Software Circle Share Discussion Threads

[explorer88] 21/4/2010 09:45:52

morning buggy - only in your short term analysis of H1, extrapolating from H2.

whilst SAT may be important, don't underestimate other growth areas - especially their RFID work ;-)

[buggy] 21/4/2010 09:13:47

explorer,


Thought that you think I was being over exuberant. I think we will see 10X the current price in less than 5 years.

Once SAT comes on there will be a step change in TO. The economic downturn was a blessing in disfuise for SFT as it forced them to diversify, before that they were overly dependent on SAT.

I am also pleased with the apointment of a new Chairman, may help take the conmpany to a new level.( Not that I have any problem with the previous one, but founding members are not always best suited for moving a company to the next level, sometimes the injection of new idea and new blood is required).

[explorer88] 21/4/2010 08:56:58

I've been in regular contact with Sinosoft and know their business pretty well.

I have no doubt that Sinosoft will become a £75m - £150m m/c company over time 5x - 10x current m/c

Like one or two others i have built a large long term holding in the business

GLA

[stewolf] 21/4/2010 08:41:23

Just looked in after being on hols (took ages to get back!) and what a pleasant surprise. Steady as she goes (with a pick up in H2) and another divi to collect.

[boadicea] 20/4/2010 15:09:12

contrarian - I'm afraid that with a capitalisation of about £15M the company is too small for a dual listing. My point was rather that AIM is currently providing a cheap way into Eastern promise.

My hope is that UK valuations will gradually close the gap, or that seeing the low rating of Eastern companies on AIM, some of them will be recognised as cheap take-over targets. Whether SFT was one of these might not matter as the resultant up-rating would likely spread across the sector.

Of course, larger companies, like CHNS or WCC, are in a different position with a wider choice of listing strategies.

[contrarian2investor] 20/4/2010 11:49:47

boadicea,

I agree with your above points.
It has been slow but steady progress with the dividend offsetting the wait for fuller investor appreciation. Which as you say could be enhanced by a Far East listing. As long as their Aim listing is retained so that we also get to enjoy the ride.

c2i

[gjb] 20/4/2010 11:23:49

That's a fair comment and the past has been bad for TOMCO.
Seems to be a lot of over exuberance on the TOM bullet board which is clouding peoples opinion.

I need it to get back up to 1.5p to get my money back.

I'm hoping Chris Brown can wipe the slate clean as he appears to have good credentials.

[zangdook] 20/4/2010 10:38:25

gjb
OT
I have a small holding in TOM but currently plan to sell as soon as it relists. I don't trust the remnants of the previous board so I haven't looked into the new developments closely enough to comment.

[gjb] 20/4/2010 10:19:03

P/E of only 6 - should be higher in my opinion.

zangdook - off subject but what's your opinion of TOMCO?

[zangdook] 20/4/2010 10:14:08

Results. 0.31p dividend. P/E about 6.

[gjb] 20/4/2010 10:13:28

Rock solid set of figures plus a proposed divi of 0.31 pence.
Only up half a pence so far today but should be higher based on profit achieved.

[contrarian2investor] 16/4/2010 20:00:21

garth,

Good to see you on board. Don't you and rivaldo usually come as a pair.
It is always good to have some more shrewdies on board.

c2i

[garth] 16/4/2010 18:33:31

I added some more earlier this week too.

Saw there were 2 posts and thought maybe we'd moved up again. Should clear 10p once the results are out. Trading statement was good and perhaps we'll see an improving outlook...

G.

[boadicea] 16/4/2010 18:05:53

The last two annual results were -
28 April 2008
15 May 2009
I would hope to see them before the end of this month if only on the basis that late results are more often poor results!

[cheeky13] 16/4/2010 17:02:50

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

[explorer88] 22/3/2010 20:27:06

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 19:49:19

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 18:39:52

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 18:07:14

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 12:54:40

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 09:49:16

Thanks for the comment Boadicea

[boadicea] 20/3/2010 14:36:50

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 13:55:29

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

G.

[stewolf] 20/3/2010 08:37:03

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.