offering and no longer over dependent on SAT. The acquisition of the new subsidiary will present a hefty kick to turnover, as will SAT whenever it comes on stream again.. but I have discounted the revioval of SAT in my analysis.

Finally I am comfortable investing in this company far more than in some other Chinese companies, due to the perceived lack of corporate governance of some Chinese companies.

I feel I can implicitly trust the management here:
Apparently when this was floated then CEO sold shares worth £2Mill and distributed the proceeds to her workers!!!. Have anyone also noticed that they have not awarded themselves oodles of share options at discount prices as per normal practice. Respects where it is due!!! I am impressed.

Not to forget that they pay a healthy dividend, although my main aim is capital growth but this company covers all the bases.

[contrarian2investor] 22/3/2010 18:07

buggy,

That is a very positive analysis indeed, for a good and solid company. Which I and many others have very high hopes of, personally I (and many other long-term holders) would prefer SFT to grow and appreciate gradually. Although the company has not been immune of the attention of the the herd of short-termists that usually pump and dump most Chinese stocks. You will see from the number of quality bbers & posts on this thread that most holders are in for the long-term. So welcome on-board.



c2i

[buggy] 22/3/2010 12:54

Reason for buying in:

Not sure if anyone has done a comparative analysis between 2008 performance and the projected 2009 performance and deduced this year's performnce from the known data.

Really gives a compllling case for buying in now.


Usaul disclaimers:
I have a holding in SFT and will still be accumulating as cash permits.This is not an investment advice. Just sharing my reasons for buying and continue to add, added another 100K today. DYOR etc.

Last year's performances:

Year Ending: 31-Dec-08
Revenue ($m): 12.08
Pre-tax ($m): 3.79
EPS: 2.07¢
P/E: 3.3
PEG: n/a
EPS Grth : -29%
Div: 0.45¢
Div Yield: 6.7%


Analyst Forcast for this year:

Year Ending: 31-Dec-09
Revenue (£m) : 13.50
Pre-tax (£m) : 4.00
EPS: 1.32p
P/E: 6.3
PEG: n/a
EPS Grt: -4%
Div: 0.33p
Div Yield : 4.0%


2009 H1 Performance:

H1 to: 30-06-2009
Revenue ($m) : 4.50
Pre-tax ($m) : 0.8



Trading update Statement gives these insight into H2 performance:

As a result, the directors are of the opinion that revenue for the year ended 31
December 2009 is expected to exceed current market expectations.
........improved sales have resulted in profits after tax being broadly in line with market expectations.


TurnOver Analysis:

Analyst Expectaton is £13.5Mil, (Lets be safe and assume they meant $13.5 Mil). H1 Turnover is $4.5Mill. It mean that due to improvents in the Chinese economy SFT must have generated around $10 Mill Turnover in the second half of 2009.

If you accept that the Chinese economy is still in its upwards curve since Dec 2009, then you can project what the income going forward, (for this year), will be like. Again if the analysts forcast is based on £ instead of $ currency then the performance becomes even more eye popping.

If SFT stands still at $10Mil per half year, (no further improvements in trade) then they will have a Turnover of $20Mill for this year!!!!


Profit Analysis:

Analyst expectation £4M , again to be safe lets use $4Mill. H1 Profit =$0.8 hence again it implies that SFT generated a profit of over $3.2 Mill in the second half of the year.

This future revenue growth is just based on the increasing activity in the Chinese economy. I have not factored in the contribution from the newly acquired subsidiary which I expect to start contibution to Turnover and bottom line this year.

Again no investment advice intended. Just sharing my analysis as a starting point for yours. I AM IN and accumulating when funds permits as well as moving less attractive investments into this share.

[garth] 21/3/2010 09:49

Thanks for the comment Boadicea

[boadicea] 20/3/2010 14:36

No.
They might conceivably move their listing and withdraw from AIM but it would be difficult to justify dual listing for a company with a capitalisation of less than £14m.
I think no change is more likely to be the case, at least until they grow to £50m+.

[garth] 20/3/2010 13:55

Just watching JHL but holding SFT. Are SFT dual-listed?

G.

[stewolf] 20/3/2010 08:37

I agree, a little more regular communication with shareholders is needed, information can be hard to come by. The story with this Company, though, is compelling and still at a relatively early stage the way China is pushing forward with digitisation . . and Sinosoft are in an intriguing position in this regard.

[buggy] 19/3/2010 13:35

Stewolf,

I am hoping that the acquired company can add around £2Mill to the turn over.

