This share has started to rise rapidly after the trading update which was very encouraging. The company provides batteries for mobiles etc and alternative power supplies. floated at 135p-should be a good investment with results due on April 18th.

This one is on my watch list, will buy in on the first fall, could be some epic rise on these ones. Feel China connection will make this stock a fast and volotile stock...

From LSE web site


China Shoto is one of Chinas leading companies engaged in the design, development, manufacture and sale of industrial batteries and power supply systems. The Company is principally involved in the production of rechargeable lead acid batteries which are sold as individual units or as battery systems for a wide range of industrial applications. It also supplies related products such as chargers, power equipment and battery accessories.



China Shotos products are widely used in telecoms, electrical power, the Uninterruptible Power Supply (UPS) market, electrical bicycles, railway locomotives and passenger trains and other markets. The Company is a leading supplier of lead acid batteries to major Chinese companies such as China Telecom, China Mobile, China Unicom, China Netcom and China Tietong.



Following the successful placing of 4,615,385 new Ordinary Shares at 130 pence each, the Company has raised 6 million in gross proceeds from the placing, giving a market capitalisation on admission of 26 million at the Placing price.



A record number of Chinese companies have joined AIM in 2005. So far this year, 9 Chinese companies have joined AIM, raising a combined total of 25.04 million.



With China Shotos admission, a total of 14 companies from China are now quoted on AIM, with a combined market capitalisation of 218.31 million.



The listing is a natural step in China Shotos development. The proceeds from the placing will be used to construct a new Power VRLA battery plant; to increase its holding in Beijing Full Three Dimension Power Engineering Co., Ltd. ("FTD"), a leading turbine design and refurbishment service provider in China, and to provide working capital for the Group.



Cao Guifa, Chairman of China Shoto plc, commented:



We are very pleased with the positive response to China Shotos IPO. We now look forward to using the funds raised from the flotation to take China Shoto to the next stage of growth and to continue to build on the success of our already strong brand and reputation. The funds raised will allow us to increase our penetration of our domestic market and for us to expand sales overseas. We now look forward to working with our new institutional shareholders and taking the Group to the next stage of its development.



Seymour Pierce is acting as Nominated Adviser and as Broker to the Company.

thanks-tonker good posting.

Been doing a bit of research into the Company over the last few days.
The shares appear to be a bargain, on a prospective P/E below 10 yet with a tremendous growth potential that, were it a UK based company, would be trading at around 50% above the current share price of 175p.
Couldn't resist a small punt today.

;o)

glad you've joined in-high hopes for this one!!

Moneyplus

There seems to be a solid wall of buying this morning.
It seemed rude not to top up !!!
So I did at 180p

IMO the huge disparity in the prospective PE just because it is a Chinese based company will certainly come down to some extent.

A UK company with similar growth prospects would command an SP in the region of 275-300p.

There seems no good reason for CHNS not to be at least 225p now and probably much higher once the results are out of the way in mid-April.

It's a bargain.

;o)

cheers Ian. hope others are continuing to wake up to this one 275p would suit me !!

I'm in from this morning.

Looking for a run up to results, which from that last trading statement should make pleasant reading.

all the best

capa

you''ve put the price up capa!!

Great set of results announced this morning.

19.80p eps

100% growth, positive outlook, dividends on the horizon all on a single multiple!

capa

With you on this one capa , potential to double over coming months.

Wouldn't disagree with you Dil, nice to have you on board.

all the best

capa

Not unexpected profit taking after hitting 225p at one stage this morning.
I haven't sold any - if anything I'm hoping for the chance to top up a wee bit more.

Ian

If youve had a good day please consider giving a donation to the lads dressed as Elvis racing 350 miles to the North Pole on behalf of Great Ormond Street Hospital It makes the London Marathon seem like a stroll in the park!
To donate or view how theyre getting on visit
http://www.elvispolarchallenge.co.uk/
thanks for your time

very tempted but decided to hold as the market and potential is so massive. investors only just noticing this one I think.

I wouldn't dream of selling below 3.00, got some more yesterday at 2.12.

Looking forward, they should easily do 25p e.p.s, stick that on a not too taxing multiple of 12 and you've got 3.00.

If life was only so simple !

capa

.

finally bit the bullet and just bought a few to tuck away! Didnt listen to my advisor at 120 so rather gutter, but I suspect a divi will be announced sooner than later and EPS for next year is rumoured to be much higher than market currently expects.
Even from here Ive heard multi bagger SP mention within 12 months!

'Buy' Recommendation in Investors Chronicle - the magazine points out that, with sales being achieved in the telecoms, energy and retail industries, the rating seems too low.

typical! I took profits yesterday as I thought it was pulling back and hoped to get back in much lower-I'll have to watch and wait a bit longer now.

I'm still in , just a matter of time before these take off imo.

Looks like these have bottomed out and have turned the corner, significantly in the blue today up 5p

Zak Mir of Zaks-TA.com Says Buy China Shoto at 166.5p, initial target of 184p and potential upside as high as 260p. DYOR.

Sold at 200p+ and bought back at 160 and 163p.

On a PE of less than 10 and growing profits , soon be 200p+ again imo.

Good luck.

arent you a smart arse!!! now get back to summer of watching sheep dog trial whilst we watch our countries playing at the wordl cup!!

"Our countries" ... how many you got ?

We got 31 here in Wales to support ... good luck with the penalties :-)

COME ON BRAZIL !!!!

Share Placing, but more interesting is the CEO's comment on 1st Qtr trading:

'The first quarter of this year has shown strong growth compared to the same period in 2005 with revenues up by 170% and profit after tax showing an increase of 133%. As such we look forward to the future with considerable optimism.'

Nice One, growing rapidly :-)

China Shoto plc
09 June 2006


Press Release 9 June 2006


China Shoto plc

('China Shoto' or 'the Company')


Placing to raise 5.0 million


China Shoto plc (AIM:CHNS), a leading Chinese producer of industrial batteries
and power supply systems, is pleased to announce that it has conditionally
placed 3,143,750 new ordinary shares of 10 pence each in the capital of the
Company ('Ordinary Shares') at a price of 160 pence per share, raising a total
of 5.0 million (before expenses) for the Company. Application has been made to
AIM for the new shares to be admitted to trading, which is expected to commence
on 12 June 2006.


The proceeds of the placing will be used to: increase AGM battery production
capacity as well as to provide working capital for the Group; extend the current
AGM product portfolio through an investment in Zhenghe Power Supply Company;
purchase the power type battery business of Jiangsu Electric Wire and Cable Co.
Ltd; and also to increase the Company's current 51% stake in Beijing Full Three
Dimension Power Engineering Co., Ltd ('FTD').


Commenting on the Placing, Cao Guifa, Executive Chairman of China Shoto plc,
said: 'We are delighted with the response and support shown by both new and
existing investors. The funds raised will allow China Shoto to undertake the
next stage of its business strategy. The first quarter of this year has shown
strong growth compared to the same period in 2005 with revenues up by 170% and
profit after tax showing an increase of 133%. As such we look forward to the
future with considerable optimism.'


The Placing has been undertaken by Seymour Pierce Limited ('Seymour Pierce').
The new ordinary shares will rank pari passu in all respects with the existing
Ordinary Shares in issue.

Oh look, up the SP goes!

Due a major re-rating when the market catches on.

Placing explains why the share price fell over the last few weeks now onwards and upwards.

14 quid price target ;)

Looks like you did a good bit of trading there Dil.

That trading update makes pleasant reading.

all the best

capa

SP Rise now over 10% on today's RNS. The future looks (battery powered) bright!

SP Rise now over 10% on today's RNS. The future looks (battery powered) bright!

Pommy ... stick to losers like Arsenal , England .....

:-)

Good trading Dil-I'm not back in yet but hoping to soon. Are you looking at any other chinese stocks? I hold EBT EPE EPY CSB and LDC all healthy but not really taking off yet-PCM and AKO were very bad buys I'm stuck with!

Not good trading just lucky , not holding any other Chinese stocks at present.

In today at 201

Took a stake in this one yesterday (trading stake). Looks like its on a roll and with the new factory opening this month we could get good news flow. Forward P/E of only 10 and looks very cheap to me.

much better spread on this one now. Anyone checking out EPY?

Was tempted moneyplus but with recent declines all well my portfolio is looking rather stretched at the moment!

ould get news from SCSW this weekend on this one. Anyone a member?. I know the tip sheet is following this one.

Looks like it's starting the run up to the Interims.......

Interims due end of August/Start of September.

Breaking out big time.

Results must be decent.........

Getting interesting , lets see if it holds.

Sold it and moved on.... Now watch it fly

Yes, beginning to fly.

Results tomorrow should see how we are progressing.

all the best

capa

The interims are out:

http://moneyam.uk-wire.com/cgi-bin/articles/200609270700325206J.html

Highlights
Turnover up 141% to 28.4 million as a result of increased turnover in
existing business and new business lines (H1 2005: 11.8 million)
Profit after tax up 25% to 2.0 million (H1 2005: 1.6 million)
Established a new plant manufacturing batteries for electric bicycles, with
a capacity of 12,000 units per day
Stake in FTD has been increased in 2006 from 30% to 51%, with FTD making
good progress signing a new contract to supply 150MW turbine to Shangdong
Haihua Group
Successful placing completed in period raising 5 million (before expenses)
which have been or will be invested into the expansion of manufacturing
capacity
Proposed interim dividend of 1.5 pence per share payable on 3 November 2006
Average debtor days reduced from 122 to 102 days

Look pretty good.

Ian

Yes good results I reckon.

On a single figure multiple which has got to be cheap in anyones book, outlook healthy and yearly dividend likely to be circa 4p.

Typical market reaction, time to add not sell in my opinion.

capa

CHNS tipped as a BUY by TechInvest Newsletter part of the T1ps group today.

Broker Seymour Pierce forecasts sales at 63 million pounds this year and 75 million pounds in 2007. Net profit to 31 December 2006 is estmiated to be 4.5 million pounds giving earnings per share of 21.6p. Corresponding figures for 2007 are 5 million pounds and 23.5p.

At current SP of below 200p, these shares are on a lowly PER of around 8 for next year.

Silvermede,

Thanks for the tip - I agree this looks good and will give it careful consideration.

Do you not think, however, that Seymour Pierce's EPS target is fairly conservative? I agree that the prospective PE is looking low, but on Seymour's figures it's the PEG that doesn't excite much.

However, I would hope that once the results come out and the profitable run appears more consistent that the market might react accordingly and award CHNS a higher rating.

I guess it has to be a buying opportunity after the post-results sell-off. Still bothered about that PEG though.

ST, good point and wanted to have another's views. I'll have another look at the PEG.

Thanks Silvermede. IfI can be more specific (now I'm slightly more awake than Iw syesterday evening), it just seems to me that profits are forecast to grow only around 10%. Frankly I'd be expecting more.

They did about 10p eps in the first 6 months, taking into account the bullish outlook and the new plant which is working flat out I expect the next 6 months to produce significantly more than 10p eps.

