Vianet Share Discussion Threads

[felix99] 06/2/2013 19:56

Thanks Paul - I probably need to revisit it and look at the numbers in more detail and perhaps I may then pick up some more stock

[paulypilot] 06/2/2013 18:21

Hi Felix,

The Brulines contracts are on long-term (5-year) recurring revenue contracts, to that underpins a level of about 10-12p EPS, roughly (not got figures to hand, but it's that ballpark), and that pays the divis (5% yield).

So it should be pretty much copper-bottomed at around a quid a share in my opinion just on Brulines earnings. The upside on the other stuff, mainly USA expansion & vending telemetry, is pretty much in for free.
There's also the fuel monitoring business, which is helping EPS by moving from losses into profit this year. Any upside on that is a bonus IMO.

The thing that I like best is that the former CEO/ now Chairman, has been hoovering up shares himself at just below the current SP, totalling about £317k in the last year. That to my mind clearly demonstrates confidence, and I've found it usually pays to follow significant Director buying.

Regards, Paul.

[felix99] 06/2/2013 12:33

My only concern is with the contract news and whether it is drifting back in time - in which case you might have some short term earnings pressure.?

I would like to pile in on the contract news but as ever when that happens you won;t get any stock for love nor money - am loathed to add any more at present given the liquidity and whether there are some contract delays being priced in here by those in the know ?

[paulypilot] 06/2/2013 12:05

The seller was New Solera, and their RNS of 7 Jan 2013 clearly states that they have zero shares remaining, so they are gone.

What I think is happening, is that some people who bought on the initial spike from 103p to 117p are getting bored & moving on. You have to remember that many small investors have got the attention span of a fruit fly! ;-)
So they're constantly churning their portfolios to chase the latest hot stock idea. Same thing has been happening with IndigoVision - people drift off when the price starts falling, and that then feeds further falls, and there's a gap until value players get interested again at a lower price.

My view is that where the fundamentals are good, it pays to just sit tight, and in any case with VNET we're getting paid a 5% dividend to sit tight, which is a pretty nice situation.

There should be contract news fairly soon on the vending & USA growth. Meanwhile the core Brulines business just churns out cashflow.

DYOR as usual, just in my opinion.

Regards, Paul.

[saucepan] 05/2/2013 18:44

A re-test of 110p would technically be perfect for the next upleg. It is already there as good as dammit, and may not need to go back there all the way. It will be interesting to see what tomorrow brings. I expect the bounce to be strong.

[cambium] 05/2/2013 16:53

Good point to buy on that chart aswell.

[cockneyrebel] 05/2/2013 16:50

VNET was one of SCSW's Naps in the Jan issue.

They've yet to do a proper write up on the stock and give it a formal tip, the only one in their naps that hasn't had the full tip yet.

SCSW out this weekend - a good chance VNET features heavily imo.

All imo/dyor etc.

CR

[masurenguy] 25/1/2013 15:30

Evem more reason for pub and bar owners to minimise wastage and to optimise profits on beer sales by utilizing the facility to enable them to reconcile volume with revenue !

Beer sales dry up as tax throttles the pint

Brits drank 138m fewer pints - or 1.5m a day - in the final 3 months of 2012 as beer sales fell 4.7% last year. The British Beer & Pub Association blamed a mix of rising government tax and cash-strapped consumers. "These figures show that the government needs to stop its full-on tax assault on our vital beer and pub industry. We have had tax hikes of 42% since March 2008," BBPA chief executive Brigid Simmonds said on Friday. So-called on-trade sales at pubs and restaurants and off-trade sales at shops and supermarkets fell almost equally, as the industry felt the effect on consumers of worries about the economy and muted wage growth. The government has been raising the tax on beer by 2 percentage points above the inflation rate each year and plans to do so until 2014/15. In November, lawmakers saw a vote to review the policy rejected by the treasury. Drinkers pay 42% more tax on beer since the so-called tax escalator was introduced in 2008, during which period 6,000 pubs have closed, industry research showed. Groups such as Greene King and JD Wetherspoon have been among the better-performing pub companies throughout the downturn, helped by value-led food and drink offers chiming with cost-conscious customers. Beer sales fell 3.1% in 2011.

[jeffian] 16/1/2013 10:19

Among tenants, the suspicion will always remain that the principal function of Brulines - even the more sophisticated iDraught version - is to 'catch them out'. It is interesting, however, that almost all the pubco's are building a bigger franchised estate within their tenanted estate (i.e. where the tenant gets a share of turnover but the pubco carries the running costs, does the product buying and sets the prices). MARS now have something like 500 pubs on their new Retail Agreement, ETI have around 300 'Beacon' pubs and Spirit and GNK are developing and growing a franchise offer. This is where iDraught comes into its own; indeed, it's almost a 'must-have' where costs and expenditure are being controlled centrally.