To be honest I can't wait for the 2009 results as the chairman's address should provide a good pointer to the future.

Once the cat is out of the bag it would be much more difficult to get hold of the shares. It is not easy even at this time when the share is still below the proverbial radar.

I will continue adding when I can even the dividend payout is healthy, (around 4% payout).

If the company can just start releasing more RNS to let keep investors up to date with events ... but then you can't have it both ways as the lack of communication is what allowed me to buy in at this low price.

[stewolf] 19/3/2010 12:52

Buggy, great find with that article.I've continued to hold a few of these
through the recent downturn, but every now and then have felt the need to research back to keep up the justification for my investment. It still holds, and the article you present is a nice reinforcement of my own rationale for investing here. Adding a few at this price more is even on the cards! . .

[buggy] 19/3/2010 11:45

Not sure if this has been posted before but a write on on SINOSOFT dated 5th Jan 2010. ... Really states the investment case

[duplicate book] 19/3/2010 10:23

......and there always seems to be a ready seller on any small rise!!!

[drewz] 19/3/2010 10:15

Well said. There are still a few of us long-term believers looking in here, though news is always thin on the ground from SFT.

[buggy] 18/3/2010 23:36

Have moved back into SFT even though no one else seems to be bothered with the share.

I thought that the dynamics in the economy has changed and this will feed well into SFT bottom line... China growing strongly and rest of the world economyy seems to have bottomed and in an upward curve.

SFT was making profit even during the worst of the crisis so I believe that its TO and profits will grow exponentially with the growing Chinese economy.
The new company acquired last year should also start to make a contribution to TO and the bottom line.I believe that the next Interim will surprise and we may well get an indication of how things are going in the CEO address in the 2009 results, due for release in about 3-4 weeks time.

As the share is illiquid and is hard to come by I have decided to start accumulating now in batches of 25K which seems to be the online limit. I have a 2 year investment window and expect SFT to multibag in that time frame. [Restarting of the SAT project will also bring a hefty uplift ...but SFT has diversified its revenue stream that I still expect a multibag without counting on the restart of the SAT project]


Anyway above is my view and events will soon tell me if I am right or wrong. DYOR

[drewz] 19/2/2010 00:39

And why not indeed.

[garth] 18/2/2010 18:38

We're slowly edging higher again....

[stewolf] 16/1/2010 15:58

boadicea, that's a fair point. Maybe now a steady move north can take shape.

[boadicea] 15/1/2010 20:50

garth - If an mm took 250k at 7.25p my guess is that he expects to sell them for more than that. Of course, he could be wrong, but now that block is out of the way I would expect a modest advance on Monday if any buying interest appears, possibly creeping back towards 9p over the week.
Anyway, I'm not grumbling as I hadn't expected to get any as low as 7.3p although unfortunately didn't have much spare cash available - and that was pinched opportunistically from some I had earmarked for elsewhere (SSY actually, which has also dipped this week).

Stewolf - The seller may well have been offered even less before the tu was issued and the mm could better assess his chances of shifting them.

[buggy] 15/1/2010 20:45

Personal View:

Good long term hold .. but is not going anywhere fast in the immediate future. Reslts will meet expectations and nothing spectacular.

You will get a dividend of 4% here if you are investing for income, but most people are investing for capital growth. Currently there are a mirad of opportunities in the market that will outperform this in the short to meduim term.

As this is not heading anywhere fast, (but a safe bet), a lot of money is moving into other opportunities with a realisation that they can still come back into SFT later without having to pay a heavy premuim. I do not expect this to be above 9p, (at best), in the next six months.

DYOR. Have a minor holding just to keep my hand in but have sold out the majority to take advantage of other opportunities.

[garth] 15/1/2010 19:58

Almost added some more today but wondered whether we might get a bit lower yet looking at the chart.

And yes, I know - charts are useless for these illiquid, AIM, Chinese...... etc. stocks ;0)

[stewolf] 15/1/2010 18:48

Can't figure how it can jump up 15 odd percent for a while one day on a seemingly good update only for someone to dump a quarter mil the very next day at such a low price. Still holding from way back, but it's a long wait! At least the divi lessens the frustration . . GLTA.

[drewz] 15/1/2010 18:04

Worth buying for income at this price.

[stewjames] 15/1/2010 17:13

boadicea, I would think it's just because the TU greatly reduces the chances of any substantial shareprice boosting events for the next 4-6 months. Given the illiquidity, it only takes a small number of people to sell because they're bored and/or think there's a better opportunity elsewhere to lower the price.