Seymour Pierces estimate of 21.6p is conservative, better this way though, makes good headlines when broker estimates get smashed.

capa

Is this a time to invest in this profitable company? as the results are looking good, out end of April and Dividend to be announced. See below:

Pre-close Statement
Press Release 1 March 2007
China Shoto plc (China Shoto or the Group) Pre-close Statement The Board of China Shoto plc (AIM:CHNS), a leading Chinese producer of industrial batteries and power supply systems, is pleased to announce that the year ended 31 December 2006 was a period of excellent progress for the Group. The results, which are expected to be announced in the last week of April 2007, will be in line with market expectations. The final dividend for 2006 will be announced with the results. During 2006 the Group significantly expanded its production capacity, on time and within budget. The new manufacturing facility, which came on stream in May 2006, rapidly moved into full production. The markets within which the Group operates continue to grow. The current year has started well and the board has every confidence that the Group will continue to make sound progress in 2007. - Ends - For further information:China Shoto plc
Cao Guifa, Executive Chairman Tel: +44 (0) 20 7398 7700
www.chinashoto.com
Seymour Pierce Limited
Stuart Lane / John Depasquale Tel: +44 (0) 20 7107 8000
jdp@seymourpierce.com www.seymourpierce.com
Media enquiries:Abchurch
Henry Harrison-Topham / Laura Riascos Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com
END

I know I am a bear on CHNS (have been since 200p levels), but it really is easy to find the company telling you what the problem is.


If you go to the last prelims (period of 12 months to 31st Dec 2006) they clearly state ;

http://www.investegate.co.uk/Article.aspx?id=200704260700315229V

"Earnings and Dividends

Basic earnings per share in 2006 are 18.30 pence (2005: 19.80 pence), which was affected by the significant increase in raw material prices during the year. An interim dividend of 1.5 pence per share was paid in November 2006 (2005: nil). The Directors recommend the payment of a final dividend for 2006 of 3 pence per share (2005: nil)."

***************************************************************

If you then look at LEAD prices during 2006 its like this ;

The rise in 2006 was minor compared to the ongoing rise in 2007........which therefore, according to the companies statement on earnings in the 2006 prelims, will affect the earnings even more dramatically than it did in 2006, as the rise is larger.




Taking that into account, it probably explains why the price is falling, and looking like it wants to fill the gap back to 130p imv

Rising interest rates are going to be hurting on the debt front, the past rises in the price of lead will not be out of the system as yet, lots of competition in this business, no news at all, all quiet and a falling SP.

Will they belatedly now look at a placing and raising funds to reduce their debt burden ? and allow them to expand into different products ? In the present climate, given the problems in the past, what price would a placing be at ? Certainly the potential is there for a lot lower than today.

I suggested they would do a placing last year, they did not. Perhaps they should have done it then, and put themselves into a better positon, as with the credit crisis, China's rising interest rates to battle inflation, rising labour costs due to the new labour law, inflation and all the other China problems, its certainly not a good time to be trying to raise cash now, and not a good time to have a nasty lump of debt in China either.

Ignoring the headline noise about EPS, PEG, PER etc..........in order to get a view of whether this company is functioning well, imo, look at the following lines in the results.



2006 Full Year Figures to watch for IMO :


2006

On Current Assets

Inventories = 10,122 (should reduce)
Trade receivables = 15,009 (should reduce)
Other receivables and prepayments = 7,224 (should reduce)
Cash and cash equivalents = 9,937 (should increase)


On Liabilities

Bank borrowings = 12,236 (should reduce)


On Cash Flow

Net cash from operating activities = 1,606 (should increase (not be negative ie a figure in brackets)


*********************************************

As a comparison, looking at the 2007 interims, PERHAPS people can understand why the price has been falling - don't get ramped into EPS and that crap, look at cash, debtors, working cap requirements etc.. :


2007 INTERIM FIGURES

On Current Assets

Inventories = 17,135 (Going up)
Trade receivables = 20,819 (Going up)
Other receivables and prepayments = 8,542 (Going up)
Cash and cash equivalents = 4,331 (Down and down)

On Liabilities

Bank borrowings = 18,727 (Up and Up)


On Cash Flow

Net cash from operating activities = (10,941) (Gone Negative)

Results out - Negative Cash flow from operations and bank borrowing up !!!


Bank borrowings up to 23,284 in 2007, from 12,236 in 2006

Inventories up to 19,426 in 2007, from 10,122 in 2006

Trade and other receivables up to 31,479 in 2007 from 22,233 in 2006


Giving :


Net cash flows from operating activities to negative (3,026) in 2007, from positive 1,606 in 2006.



Cash Flow
The considerable increase in sales volume in 2007 resulted in the need for
greater working capital. Although debtor days reduced by 6 days from that of
2006, cash flow from operating activities in 2007 was still negative, at 3.03
million. The Group covered its deficit in operating cash flows by increased bank
borrowings. Interest paid was 1.46 million (2006: 822,000) and tax payments
were 976,000 (2006: 607,000).

The trouble is they really suffer with negative cash flow in the first half of every year, getting some of that money back into the system in the second half.

I would imagine that the coming interims will be pretty horrific in terms of increased borrowings, increased inventories, increased trade receivables and negative cash flow from operations - so get ready for a stinker in those terms comes interims in the Autumn imv.

If you look, the historic weighting is towards H1 for massive cash drain.

In 2006 they turned a 3m negative cash flow from operations at interims into a 1.6m positive come prelims.

In 2007 just reported they turned a 10m negative into a 3m negative at prelims just reported.


It would therefore suggest the business is growing at much faster than cash can handle........and so working cap will be hard hit in 2008........and likely result in a placing for cash for working cap imv.

They are massively in debt, and operationally now cash flow negative for the full year.

The onus is on the need for more working cap, and soon imv.

New article, click HERE

Nice news today of an Olympics contract win (see below).

My overall take on CHNS at present on a current year P/E of 4.9:

- recent outlook statements have been very bullish
- lead, which makes up 70% of CHNS' raw material cost, has plummeted in price in H1'08 to levels not seen for 18 months
- CHNS' telecoms markets are booming and expected to accelerate due to 3G
- CHNS' electric bike markets are booming
- the yuan's currency appreciation is in CHNS' favour re helping a higher EPS
- CHNS have already begun selling into solar power and wind energy markets
- they're also developing electric car batteries
- gearing is low at 40% and historic interest cover fine

The facts are in CHNS' favour at a 129.5p share price with 26.6p EPS forecast for this year. If they can continue to improve cash flow etc as per H2'07 and come through with good results again as per their track record, then CHNS should continue to thrive.

Here's the Olympics news:

http://www.chinashoto.com/news/detail.asp?ID=168&tID=&tName=

"Olympic win paves the way to green energy market
July 9

AIM-quoted China Shoto, China's largest producer of back-up lead acid batteries, has successfully initiated its planned move into the renewables sector with the delivery of 40 sets of super-capacitors for solar-energy street lighting in the Beijing Olympic Village.

The company, which is already established as a leading supplier of power batteries and back-up batteries to China's booming telecoms market, believes completion of the Olympic contract will pave the way to future sales into the green energy economy.

The super-capacitors were manufactured by China Shoto's subsidiary, Nanjing Shuangdeng Sci &Tech Academy in Jiangsu Province, following a tendering process involving two other Chinese competitors. The capacitors have now been installed ahead of next month's Olympic Games to power the Olympic Village solar street lamps.

China Shoto's Executive Chairman Cao Guifa said: "Our success in this bid follows development work to produce capacitors that combined low current output with high storage capacity. We are pleased both to be contributing to the environmental objectives of the 2008 Olympics and to have developed a product we believe opens new markets for China Shoto."

China is already responsible for a third of the world's solar cell production, and by 2010, hopes to be generating and consuming about 300 megawatts of solar energy, which would position it among the world leaders in the field.

Last May, China Shoto reported a 2007 pre-tax profits increase of 58.7% to 7.15m on sales up 81%, to 107.5 million. It said it planned a steady advance into renewable energy industries to become a provider of environmentally-friendly energy systems."

Sounds a bit "hairy fairy" to me. If their core business was so strong - like they said in the past, then why mess about with this green nonsense, which will obviously cost them money as opposed to make money ?

The thing to watch for CHNS is if, come interims, their debt levels rise YET AGAIN, and also see if they are YET AGAIN, net cash flow NEGATIVE from operations.

Those are key indicators...........

Interesting and reassuring bearish views on the trend in the price of lead from Goldman Sachs, especially given the recent collapse in price. They say the next two years will see a continued downtrend, but that even after that when the price recovers, the highest point in 2012 would still only be just over where the price is now!

Has to be good news for CHNS - stability and relatively low prices comprising 70% of their input costs over the next 5 years will help them enormously:

http://www.livenews.com.au/Articles/2008/07/07/Commodities_Lead_Slumps_As_Oil_Rises

"Three month lead closed $US42 lower, or 2.6% at $US1,568 a tonne Friday in London. The metal has lost 39% so far this year, making it the biggest loser on the LME.

Goldman Sachs JBWere issued a bearish report midweek on lead, arguing that supply will outpace demand by 130,000 tonnes this year.

That's an estimated 29% more than all the lead held in warehouses monitored by the LME.

Lead stocks have more than doubled this year, to 100,675 tonnes.

Goldman Sachs said: "In the short-term (2008 and 2009), we see the global market remaining in surplus and, based on our expectations of mounting inventories and on our understanding of current industry costs, we expect further downside for prices over the next two years. We have made a reality downgrade for our 2008 lead price assumption based on recent/current trading levels; our 2009 forecast is unchanged.

"But in 2010 we envisage the market moving back to balance, and then into significant deficit in 2011 and 2012. We have therefore raised our price forecasts for the final two years of our forecast period as follows (previous estimates in brackets): - 2008: 99c/lb (105c/lb)- 2009: 70c/lb (unchanged)- 2010: 50c/lb (unchanged)- 2011: 70c/lb (45c/lb)- 2012: 90c/lb (45c/lb)"

I thought they were now fully hedged on lead, and it does not matter up or down it makes no difference with the hedge they have.............


?

CHNS said the following - very different from a "hedge" on the price of lead:

"alleviated pressure arising from the increase in the raw material price by passing it on to the customer, by agreement."

Nice bit of buying this afternoon from nowhere.

Last year's interims were on 18th September. Since CHNS issued a bullish AGM statement on 22nd May (only a month before the period end) we can be pretty confident that the H1 results should be pleasing.

Its the normal "hype" imv, they post an update bullish on a couple of things.

Then they will likely smash investors with bad news on rising debts and being net cash flow negative from operations at interims.

Then BB's will be full of people who go ramped into the hype of "revenue and paper profit"........asking why the SP is tumbling down as those in the know bail out after seeing frightening things on the balance sheet.

This is perhaps more likely ? is it not ?

All IMO, DYOR !!

.

pp take your own advice and stop ramping shares like AST and LEAD!

Would be a bad thing for many many companies in China, ramping up costs, ramping up wage increase demands etc...


http://in.reuters.com/article/asiaCompanyAndMarkets/idINPEK34395420080723

China parliament warns on inflation, export slowdown

Wed Jul 23, 2008 10:24am

BEIJING, July 23 (Reuters) - China's inflation is in danger of worsening and the government should liberalise pricing of oil and power to reduce the risks, the country's parliament said in a report published on Wednesday.

China should adjust policies for exports of textiles and toys, to avoid any slump in the export sector, according to the report by the financial committee of National People's Congress, which was published on the Xinhua news agency website.

"The national economy is moving from the stage of 'high growth and low inflation' to a state of 'high growth and high inflation' or even 'low growth, high inflation'," the report said.

The report was written at least a week ago, since it only included economic figures of the first five months instead of the first-half figures that were released on Thursday.

The report did not specify a timeframe for the proposed policy changes, but it noted the Chinese government's current policy of keeping some prices deliberately low through price caps would only worsen inflation in the long-term.

"It is just ineffective to control inflation through price controls," it said.

The report cited Venezuela as an example to support its view: "Venezuela, an oil producing country, has kept its oil prices artificially low, but the country's inflation was still 20 percent."

Liberalising oil and electricity pricing, on the contrary, can be helpful to curb inflation because it eases demand, even though such measures can push up short-term inflation.