[0rb1t] 16/1/2013 08:08

iDraught got a mention in yesterday's Spirit Pub Company plc - Q1 IMS. Spirit Pub recently ordered 400 iDraught terminals from us:



"We have also completed the rollout of the iDraught dispense system across our Leased pubs which should help to drive sales and deliver product quality improvement for our licensees."

"Our plans for our Leased estate remain on track as we look to help our licensees to develop their retail offers which we will support with continued innovation such as our franchise trials which are now underway. "

[0rb1t] 16/1/2013 07:31

From JD WETHERSPOON PLC pre-close this morning:

In the year to date (24 weeks to 13 January 2013), like-for-like sales increased by 7.6%.

Doesn't directly impact VNET but shows the pub industry is doing OK still.

[masurenguy] 14/1/2013 21:30

These are just gross generalisations about AIM companies. There are plenty of UK AIM listed companies that have crashed or become insolvent over the past 5 years with management no more trustworthy than some overseas based companies.

For example two overseas AIM listed companies which I am currently invested in are GBO (Greek based) with business accross many markets and TPL (Canadian) an oiler with both assets and production in Kazakhistan, Tajikistan and Uzbeckistan and neither of them pay dividends either. I consider both to be good investment opportunities on their individual merits. I think that it is absurd for people to employ blanket generalisations as a basis for their investment decisions since this can often result in throwing
the baby out with the bathwater.

[cockneyrebel] 14/1/2013 21:06

You used to be have to have a couple of years priofitable trading to list on AIM I think.

Today all you need is to be able to work a pencil with modest aptitude.

CR

[jamielein] 14/1/2013 20:25

Thanks CR, everything you say makes a lot of sense.

I generally look for growth and dividend paying small cap shares and haven't really focused on where they're based. It appears almost all of the shares that fit my criteria are actually UK based though - there's the odd one or two that aren't, such as Globo. I also sometimes make exceptions to the dividend part, for example Tracsis (though they do now pay a small dividend).

I'm surprised at how many companies on AIM have a terrible track record and make no profit at all, yet people still buy their shares.

Jamie

P.S. quite surprised at VNET's valuation. I think there's another large seller as a company that has these prospects on a PE of just 12 seems wrong. Even based on last year's 15% growth of earnings, I would have thought it should be on a PE of around 15, so £1.50 at least.

[cockneyrebel] 14/1/2013 17:33

Re foreign AIM jamielein - yep, there might be exceptions - but how can you be sure you've identified one when it's stacked against you on the odds? For everyone you get right you'll probably get 10 wrong imo. You just don't know when you're investing in a bad one imo.

Go where the odds are more in your favour and buy UK fully listed imo. If you buy AIM make sure they are UK and pay a divi imo. If you buy UK non divi AIM remember it's likely to be riskier and more of a punt and adjust your stake accordingly. When you buy foreign AIM you may aw well put the money on a horse imo, even if you know nothing about horse racing - the odds are better.

CR

[jamielein] 14/1/2013 13:56

Yes, and on topic, I did join the VNET party a little late (early morning today), but can see the potential here. It's definitely not rated for growth, though the company isn't without its risks. We need to see a few US contracts imo before this really takes off.

Wish I'd have done more research a month or two ago when I saw them mentioned on PaulyPilot's blog!

[interceptor2] 14/1/2013 13:29

Sorry for O/T on such a positive day for VNET. But...

There might be the odd exception, but for anyone still considering a AIM-Listed overseas company, take look at the GNG thread. A small chinese AIM stock that has changed the view of many respected posters. Chinese AIM stocks are the worst imv.

Back to VNET now I promise.

ic2...

[jamielein] 14/1/2013 13:21

Surely there must be some exceptions to this though? They can't all be bad, though I agree, I generally avoid them unless there'a a very good investment case.

[paulypilot] 14/1/2013 12:59

johnv,

Yes very much so!
I lost £250k on an Israeli AIM-Listed company a few years ago,and there have been others too.

P.

[johnv] 14/1/2013 12:49

PP, you sound as though you have learnt this from experience.

[paulypilot] 14/1/2013 12:42

I also avoid all AIM-Listed overseas companies.

Why would any decent foreign company list on a foreign (to them), largely unregulated, stock market (i.e. AIM)??? That answers the question as to why you should never invest in any AIM foreign company. Just IMO.

PP.