On the export sector, the report said China's policies aimed at curbing exports of polluting products and balancing trade were badly timed because they coincided with the economic slowdown in the United States and the EU
"We suggest to pause the launch of any new policies targeted at the processing trade to maintain stable policies and to give exporters breathing time in order to avoid big impacts on the export sector," it said.

It added that a tight monetary policy and prudent fiscal policy should be maintained, but advocated "flexibility" when carrying out the policies. (Reporting by Zhou Xin; Editing by Ken Wills)

Nice to see the price up for a fourth successive day. On tiny volumes admittedly today, but then again that's perhaps a sign of a lack of stock around, which might result in interesting action with further good news.

Perhaps an overview of the company is useful.....

- recent outlook statements have been very bullish
- lead, which makes up 70% of CHNS' raw material cost, has plummeted in price
- CHNS' tangible NAV at 28m is 4m more than their m/cap!
- CHNS' telecoms markets are booming and expected to accelerate due to 3G
- CHNS' electric bike markets are booming
- the yuan's currency appreciation is in CHNS' favour re helping a higher EPS
- CHNS have already begun selling into solar power and wind energy markets
- CHNS have just won a solar energy contract for the Olympic Village
- they're also developing electric car batteries
- gearing is low and historic interest cover fine

The facts are in CHNS' favour on a P/E of only 4.6. CHNS are a fast-growing company in a slow-paying payment culture, so working capital and cash flow may continue to be poor, but with low gearing, undrawn facilities and input prices plummeting CHNS should be able to continue to thrive given all of the above.

If they can continue to address cash flow etc following the 7.9m operating cash inflow in the last H2, and come through with the usual good results as per their track record, then CHNS should have a full deck of positive cards to play with.

Its coming up to results, its also late summer, this is when the normal pump and dump crew start to buy stocks (they buy now ready to sell into any results spikes in late August through end September). Therefore, expect to see "old faces" start to return to threads as they start to pick up their little holding now, ahead of trying to ramp the bottom off of it into results time. This happens all over AIM, especially on the stocks where a good ramp could be got going (say China stocks - low PE's - thats a great ramp to attempt).

So, as summer draws to a close watch trading volumes on AIM tiddlers, expect some buying to be going on, and then the threads start to get busier, old names re-appear as do new names start to appear.

All telling you how cheap this stock is and what a bargain.

But do not forget, these are in the most just trying to ramp the price up and will disappear before or just after results are out in the Autumn

Its time for Rampton........unlimited attempted ramping to create as many AIM spikes as possible into results season - that they can sell into whilst posting on BB's how wonderful the results will be/have been

My opinion if anyone wants it, LOL :)

If anyone is thinking of buying AIM stocks ahead of results, do it now, do it until end July, then stop.

Don't be the ones caught buying the results spike and holding the baby as the SP crashes after results - beat the rampers at their own game, and be the ones selling on the spike ahead of them getting out for their small gains.

Price spikes might be subdued this year, owing to a risk of bad economic news making markets tumble, so the buying should be lower and less risk taken - they do not want to be caught with their pants down if the tide goes out.

More Olympics contract news, from Jiangsu Shuangdeng (the CHNS subsidiary):

http://translate.google.com/translate?u=http%3A%2F%2Fwww.shuangdeng.com.cn%2Fnews%2Fnews.asp&langpair=zh%7Cen&hl=en&ie=UTF8

It seems to me per this article that CHNS have won an awful lot of business at the Beijing Olympics, under three categories as follows:

- "green products used in the Olympic Village supercapacitor solar street lighting projects"

- China Mobile's GSM network build in the Everest region

- providing green energy and batteries "for the Olympic Games, the nest, water cubic meters, Olympic figure buildings, Wukesong Sports Centre, Fengtai Softball Hall, the Olympic Village underground garage, T3D Capital Airport Terminal Building, Beijing's new South Station, the Capital Gymnasium, and other venues"

CHNS still trade at well under their 28m tangible NAV!

Another reason I like this company is that all of its sectors are largely free of worries about the world economy as a whole etc:

- 3G telecoms expansion is government and industry-driven
- electric bike sales are accelerated by cost and green factors
- railways expansion is government-driven
- solar and wind power are government-driven and have "green" momentum
- nuclear power is becoming a must-have option

Thus growth in forward sales is visible and recurring.

CHNS are the market leader in China, yet trade on a P/E of only 5 and a laughable PSR of 0.2 or so, the only caveat being that gearing (at only 40%) and interest cover remain low/high respectively and thus manageable given the slow Chinese payment culture and the fast growth.

But its very likely that they will turn in at interims a performance that is "net cash generated negative from operations".

Thats a key thing..........keep an eye for that.

The Yuan is up to almost 12.8 against the pound! Last year's average was around 15 from memory, so this year's EPS will effectively gain around 10%-15% on last year's in currency terms alone averaged out I'd have thought.

If CHNS merely meet the 26.6p EPS forecast, hopefully currency effects alone
will push the EPS up to say 29p-30p EPS this year.

In addition, lead prices (which make up 70% of CHNS' input costs) are diving again:

http://business.timesonline.co.uk/tol/business/economics/article4517485.ece

"lead prices slipped to their lowest for five weeks.

Prices for lead staged some of the biggest falls. The cost of lead for delivery in three months plunged by 9.6 per cent to $1,740 (916) a tonne, its lowest since July 9.

From the FT - just look at the huge amounts to be spent by CHNS' main customers (Unicom, China Mobile etc) on telecoms/3G infrastructure. These are surely guaranteed increased revenue streams for CHNS in this and future years imho:

http://www.ft.com/cms/s/0/dcad6aaa-6959-11dd-91bd-0000779fd18c.html

"Unicom lays foundations for 3G services
By Justine Lau in Hong Kong

Published: August 13 2008 18:16 | Last updated: August 13 2008 18:16

China Unicom plans to spend up to Rmb100bn ($14.5bn) in the next two years to improve its network as the countrys second-largest wireless operator prepares to introduce third-generation services.

And further news from today's FT about China Southern Railways raising loads of money in a successful IPO. As with the telecoms sector, the huge amounts to be spent modernising China's railways are (again) guaranteed irrespective of any market ups or downs and should be good news for CHNS.

Just look at the amounts involved - $180 billion!!

http://www.ft.com/cms/s/0/1eb1d550-6c8c-11dd-96dc-0000779fd18c,dwp_uuid=9c33700c-4c86-11da-89df-0000779e2340.html

"Chinas present five-year plan allocates Rmb1,250bn ($180bn) of capital expenditure to railways quadruple the amount in the previous period and so far just 27 per cent of the money was spent in 2006 and 2007, according to Julius Baer, the wealth managers."

Wonder how the rampers who were pumping this from over 200p and still are trying to pump it feel.........LOL :)

In case anyone wondered I have been enjoying a superb holiday and have been away from the net a lot, apart from the occasional post on III.

I refuse now to post on A DVFN, its has got terrible in terms of abusive rampers this year, totally pathetic and not worth anything now. The good thing is of course they are all now losing money, and I really hope some of those abusive idiots lose everything in the ongoing crash.

Some of us did warn back in January that it was best to sell anything and everything, and we were ridiculed by the abusive rampers, and now it comes to pass...........LOL :)

With what is going on, you can be sure that Asia will be into severe problems come 2nd half 2009, going into 2010.............not a time to be loaded up with "China" exposure stocks..........now people can see why everyone has been selling these "bargains" and not buying them.

The ultimate sign was China dropping interest rates, in the face of inflation, that was a real admission that they are now heading into severe problems :) ho ho ho.

Couple of posts from the SC site.


Richard Gill Reged: 28/06/07
Posts: 495
Re: China Shoto [Re: JamesFaulkner]
#429812 - 18/09/08 08:00 AM

Fuuny how they dont mention the negative cashflow being the house broker and all


PapalPower Reged: 17/10/04
Posts: 4889
Re: China Shoto [Re: Richard Gill]
#432230 - 14/10/08 12:08 AM

Warnings were given that this company seems set on increasing debt and being operating cash flow negative.

In this climate, to go about a process of gaining revenue by offering "deffered payment", in effect ramping up your working cap to get revenues, its in my opinion very stupid.

Revenue is vanity, real profits and generating cash is sanity.

This company increases revenues and paper profits, and then bumps up debt and working cap all the time to go with it.

Not a well run business at all imo, and one that could collapse when the China slowdown and banking crisis bites.

GNG warned today already of a slowdown hitting H2 figures, imagine what these Chinese companies are going to be saying when it comes to reporting 2009 H1 and H2.

The outlook on China is now darkening fast.

On top of the GNG admission that things are slowing down, today also saw ZTC (Chinese telecoms) say this which again is more evidence to say that things in China are under pressure, and those who said 2009 would be a bad year for anything China related, might well be proven correct :

"As has been widely reported, trading and credit conditions for SME's in the PRC have become increasingly difficult throughout the third quarter of 2008. This is due to deteriorating macro economic conditions outside the PRC and slowing economic growth and restrictive credit policies in China. As a consequence, our markets have become increasingly competitive, disruptive and oversupplied. ZTC has therefore achieved sales significantly below those seen in the same period last year.

As a consequence, the Company's working capital available to operate and expand its business has become constrained, as has been previously announced. The Company continues to review all aspects of its operations to reduce costs and improve efficiencies to improve the availability of working capital for new model and market development. The possible sale of assets referred to above is one example of a potential method of cash generation that is being actively considered."

CHNS could achieve 35p-40p EPS this year against a 96p share price imho given current exchange rates.

And at a 19.5m m/cap it trades at below tangible net asset value!

The yuan is now at 10.6 against the pound...certainly the broker forecast of 33p EPS looks comfortable imo given the relatively secure nature of CHNS' customers and markets.

The lead price, which comprises 70% of CHNS' input costs, continues to plummet and is down to $0.525, the lowest for over 2 years.

Intriguingly I've come across what appears to be a new CHNS web site. The emphasis on CHNS being "a green energy solution provider" is particularly interesting given the involvement in electric bikes and cars, wind power, solar power etc:

http://chinashoto.net/index.asp

In addition, the Chinese 3G spending spree is starting - note carefully the last sentence about 23,000 (!) base stations being purchased. These will all require batteries, and we all know that CHNS is China Mobile's main supplier (and Unicom's too) and the market leader...

http://www.tradingmarkets.com/.site/news/Stock%20News/1971675

"SHENZHEN, Oct 27, 2008 (SinoCast via COMTEX) -- ERICY | Quote | Chart | News

China Mobile, the largest telecom carrier in this country, is scheduled to make public on October 30 the bidding result for the second stage project of the TD-SCDMA network construction....

China Mobile started to invite public bidding for the second stage project of its TD-SCDMA network on September 11. It was about to procure 23,000 wireless base stations."

And fortunately:

- CHNS' sales are mostly infrastructure-based, and it's that very sector which is being and will be expanded by the Chinese government over coming years via:

- 3g telecoms roll-out happening now
- railways expansion happening now
- nuclear expansion
- wind, solar, electric car, renewable power expansion

All of which are markets addressed by CHNS' products.

Plus electric bike markets are booming worldwide due to the high price of oil and the increased efficiency of electric bikes.

On a P/E of only 2, trading at below tangible NAV and with reasonable gearing at 55% - note that interest rates are coming down fast - any downturn should be priced in here and then some.

Massive debts.

Increasing debts.

Unable to be net cash flow positive from operations in H1.


Looks like an avoid to me.....mind you, while you were saying buy at over 200p, some of use were saying sell. I think those that said sell due to debts and poor cash generation were correct.............

Moving up today.

More CHNS news this week - trade fair coverage.

Note in particular the emphasis on lithium-ion batteries and the readiness for electric cars as well as the existing electric bike business.

Also that "sustained growth has been in Europe, North America, Southeast Asia and other regions", with the setting up of sales offices:

http://translate.google.com/translate?u=http%3A%2F%2Fwww.shuangdeng.com.cn%2Fnews%2Fnews.asp&langpair=zh%7Cen&hl=en&ie=UTF8

CHNS is on a P/E of 2, yet has imho huge guaranteed current and future sales pipelines from Chinese 3G expansion, railways expansion, nuclear industry expansion, wind and solar power expansion, electric bike and car expansion - i.e all infrastructure or green sectors which will only continue to grow.

Plus a huge proportion of its costs have plummeted in price with the lead price decline.

Plus exchange rate movements will only increase CHNS' EPS this and next year.

And interest cover and gearing at only 55% are perfectly reasonable and should improve again as they did in H2 last year.

Enough said :o))

PER looks ridiculous - punishment for cash flow?
CHNS is now all about Telco backup as opposed to bicycle batts.
I agree lead price decline should help
Used to well covered by Investors Champion, www.investorschampion.com but I haven't looked lately

Here's CHNS' recent trading update - they will beat expectations of 31.6p EPS. I'm hoping for at least 35p-37p EPS for 2008.

At 102p that's a historic P/E of just 2.9. And there's a 5p divi too - it's possible that with the yuan's rise against the pound we may even get 6p.

So in summary then:

- a P/E of 2.9 or less
- a m/cap at 2/3 of net tangible asset value
- a 5% divi yield
- laughably good PSR with 130m of sales against a 23m m/cap
- excellent and fast-improving interest cover and reasonable gearing
- and outstanding future prospects given the telco spending explosion in China, India, Pakistan, Costa Rica etc

http://www.investegate.co.uk/Article.aspx?id=20081210070019M8903

"Pre-Close Trading Update

China Shoto is pleased to announce that the strong progress previously reported for the six months ended 30 June 2008 has continued into the second half of the financial year. As a result of the continued strengthening of both domestic and international sales, the Board is confident that the results for the current year will be ahead of market expectations.

In the domestic telecoms sector, demand for the company's back-up batteries remains a key driver of the business. China Shoto has cemented its position as a market leader by remaining the largest back-up battery supplier to China Mobile, and has also successfully increased its sales to a number of other leading domestic operators.

Over the financial year China Shoto has also continued to expand into overseas markets, most notably and successfully in India where contracts with a value of US$54.92 million had been signed by the end of September 2008. While domestic sales continued to increase during the nine months ended 30
September 2008, international sales rose faster, accounting for approximately 15% of the Company's total revenues for the period, up from 6% during the 2007 financial year.

The Company has benefitted to some extent from the financial stimuli given to the Chinese economy by the Government in response to the global financial crisis. Following substantial interest rate cuts, and with falling prices of raw materials, the Company aims to take advantage of the easing of financial conditions whilst continuing vigorously to pursue its business opportunities despite
competitive product price pressures.

The Board is pleased to be able to report this positive progress, and is looking forward to developing the business further in 2009."

Massive debts.

Increasing debts.

Unable to be net cash flow positive from operations in H1.


Looks like an avoid to me.....mind you, while you were saying buy at over 200p, some of use were saying sell. I think those that said sell due to debts and poor cash generation were correct.............

Nope. As I said above, gearing is only just above 50%. PapalPower/Prosolenes' definition of "massive" is coloured by his rabid anti-Chinese agenda which he spouts on a dozen diferent bulletin boards day and night :o))

In addition to:

- a P/E of 2.9 or less
- a m/cap at 2/3 of net tangible asset value
- a 5% divi yield
- laughably good PSR with 130m of sales against a 23m m/cap
- excellent and fast-improving interest cover and reasonable gearing
- and outstanding future prospects given the telco spending explosion in China, India, Pakistan, Costa Rica etc

with today's news about Nortel going into Chapter 11 and shrinking rapidly, there's a big opportunity for Huawei and ZTE to gain market share.

CHNS of course supplies both Huawei and ZTE. Here's Huawei winning base station orders from TeliaSonera:

http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSPEK9015220090115

"BEIJING, Jan 15 (Reuters) - Huawei Technologies [HWT.UL], China's largest telecoms equipment maker, said on Thursday it will supply Teliasonera's (TLSN.ST) fourth-generation (4G) network, but did not give any financial details.

Huawei Technologies Co Ltd will supply long-term evolution (LTE) base stations, core network and operating support system to Nordic telecom company Teliasonera, in a deal that could be the Chinese company's first contract for 4G equipment.

Ericsson (ERICb.ST), the world's biggest telecom network maker, said earlier in the day that it would build a commercial 4G network for TeliaSonera.

Huawei and smaller rival ZTE (0763.HK) have been expanding rapidly, taking market share with aggressive pricing from global giants such as Nokia (NOK1V.HE) and Nortel Networks (NT.N) (NT.TO), which filed for bankruptcy on Wednesday."

Debts Debts Debts, and the inability to be cash generative (ON A FULL YEAR BASIS, AS SOME PEOPLE LIKE TO SPOUT ABOUT ONE HALF, AND IGNORE FULL YEAR 12 MONTHS).

The Yuan getting stronger and stronger is going to keep impacting on their margins and ability to export. They may have made progress in 2008, but for 2009 orders they should suffer badly due to Yuan strength.

And given you were ignoring their mobile phone base station battery business and RAMPING their "electric bicycle one" - now the Chinese economy is crashing and people no longer buying the bikes, suddenly bikes is forgotten and its all about base station batteries.

LOL :) Slipping and sliding.

You were ramping this at over 200p on many boards and its crashed, on poor cash generation and the debts.


Why should anyone put their money into this ? Far too many better companies out there to put money into, and with far less risk attached.

To reiterate the facts, CHNS are on:

- a P/E of 2.9 or less
- a m/cap at 2/3 of net tangible asset value
- a 5% divi yield
- laughably good PSR with 130m of sales against a 23m m/cap
- excellent and fast-improving interest cover and reasonable gearing
- and outstanding future prospects given the telco spending explosion in China, India, Pakistan, Costa Rica etc.

We know that CHNS' cash flow is subject to seasonality, so last year's H2 should follow previous years' with a positive trend. More to the point, there are good reasons why CHNS' cash flow should remain good and be subject to some improvement assuming working capital is controlled:

- CHNS should be benefiting positively from a time lag effect in that they're probably now receiving cash proceeds from sales made when lead prices were high, whilst they're only having to pay lead prices which are at a 2-3 year low, at around 1/3 of previous highs
- Chinese interest rates have fallen sharply, which will obviously benefit cash flows, and energy costs will also have decreased rapidly

I'd like CHNS to report their net debt movements in the period in yuan to get a true picture, since it's obvious that stated in pounds the net picture will be distorted by the yuan's rise.

Since lead costs comprise around 70% of input costs there should be a highly beneficial impact on CHNS' cash flows and costs from the recent dramatic fall in the lead price.

There are just far too many "better" companies to put your money into IMO, than one like this with lots of Debt and an inability to be cash flow positive from operations on a full year basis.

There are also so many other companies in China making batteries, and competition is tough - people try to hype that CHNS is perhaps the only company - this is totally untrue, and many companies get the "stamp of approval" and "official supplier" to the big companies. They all have to undergo the qualification process to become "approved"

The Yuan getting stronger and stronger is going to keep impacting on their margins and ability to export. They may have made progress in 2008, but for 2009 orders they should suffer badly due to Yuan strength.

And given some were ignoring their mobile phone base station battery business and RAMPING their "electric bicycle one" - now the Chinese economy is crashing and people no longer buying the bikes, suddenly bikes is forgotten and its all about base station batteries.

Seymour Pierce brought out a rather positive note last week as follows...and it doesn't even mention the 5p+ dividend on a 102p share price.

Or that CHNS trade at only two-thirds of their tangible net asset value. Or that CHNS is the market leader in China and aiming for Asia as a whole. or that Indian, Pakistani etc telco growth should keep CHNS heavily occupied for ther next few years (let alone the electric bike market which is booming in Asia and starting to take off worldwide).

And gearing is low at just over 50%, whilst interest costs will be falling dramatically with recent rate cuts, thus benefiting profits further.

CHNS are forecast to make 8.8m pre-tax profit against a 23m m/cap!

http://www.smallcapnews.co.uk/article/Strong_telecoms_orders_underpin_profits_forecasts_for_China_Shoto/6529.aspx

"Strong telecoms orders underpin profits forecasts for China Shoto
Thursday, January 22, 2009

China Shoto, Chinas largest producer of back-up lead acid batteries, is rated a buy following the announcement of new investment plans by Chinas top mobile telecoms operators last weekend.

China Shoto supplies the countrys booming mobile telecoms industry with batteries for transmission masts. In a new note, house-broker Seymour Pierce says it believes the company has outperformed the market by 12.6% over the past 12 months, but is trading on a historic PE multiple of just 3.2.

The note adds that Chinas top mobile telecoms companies which are all China Shoto customers - are investing heavily in building 3G telecoms infrastructure.

Against this background, we are confident that the company will meet our forecasts for December 2008 and December 2009, the note says.

Pre-tax profits for 2008 are forecast at 8 million, rising to 8.8 million for 2009."

Year on year figures........have they managed to pay down debt ?

Have they managed to generate cash from operations ?

If not then a massive question mark over them.

Also, with the Yuan being so strong, their exports sales must be hurting in 2009........in terms of margins and profits.

Is it going to be more sales and revenues.............pumping the headlines, but not generation any cash in half 1 2009 yet again ?

CHNS are on:

- a P/E of 2.9 or less
- a m/cap at 2/3 of net tangible asset value
- a 5% divi yield
- laughably good PSR with 130m of sales against a 23m m/cap
- excellent and fast-improving interest cover and reasonable gearing at 53%
- and outstanding future prospects given the telco spending explosion in China, India, Pakistan, Costa Rica etc.

And of course the price of lead has fallen dramatically recently - lead comprises 70% of CHNS' input costs. This, plus the falls in energy costs and reductions in interest rates, should ensure that CHNS' cash flow continues to improve imo.

India's telco spending boom is even larger than China's, and due to CHNS' new partnership with Reliance Comms of India the company should continue to increase international sales in both India and Pakistan.

CHNS stated only last month that international sales (mainly to India) had increased from 7m in the whole of 2007 to around 35m in just the first 9 months of 2008! And this despite the strong yuan....

Here's proof this month of India's appetite for telco spending:

http://midastouch-mumbai.blogspot.com/2009/01/stock-ideas-nu-tek-india-ltd.html

"India has emerged as the largest growing telecom market in the world. Number of subscribers is expected to reach 500 million by 2010 and 650 million by 2012. Telecom regulator TRAI studies estimate the requirement of telecom towers to increase to 3,30,000 by 2010. Government too has aggressive targets. It plans to provide 200 million rural connections by 2012 (i.e rural teledensity to reach 25 percent from 8.35 percent in Dec'07). Besides targets for broadband services, 3G services and mobile TV etc indicate towards the massive telecom infrastructure that would be required."

More important questions................


Year on year figures........have they managed to pay down debt ? If business is good and margins wonderful and customer great, would think they could get out of this cycle of being unable to be cash generative from operations on a full year basis (always having a bad H1 a good H2 but overall for the year being not being able to generate cash from operations).

Constantly rising debt levels and not generating cash..........say no more.

Also, with the Yuan being so strong, their exports sales must be hurting in 2009........in terms of margins and profits, the effects of the strong Yuan will only be seen come later 2009 - in the first instance the strength will help obviously US$ translations of RMB sales, but after time it will severely hamper actual export sales, not just values of them.

Is it going to be more sales and revenues.............pumping the headlines, but not generatig any cash in half 1 2009 yet again ?

Brokers were saying "buy" at over 200p levels some time back, people have been ramping this like mad on ADFN.

The price action says it all.

Rising debts. Not generating cash on a full year basis.

And look at the dividend trend too given a 102p share price:

2006 - 3p per share
2007 - 4.5p per share
2008 - 5p per share
2009 - 6p perhaps?

With gearing at a reasonable 53%, excellent and improving interest cover, and the cash flow positives at present going CHNS' way in terms of:

- raw material prices falling precipitously
- interest rate cuts
- falling energy costs

there should be more than enough leeway imo for CHNS to continue to gain market share and new business whilst smaller competitors fall by the wayside, despite the slow Chinese payment culture.

The facts:

- a P/E of 2.9 or less
- a m/cap at 2/3 of net tangible asset value
- a 5% divi yield
- laughably good PSR with 130m of sales against a 23m m/cap
- excellent and fast-improving interest cover and reasonable gearing at 53%
- and outstanding future prospects given the telco spending explosion in China, India, Pakistan, Costa Rica etc.

We do have to look at the facts.

Loads of ADFN rampers locked into this from over 200p levels.

Its an illiquid stock, meaning you cannot buy any large amount without paying for a massive spread, and its difficult to sell as no MM wants sells, so you will struggle to sell any larger size holding for a decent price.

They are not cash generative from operations on a full year basis (they might struggle and just about do it in 2008, and maybe not)

They have just had a "Chinese Olympics" year, so their 2008 figures should be good in terms of sales, but 2009............ ???? as it goes on it should get worse.

Debts.......always going upwards........why is that ?? LOL :)

Strong Yuan, bound to hurt 2009 sales although will have provided a temporary boost to 2008 figures before the pain comes in later.

Paying a dividend whilst pushing up debt levels.......is that good business sense ?

Electric bike sales ??? Going to be going down now with China in recession (notice how the rampers were ramping this last year and not talking phones, and now they talk phones and not electric bicycles..........)

Certain broker was saying buy at well over 200p, and now its 50% of that.

All in all, its just an illiquid AIM "nasty" in most peoples views, one you cannot sell for a good price if you buy, so why bother, plenty of better trades about. Look at LLOY, up over 50% in a few days.

The Olympics year was actually a hindrance since much of China shut down for most of the summer.

Not only that, but last year saw the huge natural disasters of Sichuan, nationwide flooding, huge snowfalls etc....and despite all these factors, affecting almost half of 2008 in total, CHNS have indicated they'll beat expectations.

So 2009 should be decent by comparison.

And then of course we know that the Chinese and Indian telecoms infrastructure booms are only just beginning...

If China does go into recession, then it'll likely be electric bike sales that boom as people choose them over cars for reasons of cost, or if they downgrade from cars since they can't afford to run cars any more.

On a P/E of around 2.9 or less there shouldn't be much if any downside here imo, especially given the bullish outlook. But the upside could be huge. Or perhaps people prefer to be locked into Britain's bankrupt banks....

The momentum is building - China Mobile, Unicom and China Telecom are all CHNS clients:

http://www.intomobile.com/2009/01/26/china-plans-to-invest-more-than-585-billion-on-3g-over-next-3-years.html

"Three Chinese mobile operators China Mobile (NYSE: CHL), China Unicom and China Telecom plan to invest 400 billion yuan ($58.5 billion) over the next three years to build 3G networks.

Of that amount, China Mobile alone will spend 58.8 billion yuan to build about 60,000 TD-SCDMA base stations by the end of this year, when its coverage will serve more than 70% of all Chinese cities. Two smaller rivals, China Unicom and China Telecom, will each spend about 30 billion yuan in 2009 to develop their WCDMA and CDMA 2000 based networks, respectively.

As a result of adopting WCDMA and CDMA 2000 technologies that are widely used around the world and because of the sheer size of China Mobiles user base, China Unicom and China Telecom are expected to grow faster than China Mobile in terms of new users and sales. Still, China Mobiles network will be the best over the next 2-3 years, according to ratings agency Fitch Ratings."

Nonsense...........2008 was a massive year for CHNS with all the batteries for the Chinese systems installed before the Olympics.

Expectations should be a big jump in turnover/revenues............for 2008 but another problem year in generating substantial cash from operations.

Higher debts perhaps, and then a poor outlook for 2009 2nd half and the effects of the strong Chinese Yuan hurting exports.

Looks like an avoid IMO........far better stocks out there IMV.

What a joy to read such balanced, flowery opinions from a non-holder like Prosolenes/PapalPower - and on such a regular basis too :o))

To take such an interest in a stock he has no interest in...it's just too altruistic for words!

Right, my little experiment here is over. Time to love you and leave you until there's more news of interest, in particular a likely trading update in a month or so.

In the meantime, here's a reminder of the December update which should mean 35p+ EPS for 2008...so:

CHNS are on:

- a P/E of 2.9 or less
- a m/cap at 2/3 of net tangible asset value
- a 5% divi yield
- laughably good PSR with 130m of sales against a 23m m/cap
- excellent and fast-improving interest cover and reasonable gearing at 53%
- and outstanding future prospects given the telco spending explosion in China, India, Pakistan, Costa Rica etc.

http://www.investegate.co.uk/Article.aspx?id=20081210070019M8903

"Pre-Close Trading Update

China Shoto is pleased to announce that the strong progress previously reported for the six months ended 30 June 2008 has continued into the second half of the financial year. As a result of the continued strengthening of both domestic and international sales, the Board is confident that the results for the current year will be ahead of market expectations.

In the domestic telecoms sector, demand for the company's back-up batteries remains a key driver of the business. China Shoto has cemented its position as a market leader by remaining the largest back-up battery supplier to China Mobile, and has also successfully increased its sales to a number of other leading domestic operators.

Over the financial year China Shoto has also continued to expand into overseas markets, most notably and successfully in India where contracts with a value of US$54.92 million had been signed by the end of September 2008. While domestic sales continued to increase during the nine months ended 30
September 2008, international sales rose faster, accounting for approximately 15% of the Company's total revenues for the period, up from 6% during the 2007 financial year.

The Company has benefitted to some extent from the financial stimuli given to the Chinese economy by the Government in response to the global financial crisis. Following substantial interest rate cuts, and with falling prices of raw materials, the Company aims to take advantage of the easing of financial conditions whilst continuing vigorously to pursue its business opportunities despite
competitive product price pressures.

The Board is pleased to be able to report this positive progress, and is looking forward to developing the business further in 2009."

One can only reiterate :

2008 was a massive year for CHNS with all the batteries for the Chinese systems installed before the Olympics.

Expectations should be a big jump in turnover/revenues............for 2008 but another problem year in generating substantial cash from operations.

Higher debts perhaps, and then a poor outlook for 2009 2nd half and the effects of the strong Chinese Yuan hurting exports.

REVENUE IS VANITY - CASH PROFITS IS THE SANITY !!

Will CHNS have lots of revenues and paper earnings, but not be generating real cash again ?

Looks like an avoid IMO........far better stocks out there IMV.

RNS out today which confirms that CHNS will smash expectations and achieve at least 8.55m profit after tax for 2008 (2007 was 5.7m)....that's 36.9p EPS.

The current share price is 106p, giving a historic P/E of 2.9 and a 25m m/cap.

The share price could triple to 300p and the historic P/E would still be only 8.

I'd expect at least 40p EPS this year given:

- CHNS' order book
- favourable currency movements
- raw material and energy cost reductions comprising the vast majority of CHNS' costs
- the telco spending boom in China and India, CHNS' two main markets
- fast-reducing interest rates on CHNS' reasonable gearing of around 53%

The PSR is outstanding, with 130m forecast historic sales for 2008 against that 25m m/cap.

There's also a forecast 5p divi.

Lots more info about what CHNS do and their prospects here:

http://boards.fool.co.uk/Message.asp?mid=11354913&sort=w...

Here's today's RNS:

"Trading Update

China Shoto is pleased to announce that the results for the year ended 31 December 2008 are expected to be ahead of market expectations. The Directors expect that net profit for the year ended 31 December 2008 will increase over 50% compared with that of 2007. The Company has a sound order book and the Directors anticipate a satisfactory result for the current financial year."

Is this the same CHNS that is always increasing their debt and working cap levels ?

Is this the same CHNS that is now setting a standard for being cash flow negative from operations ?

Is this the same CHNS that will likely have to endure lower margins due to RMB strength in 2009 ?



The simple fact is, they keep pumping up their debt/working cap needs, and are cash flow negative from operations - and thats why the rating is where it is.



Revenues and paper profits are vanity, in this market cash profits is sanity.........and thats something that CHNS do not seen to be able to grasp.....it appears ??

I understand Seymour Pierce have today increased their forecasts to 41p EPS for 2008 (from 31.6p EPS), against the current 106p share price.

Even better than my expectations :o))

And 2009 increases to 43.5p EPS.

They still go for a 5p divi. And I would assume the above forecasts to be appropriately cautious given natural broker sensitivity in these times. One could hope

At 117p the historic P/E is just 2.85 with 41p EPS. The current year P/E is 2.7...

A 100% increase from here to 234p would still mean a current year P/E of only 5.4 to put things in perspective.

Since most of CHNS' turnover is in China the yuan's appreciation doesn't matter. Its exports to India have exploded over the last year as parners like Reliance Comms gear up for the billions of pounds to be spent setting up networks there - this despite the yuan's appreciation against the rupee during that period (though this is not anything like as much as against the pound).

Neither of the two recent trading updates have even bothered mentioning gearing, cash flow etc. If there were a problem in this respect CHNS would be obliged to say so under the listing rules. They have not. This is presumably because it is not an issue.

CHNS' cash flow has not been good due to the slow Chinese payment culture, but that is symptomatic of a fast-growing company. Its gearing is fine at 53% and its interest cover is excellent and fast-improving since interest rates have reduced by so much recently.

In particular CHNS have an H2 positive cash seasonality which should come through again, especially given the beneficial time lag between CHNS' receipt of debtors in H2 at high prices from early 2008 because of high input costs, and its purchasing of raw materials in late 2008 at a third of previous prices.

Prosolenes' comments have been made and addressed many times before and are all accounted for in CHNS' derisory rating imho. If CHNS were on a P/E of 12 rather than 2.7 in the current climate such comments would have more credence.

Debts debts debts...........

Rising debts and working cap.

A one off "Olypmic year" to boost 2008, and RMB strength to boost earnings in sterling terms.

Its getting ramped big time.............be careful, when the short terms start to sell, watch this fall back very fast, as its illiquid.

One wonders what your agenda is Proshorterleans - for someone so negative on this share

Why don't you post on boards of shares you fancy ?

Its a share that is highly illiquid, its well into debt, rising debt, rising working cap, its not cash generative from operations - and some people are ramping it like mad cause they got trapped in at over 200p levels.

This is the kind of illiquid dross you avoid in a bear market, so I am merely pointing this out, people can make up their own minds.

I think most will - personally have invested as this company is in a rapidly expanding market, and has contractual relationships with all of the major players present.

If you think they're bear signs then god help you when you look at the banks balance sheets !

Joe Say, its only on the "recommended supplier list".

Which is a list of many companies that can be used for supply. This is a major difference to what some people try to portray.

CHNS is, well, ever increasing their debt levels, and cash flow negative from operations. They will get hit in 2009 imv with the strengthening Yuan on their exports, and their 2008 figures, whilst good, were only, imv, boosted up by Chinese Telecoms spending in the rush before the Olympics.

All in all, its very highly illiquid, and when you try to buy the price shoots up, when you try to sell the price collapses fast.

If thats a good "investment", well.........say no more.

From the last Annual Report (which excludes developments since - selected snippets only)

Key customers

Back up battery business: China Mobile; China Unicom; China
Netcom; China Telecom; China Tietong; and India Reliance.

PTB business: Beijing Xinri Electric Vehicle Co. Ltd. ("Beijing
Xinri"); Tianjin Taimei Electric Vehicle Co. Ltd. ("Tianjin Taimei");
Tianjin Taifeng Xiaoniao Electric Vehicle Co. Ltd. ("Tianjin
Taifeng"); Jiangsu Yadea Science and Technology Development
Co. Ltd (Jiangsu Yadea).

China Shoto has become the largest back up lead acid battery
producer in China, and we intend to become the largest lead
acid battery producer in Asia.

Last results : http://fool.uk-wire.com/cgi-bin/articles/200809171359336557D.html

Notice :

Net cash generated from operations is in brackets (Negative) - they are therefore cash flow negative from operations.

Cash generated from/(used in) operations (3,261)


Also look at :

"Bank borrowings" and "Trade and other payables"

Rising upwards.........

Proshorter - you can read accounts so lets be honest about them.

Net cash down 4,412 because

div paid 1,050
int paid 1,106
property bought 1,004
short term investment bought 2,832

Not surprising really - as I think you know, so why distort ?

Errr.... trying looking at "NET CASH GENERATED (USED IN) OPERATIONS"

This is the line that corresponds to business performance.

There are other lines which deal with other items, but the one I look at is the operations one, which shows if they are making money.....or are making paper profits and their cash is getting used up generating the revenues (eg, cash flow negative from operations).

Great to see CHNS taking off prior to results - only two or three weeks to go now.

Despite the surge it's still on a P/E of barely 3, with a 5p divi too, plus almost assured growth prospects for a number of years to come as I've posted before.

Nice article here from T.M.F - the title says it all :o))

Good mentions for my Asian faves GNG and CHNS (doesn't mention RCG, but you can't win 'em all!):

http://www.fool.co.uk/news/investing/company-comment/2009/03/24/stocks-so-cheap-theyre-nearly-giving-em-away.aspx

"Stocks So Cheap They're Nearly Giving 'em Away
By Steve Scott

Published in Company Comment on 24 March 2009

"China Shoto (LSE: CHNS) looks like another successful and growing business. The Company manufactures and supplies batteries, mainly to the Chinese market. Its recent trading statement revealed that profits in 2008 will be ahead of market expectations and 50% higher than in 2007. There is some bank debt although it looks comfortably manageable at only 23% of the value of total tangible assets. So why does the market value China Shoto at only 2.9 times 2008 earnings, especially when there is a forecast dividend yield of 4.3% on offer?

It's not alone amongst Chinese based companies in that respect. Fast growing and debt free software provider Geong International (LSE: GNG) may be valued at a more realistic 5.2 times expected current year earnings, however this would fall to only 3.9 times earnings if they meet next year's forecast by broker, Seymour Pierce.

Clearly investors are very sceptical about the sustainability and quality of earnings from Chinese companies. That's not helped by high profile disappointments such as Bodisen Biotech (LSE: BODI). But if the market is wrong, then there is clearly huge upside in these shares."

The price continues to advance, now up to 155p. Still only on a likely historic P/E of 3.7 or maybe less based on the forecast 41.5p EPS for 2008.

News dated today - CHNS' major customer in India, Reliance Comms is stepping on the gas for its expansion plans. It's spending around 120m in one state alone (Karnataka) according to this article!

The Chinese and Indian telecom booms appear so far to be unaffected by and independent of the global downturn - the respective governments obviously see it as extremely important:

http://www.business-standard.com/india/news/reliance-aircel-idea-to-slug-it-outrs-3000-cr/353436/

"While economic recession may have bitten new investments hard, the telecom sector looks set to witness a flurry of activity as it expands into hitherto uncharted territory. Three GSM mobile services providers are hitting the ground running in their foray into Karnataka. These companies are looking to pump in close to Rs 3,000 crore to establish their presence in the Karnataka market, presently growing at a blistering pace.

Reliance Communications, Aircel and Idea from the Aditya Birla Group are set to take on established players Airtel, Vodafone and BSNL in a market which grew at 60 per cent last year with a total subscriber base of 21 million. Bharti Airtel currently leads the pack with close to 10 million subscribers in Karnataka.

However, further transformation lies ahead for the market with Reliance Communication rolling up its sleeves to go all out in the state. Reliance is set to invest around Rs 800 crore to establish its state-wide network. The company already has a strong footprint in the CDMA segment in Karnataka with around 4 million subscribers; and is set to replicate its coverage with the GSM platform as well, being the only operator to offer both services.

According to Reliance Communications, Karnataka is part of its largest launch worldwide the Reliance network covers over 2,000 towns and 18,000 villages in India. With the launch of its enhanced GSM service, Reliance customers will now be able to use a range of over 250 handsets and devices. Reliance customers can now roam on more networks globally in over 200 countries offering a wider choice to customers in India, a source in the company noted.

The company, with a customer base of over 60 million, including over 1.7 million individual overseas retail customers, ranks among the Top 10 Telecom companies in the world by number of customers in a single country."

has anyone lost bulletin boaards for A D V F N and the page loads to USA

Here's Seymour Pierce's new comment from last week.

Note that the results are confirmed for 28th April - one week's time. Given continued low raw material prices (though lthe price of lead has increased a little recently), continued demand for CHNS' products and continued beneficial currency movements compared to last year the outlook should be rosy.

At 155p the historic P/E is now 3.7 - even a 50% share price rise would see a P/E of just 5.5. And it's likely imho that the 41.5p EPS forecast will be beaten anyway:

"China Shoto 3,5 (BUY) - Results preview
CHNS.L (142.5p) Market cap: 33m

China Shoto reports its FY 2008 earnings on 28 April. We expect the company to report PBT of 10.5m on revenue of 170m. This represents an uplift of 50% and 58% respectively. The company is a major beneficiary of cellular telecoms infrastructure spend. We believe the market will concentrate on the outlook for 2009 and 2010 in the context of the growth estimates for China and India. We note that Chinese first quarter GDP data is due out today. Growth of 6-7% is expected. While this is down on our December 2008 estimate of 8%, an above positive 5% number is exceptional relative to other global economies. Against this background we think China Shoto is well-positioned. China Shoto has a modest export exposure (less than 10% of sales) to India. We expect the company will update the market on trading in that territory on 28 April.

Shares in China Shoto have risen by 39% so far this year. Coincidentally, the Shanghai Composite index has risen by the same amount. On our December 2008 forecasts, the shares are trading at a PE multiple of just 3.5. We expect forthcoming results to prompt a re-rating."

CHNS issued terrific forecast-beating 2008 results today - the results were actually spot on 2009's forecasts as well:

http://www.investegate.co.uk/Article.aspx?id=200904280700142...

They made 43.45p EPS compared to 41.5p as forecast, though this forecast had itself been raised 30% from around 31p only at the start of 2009 due to a "significantly ahead" trading statement.

At the current 180p they are now on a historic P/E of just 4.2.

Equally importantly, against a 42m m/cap they now have 22m of net cash, against 11m net borrowings last year. Their net cash flows from operating activities in 2008 were 38.57 million, equivalent to 383% of net profit!

Net creditors/debtors have increased greatly to 25m, so there may have been a little year end massaging going on, but this is still an extremely impressive performance.

CHNS are now "China's largest producer of back up batteries".

And it "intends to, ultimately, become a worldwide green energy solution provider. To that end, a new type of green energy storage product with high technology content is being developed.'"

CHNS effectively has its own research institute. It's already producing high-end lithium-ion batteries as well as the traditional lead-acid batteries, but it's also producing storage for wind power and solar power. I suspect the new storage solution is to do with electric cars (since CHNS already produces for electric bicycles), but I could be wrong.

I have great hopes that CHNS will continue to do well given its bullish domestic and global prospects.

The house (and only!) broker forecast has been increased today as follows:

- this year : 47p EPS (up from 43.5p)
- next year : 50.4p EPS

The 2008 forecasts proved far too cautious, and I believe this year's will be proven to be cautious too.

This year CHNS will get a full year's benefit rather than just a few months of:

- yuan currency appreciation against the pound
- lower raw materials prices
- and lower interest rate charges

At the current 180p, 47p EPS represents a current year P/E of just 3.7.

It's worth noting that net cash at 22m (including short-term investments) represents more than half the 41m m/cap.

And that tangible net assets represent over 50m....

One day the market will wake up to this share.

biggish spread; no volume; no liquidity
any other bright ideas as to why one should buy?

Er...try post 118. Quite apart from the 250k of shares traded today. Enough for most private investor tastes I'd have thought. Not a bad m/cap at 41m now too.

Certainly much better than the 95p share price not so long ago at which price cynic was still living up to his name :o)) Shame he didn't pick some shares up at that time.

i make no apologies about having a very jaundiced view of chinese companies that are then floated onto the gullible occidental markets.

You are I presume having a laff, aren't you.

Any cursory glance at the figures should tempt even the most cynical investor

The share price is now up to 195p - this for a company which:

- made 43p EPS last year
- is conservatively forecast to make 47p EPS this year
- has 22m of net cash against a 46m m/cap
- pays a 5p dividend
- and at a 46m m/cap is valued at less than its tangible net assets

In addition:

- SCSW magazine is out tomorrow. Having backed CHNS in the past, hopefully this issue should have positive coverage of the recent results for its readership to ponder this weekend

- and next Tuesday is the AGM, when we should get a trading update RNS which by all accounts should be nicely positive given all the good news about Chinese and Indian telecoms, power industry and railway infrastructure growth and stimuli, as well as growth in the wind power, solar power and electric vehicle sectors.

The share price is now nicely up to 202p.

The EPS forecast for this year is 47p EPS, with 50.4p EPS for next year (43p EPS achieved last year) There's also a 5p divi.

At 202p the P/E is just 4.3, and CHNS still trades at barely its tangible NAV, with almost half its m/cap in 22m cash!

The average rate for sterling last year against the yuan was 12.86. Even though the pound has risen slightly recently, at the current rate of 11.3 CHNS will continue to benefit strongly from exchange rates this year.

Given:

- lower raw material prices
- favourable exchange rate movements
- lower interest payable on borrowings
- the explosion in Chinese and Indian telecoms

I'm hopeful that 47p EPS this year is a conservative estimate. There may be an increased tax charge this year, and lead raw material prices have rebounded somewhat recently, but these minor negatives should be heavily outweighed by the various large positives above imho.

There could still be an H1 trading statement - this could happen in the next month or so given the 30/6 period end.

We can also be confident that trading to date this year is at least in line with expectations since no update was given at the AGM.

Online looks very promising too - hardly any stock available to buy, whereas you can sell lots at a premium.

Early next year we could be looking forward to 55p-60p EPS if all goes well. On a P/E of just 6 this would give a 330p-360p share price, whilst on a P/E of 10 we're looking at 550p-600p.

No, IMO.

WCC (West China Cement) is the sensible choice for China exposure. There are a number of questions with CHNS which need to be answered by further results statements and in depth looking at the balance sheet.

It's possible to hold more than one stock in a portfolio :o))

As I say, the EPS forecast for this year is 47p EPS, with 50.4p EPS for next year (43p EPS achieved last year) There's also a 5p divi.

At 202p the P/E is just 4.3, and CHNS still trades at barely its tangible NAV, with almost half its m/cap in 22m cash!

The average rate for sterling last year against the yuan was 12.86. Even though the pound has risen slightly recently, at the current rate of 11.3 CHNS will continue to benefit strongly from exchange rates this year.

Given:

- lower raw material prices
- favourable exchange rate movements
- lower interest payable on borrowings
- the explosion in Chinese and Indian telecoms

I'm hopeful that 47p EPS this year is a conservative estimate. There may be an increased tax charge this year, and lead raw material prices have rebounded somewhat recently, but these minor negatives should be heavily outweighed by the various large positives above imho.

There could still be an H1 trading statement - this could happen in the next month or so given the 30/6 period end.

We can also be confident that trading to date this year is at least in line with expectations since no update was given at the AGM.

Online looks very promising too - hardly any stock available to buy, whereas you can sell lots at a premium.

Early next year we could be looking forward to 55p-60p EPS if all goes well. On a P/E of just 6 this would give a 330p-360p share price, whilst on a P/E of 10 we're looking at 550p-600p.

Stop repeating yourself we got it the first time. held these for 3years and only just got my dosh back plus div, so will be putting on the back burner and see if your right. Hope you are but have my doubts.

Balerboy, I'm glad you're back to breakeven. You must have bought at around the all-time highs. Since then CHNS has more than doubled its EPS and improved its Balance Sheet no end - yet here we are merely at the same share price as 3 years ago, on a P/E of barely above 4 and paying a 5p divi.

Investments have to be constantly reassessed, and given CHNS' global prospects in telecoms, let alone in wind and solar power, electric bikes and cars, railways, power infrastructure etc I'm happy that with around 200p per share of tangible assets the current 202p share price is good value imho.

Don't forget the ever increasing focus on the green side.

As this company expands and enters deeper into exisiting overseas markets, plus opens new ones up, this is going to be one of the key SP's

There is what I believe is EXTREMELY important news up last week on the CHNS web site.

China Mobile have now announced the results of their procurement of back-up batteries for the near future.

CHNS's subsidiary, Jiangsu Shuangdeng, are easily the biggest supplier of all the companies in every category shown. This should secure a large portion of CHNS' sales for a while to come imho:

http://translate.google.com/translate?hl=en&sl=zh-CN&...

The last time CHNS was at the current 205p share price the P/E was around 11 or 12 from memory, since when:

- the historic EPS has more than doubled to 43p EPS
- the Balance Sheet has improved immeasurably
- the 49m tangible net assets STILL exceed the current 48m m/cap
- CHNS hasn't put a foot wrong, and has always underplayed its prospects
- CHNS has successfully entered the wind and solar power markets
- and has developed electric car batteries, lithium-ion batteries etc

If CHNS were now to trade at the same P/E it would be at 500p. But in the present climate even a P/E of 6 would see a 260p-290p share price.

If you take the 210p tangible assets per share as a base and add on a P/E of 6 for the trading business, you arrive at a 500p current sum of the parts value for CHNS.

Given the 43p EPS last year, together with:

- improved currency translation since then
- much reduced average raw material prices
- reduced interest payable given the hugely positive cash turnaround (there was 2.8m interest paid last year!)
- together with the bullish outlook and telecoms boom in China, India etc

...I'm hopeful that this year's 47p EPS forecast is understated. There may be an increased tax charge, and lead raw material prices have rebounded somewhat recently, but these minor negatives should be heavily outweighed by the various large positives above imho.

PS : the above was posted on the wrong thread by mistake earlier, so here it is.

From this new article about solar power in China, I gather that CHNS' home province of Jiangsu is one of the key hubs of Chinese solar power technology. Which is handy for CHNS and its solar power energy storage systems:

http://www.telecom.globalsources.com/gsol/I/Portable-solar/a/9000000106028.htm

"Chinas portable solar power systems segment is benefiting heavily from substantial investment in PV cells and related products. The latter is driven by the rapid growth of the worldwide solar power industry, which has registered more than 40 percent CAGR in the past 10 years.

More importantly, it has resulted in a bustling support chain that supplies a range of modules, main controllers, batteries and inverters, enabling most manufacturers to purchase the key components domestically. The countrys output of PV cells in 2008 surpassed 2000MW, accounting for 37 percent of global production."

"Zhejiang and Jiangsu provinces are the key hubs, where more than 100 providers of PV cells and panels are likewise based."

And more here about solar power in CHNS' home province of Jiangsu - 20 large solar power plants to be built there.

CHNS also supply the nuclear power industry BTW:

http://green.venturebeat.com/2009/08/05/china-moves-toward-aggressive-renewable-energy-strategy/

"Chinas energy administration is drawing up plans to increase power generation from renewable sources to 15 percent of the nations total by 2020. To do so, the country will rely more on solar, wind and biomass energy with the goal of deriving more than 200 million emissions-free kilowatts.

While 15 percent might not seem like a lot in California where the mandate is 33 percent of the states total by 2020, the figure is pretty ambitious for a country with such a massive population and higher technological hurdles. In fact, 15 percent would be 13 times Chinas current amount of energy generated by renewables (about 15 million kilowatts, according to VentureWire). The proposal would significantly revise a current target of 60 million kilowatts by 2020.

Achieving the raised bar would require substantial financial investment by the Chinese government and private backers. Rough estimates put the amount at $658.8 billion dollars (or as high as $1.3 trillion including investments from component makers and others) a staggering number that is closer to the U.S.s full $787 billion stimulus package than the $60 billion going to cleantech industries.

Already, there are plans for 20 large solar power plants in Jiangsu Province, and proposals for wind power facilities to be located off the coast of Shanghai. Meeting these renewable sources halfway, the country already has a nuclear strategy in the works that could boost that brand of energy production to 86 million kilowatts (5 percent of energy production) by 2020. Today, nuclear accounts for little more than 9 million kilowatts in China."

Looking good online now - there's just 750 shares at 213.75p available to buy at maximum now, reduced from 10,000....and you can sell plenty at 206p.

A little buying interest now could have a significant impact.

If anyone wanted any more comfort, then remember that CHNS "accounts for over 90% of ZTE's total back-up battery purchases"...

....and note this from ZTE's results this week:

http://www.istockanalyst.com/article/viewiStockNews/articleid/3431738

"In 1H09, ZTEs CDMA base stations achieved a record high shipment volume of 75,000 units: 1.5 times greater than total shipments in 2008. Meanwhile, the Companys WiMAX products have successfully entered high-end markets including Malaysia, Saudi Arabia, Japan and various European countries."

I particularly like the geographic expansion as above and:

"In 1H09, ZTE continued collaboration with mainstream operators from the worlds top 20 most populous countries including Indonesia, Vietnam and Turkey while also successfully forging partnerships with tier-one operators from Europe and the Americas including Verizon, TeliaSonera, Telstra and Telenor. Specific to product groups, ZTE registered year-on-year revenue growth of 46.2% for carriers networks, 29.8% for handset products and 29.2% for telecommunication software systems, services and other products during the reporting period. In the wireless sector, ZTEs industry-leading SDR solution promotes the long-term development of GSM/UMTS/LTE and CDMA products, facilitating a strong increase in market share and competitiveness.

The Companys UMTS products have been deployed by mainstream operators in countries with heavy populations including Indonesia, Vietnam and Turkey and branches of Telstra, TeliaSonera and SingTel, three leading global operators."

Excellent results today:

http://www.investegate.co.uk/Article.aspx?id=200909150700040351Z

To achieve 23.4p EPS for H1 is excellent imo given the H1 world economic climate, as exemplified by the big drop in overseas/Indian sales in the half. The Chinese telecoms boom, which will continue for the next 3 years, is what held up sales and profits, as I hoped they would do.

I believe CHNS remain cheap given:

- a P/E of 4.6 at the current 217p based on 47p EPS
- 20m cash including short-term investments, i.e 40% of the m/cap
- CHNS' m/cap remains less than its tangible NAV
- the likelihood of Indian and other export markets recovering soon

It's also worth noting:

- H2 is usually better than H1 in both profit and cash flow terms
- unusually there were 1.1m of impairment provisions. For example, WNN this morning announced a "normalised" EPS excluding impairments - if CHNS had announced similarly the EPS would have been substantially higher at around 28p EPS
- the new lead recycling plant could be a catalyst for a re-rating
- CHNS have scrapped the interim divi previously, before reinstating the full divi at the finals, so this isn't new. After due consideration of working capital needs and the new recycling plant I feel this will happen again (see below)
- note the 4.3m cash inflows from operating activities (i.e after debtor/creditor movements), compared to the 4m cash outflow last H1, in this the seasonally weaker period

There are negatives:

- results would have been reasonable, but not half so impressive without yuan currency appreciation over the last H1
- the Chairman's going is unexpected, and the resulting combined CEO/Chairman post is not good corporate governance. Perhaps they'll announce a replacement.

Seymour Pierce are very positive today as follows (pasted from another bb) - they haven't always been so regarding their own clients. They should also add the short-term investments on to the cash balance as they have in the past - CHNS actually have 20m net cash including these:

"China Shoto 3,5 (BUY) - Going Green: H1 Results to 30 June 2009
CHNS.L (240p) Market cap: 56m

Results reflect strong demand from China Mobile, China Unicom and China Telecom which are increasing network coverage and need backup batteries to support mobile infrastructure. Accordingly, China Shoto reported sales growth of 41% for the six month period and 47% uplift in pretax profit. This margin expansion reflects a lower lead price and a larger proportion of sales coming from backup batteries.

These results show a pretax profit of 6.4m on revenue of 96.4m for the six month period. Our full year forecast is a pretax profit of 12.5m on revenue of 200m. We are therefore comfortable that China Shoto is on course to achieve this estimate.

The company has announced that it intends to invest in a new lead acid battery recycling project. We see this as a prudent step by China Shoto to offset environmental concerns with its product suite. Accordingly, the group will not pay a dividend at the interim stage as capital expenditure increases. We retain our forecast of a 5p full year dividend. Investors should be mindful that Mr Yang, Chairman and Chief Executive is the companys major shareholder with over 40% of the equity and his interests are aligned with other investors.

We note that China Shotos strong first half performance reflects domestic revenue. Export revenue in the first half was just 3.5m compared to 11.7m in the same period last year. India is China Shotos principal export market. We note that the company has been active in participating in trade fairs during the first half. These include locations from Moscow to Singapore. In the event that these efforts are transformed into sales, there could be incremental revenue in the second half.

China Shoto has announced that the companys Chairman is step down. Cao Guifa joined the company at flotation in 2005. The companys major shareholder and chief executive, Mr Yang will take on the role of Chairman.

Our 2009 estimates suggest that the company should generate eps of 47p. This places the company on a 2009 prospective PER of just 5.1. The company had a net cash balance of 9m at the end of June which gives comfort for a company which is growing so quickly.

Jim McCafferty | Research Analyst | 020 7107 8070 |
jimmccafferty@seymourpierce.com"

Interim dividend slashed.

Cash down by a large amount.

Exports falling.

Weak statements.

Inventory and Debtors rise by large amounts.

Boardroom problems and the major holder who no becomes CEO and Chairman (meaning that in terms of transparency CHNS is even worse IMO) (And its not a good time given their statements today to be becoming less transparent)


Thats why the price went down and will likely keep in a falling trend in the coming weeks and months.

And those currency movements really do "hype" the figures. If you convert the figures back to RMB you can see a different tale.

2008 1st half sales = 957,723,147 RMB
2008 2nd half sales = 1,424,220,260 RMB
2009 1st half sales = 985,157,893 RMB

So sales are really near flat on H1 2008, and well down from H2 2008 to H1 2009.

2008 Interim RMB to Pound rate was 13.9622
2008 Prelims RMB to Pound rate was 12.4398
2009 Interims RMB to Pound rate was 10.2127


So as they report in sterling their sales, EPS, cash etc.. are all being nicely boosted by the falling pound as they convert from RMB to pounds. However, this little "performance enhancer" is now over (and its been worth 30% boost to sterling figures from 2008 interims to 2009 interims)

Always convert figures back to local currency when you get these AIM companies that report in sterling and get a nice boost from currency movements, a better and more transparent picture appears.

Am glad I got out with profit. this is going no where fast.

Well another RNS today.

http://www.investegate.co.uk/article.aspx?id=200909160958131430Z

The ex-Chairman now dumps all his stock for a discount 180p a share to the CEO who is also the new Chairman and also the major holder with now 65% of the shares in his control.

Is it getting all very mucky and messy ? And why did the ex-Chairman dump all his stock for a discount price ? Does he know something is coming ?

CHNS achieved 28p EPS in H1 before impairments. They could achieve at least 56p adjusted EPS this year on that basis, against the current 187p share price.

They have secure growth prospects for the next few years. And there are numerous factors which could lead to an upwards step-change in profits within the next year or two.

A P/E of 3.3 on that basis should be enough for most people.

In particular, Liarspoker's chat with the broker today confirmed that the company have in their view sufficient cash from their 20m cash pile to pay for the new lead recycling facility themselves, with likely enough left over to pay the full year 5p dividend:

http://www.advfn.com/cmn/fbb/thread.php3?id=10937254&from=7663

In addition, I talked to the Seymour Pierce contact recently. A brief summary (my interpretation remember):

- the Chairman wasn't involved with CHNS pre-IPO, so his going has no effect on the company. He was there only to facilitate/advise on the listing and subsequent operations, and his function has been more than fulfilled. Plus...

- his shareholding was disposed of at 180p since that was the prevailing price when his leaving was first mooted in the summer. This backs up the argument that his leaving is perfectly amicable and non-problematic

- Seymour Pierce will be talking to CHNS about appointing a replacement Chairman

- Seymour Pierce recommended the payment of an interim divi, but the company wanted to play safe. As they've done before

- as regards the new recycling factory, SP noted that on past form CHNS would be able to build it in 6 months (rather than the 2 years necessary in the UK), since this was their timeframe in the past for building a factory.

Secondly, let's talk about currency appreciation.

The reported 23.4p EPS in H1 was AFTER a one-off hit of 1.2m impairment provisions.

Thus the true trading profit for H1 was around 28p EPS, compared to around say 17p EPS last H1 after taking into account the much smaller impairment provisions in that half.

To reiterate, at that rate CHNS could announce 56p adjusted EPS before impairment (as for example WNN did the very same day of the interims!!) at the year end. The market's perception of CHNS might then be very different.

Even with 30% currency appreciation, you can see that profits and EPS are significantly up on last year, despite the collapse in exports and the sliding world economy.

And given the complete reversal in sales to India the overall 3% rise in sales in the host currency - at much higher margins - is surely a terrific performance against most companies' performance in the same period.

My initial summary of these excellent results still stands - the only points to reflect on are that the NOMAD should press for a replacement Chairman, and that the NOMAD and/or the company are at fault in not explaining matters as fully as they could have.

Indian/overseas sales are much reduced, which puts the overall performance in perspective - when these recover, and the new facility is in place, one can only begin to imagine what CHNS might achieve.

Overall then CHS appear more than on track to achieve the target 47p EPS and maybe a lot more from the core business, especially with the world economy improving.

rivaldo look, its now even cheaper ;)

There are rumours doing the rounds of cash problems, perhaps thats why the Chairman left and dumped his entire holding.

Wonder if CHNS will do like GNG, sudden big discount placing to get some money.

Its the trouble with these types of companies, its the easiest way they can get orders is by offering the product free up front and "pay when you want later" terms. Its an easy way to ramp up revenues, its also an easy way to ruin when it all goes wrong.

Lets guess, they need to "strengthen the balance sheet" to "pursue large orders" - which means they have run out of cash and need some more working cap more times than not.

Scrapping of the interim dividend (how tiny is that) shows just how bad the cash situation has become, and likely much worse since the end of the period which the results referred to.

Can you smell a placing coming ??

All these companies with poor operating cash flows are making placings. RCG today, GNG recently, CHNS next ?

The market is being rough on them, and so it should really, its to be expected really and any posters attempting to "hype and ramp" them up on revenues is misleading people I think.

Hope not re:placing

The company has already shot itself in the foot at the recent results with the handling of the ex Chairman - fund raising could put another nail in

up today bought a few

I had these for a couple of years, was glad to get out at 205 with a small profit and use funds else where.

thanks balerboy ,are on my sell list for monday ,
realised later on my mistake picked the wrong one, problem is too many shares in my portfolio actively reducing them.
greed and temptation is hard to beat!l

CHNS are now back over 200p, but are on a P/E of only 4.3 based on 47p EPS this year, which may well be soundly beaten given that achieved 28p EPS in H1 pre-impairments.

And CHNS still trades at below its tangible NAV....

The ridiculous thing is that the low rating is cheap given CHNS' prospects in its core telecoms sector alone, yet it has such huge potential in other sectors too which is all in the price for free.

CHNS is the Chinese market leader in energy storage and batteries, and it's already selling products for wind power and solar power and also produces lithium-ion and other power sources for electric cars and bikes.

This new article from last week should get people excited. Remember that Jiangsu Shuangdeng are CHNS' main operating subsidiary. It talks about the huge potential for energy storage systems in wind power, solar power etc - $14.6 billion by 2015 in China alone.

The article (well worth a read in full) concludes:

http://news.alibaba.com/article/detail/business-in-china/100182807-1-pent-up-power.html

"Pent-up power
Published: 13 Oct 2009 09:02:01 PST"

"The off-grid market is government oriented, Chen noted, and predictably government recommended brands such as Zhejiang Tianneng and Jiangsu Shuangdeng have a greater advantage over others."

The share price has risen beautifully now to 238p, but even after today's rise, CHNS remains on a P/E of only 5.1, and is finally above its tangible NAV :o))

And with 120k shares traded today (including PLUS) volumes have been extremely healthy by CHNS' standards. A 14.5p rise today on excellent volumes is a very good sign going forward.

There was an excellent supplement in yesterday's FT titled "The Future of Energy". The relevance to CHNS?

Bear in mind that last year China became the world's leading exporter of energy technology and is rapidly expanding its use of renewable energy, including wind and solar power. It's also expanding its energy network at a rate equivalent to the UK's entire power output each year.

There are four trends shaping the world's energy system:

(1) Electrification : shifting away from oil and gas towards electricity as the principal form of energy delivery and use. The FT states that the great problem with electricity is power storage...

As we know, CHNS are already selling wind and solar pwoer energy storage systems, and are producing electric bike batteries and researching electric car power systems.

(2) De-carbonisation : electrification is important as it's easier to cut CO2 emissions from power generation than from transport fuels. Nuclear power is the best-developed form of low-carbon energy, and is widely expected to increase in usage.

CHNS already supply to the nuclear industry.

(3) Localisation : energy independence for every country. We all know about China's attempts to tie up the global supply of oil and gas, rare earth minerals etc.

If China succeed to any extent, then CHNS will be in prime position to exploit this as the Chinese market leader.

(4) Optimisation : more efficient and productive use of energy.

CHNS have over 100 patents, are introducing lithium-ion batteries etc etc.

The Chinese government has said that renewable energy will account for 15% of energy consumption by 2020.

Only a small proportion of this business will do wonders for CHNS. All of this is in the current price for free, since the P/E of 5 relates only to the core telecoms business, which we know will continue to thrive for the next two or three years at least given the massive telco infrastructure expansion in China.

CHNS' share price is now at an all-time high of 265p. Yet it continues to trade on a ridiculously low P/E.

Even now at 265p the P/E is just 5.6, and the m/cap is not far above tangible NAV. A 50% share price rise from here to around 400p would still mean a P/E of only 8.5. The P/E at the current price would drop to only 4.8 assuming a conservative 55p EPS next year.

And this low rating is predicated purely on CHNS' core and fast-growing telecoms business. Its excellent prospects in wind and solar power, for which it's already selling products, and electric power are in the price for free...

It's worth reiterating that:

- CHNS is the Chinese market leader in its field
- CHNS is on course for 200m of sales this year. Not bad compared to the 60m m/cap. The PSR is therefore extremely impressive
- CHNS' CEO is (from memory) Chairman of China's National Battery Association, so CHNS is likely to continue to have a large say in that country's strategy and production of batteries and energy storage systems. Not to mention the developments in wind and solar power etc...

Online on Friday you could not buy any shares at all!

And you could sell loads of shares at ABOVE the mid-price.

Which indicates that there is continuing demand for the shares, whilst there is little stock out there to satisfy demand at the current P/E of just over 5.

The signs are good based on the above.

Terrific news today - CHNS announced that 2009 PBT would be "materially ahead of market expectations":

http://www.investegate.co.uk/Article.aspx?id=201001280700062377G

Historic 2009 EPS should now be at least 52p EPS given previous forecasts of 47p EPS.

At the current 316p that's a minimum historic P/E of 6.1. And that's after an unusually large impairment charge in H1.

The "true" adjusted historic EPS for 2009 could be around 60p or more, which would leave 2010 looking at perhaps 70p+ EPS given normal impairment charges.

That's a current year P/E of 4.5.

The planned lead recycling facility might come on stream this year and would materially and quickly improve profitability.

A poster elsewhere noted a comment from the house broker - "Seymour Pierce say price target of 500p is both realistic and conservative", targeting EPS of 50.4p in 2009 and 53.8p in 2010".

Those EPS targets are VERY conservative. 50.4p EPS for 2009 is likely to be the house broker playing safe as in the past, allowing them to raise their forecasts and target prices again after the 2009 results are published soon.

The m/cap is now almost 80m. An inkling of a dual Hong Kong listing in the upcoming results would likely see a further share price rise which in itself would see the m/cap at 100m, i.e an acceptable level for such a listing.

An excellent post on ADVFN listed comparators for CHNS in terms of having lead re-cycling and battery manufacturing facilities:

"Hoppecke Batteries, Germany .. privately held
Exide .. public. On a p/e of 9 ish but laden with debt & losing money
Johnson Controls .. their energy division.
Coslight .. Asian peer listed on hk @ p/e of 19"

Battery demand from Telco's in India, China and the EU are all set to grow as 3G networks roll out, and in the EU there's a need for basestation batteries to be replaced through life-cycle redundancy.

Given that CHNS had 20m+ net cash at the end of H1 - before the seasonally much stronger in cash flow terms H2 - CHNS' cash pile could be a lot higher now.

The proposed lead recycling facility could therefore be funded by either one of or a mixture of:

- existing net cash
- use of extensive but currently unused bank loan facilities
- a small fundraising via a fundraising at a much higher share price in Hong Kong via a dual listing

Whichever way it is funded, the new facility should have a very positive impact on earnings.

As it is, the core CHNS business is evidently performing extremely well.

As I've noted before, CHNS has yet to be re-rated for its entry into renewables via:

- wind power storage products
- solar power storage
- electric bike and car batteries

On a P/E of 4 or 5 for 2010 even a 50% re-rating would leave CHNS only on a P/E of 6 to 8.

Strange company CHNS. Why talk about just PBT ?

I mean if your results are ahead they are ahead. Why say just Profit Before Tax is materially ahead, and this be followed up by a revised broker comment which puts EPS up just a little.

If your PBT is materially ahead then all your results should be, so is there something going on with tax ?

Looks murky to me, nobody just highlights PBT materially ahead.........you say your results are ahead.

Never mind, the issue here is not revenue growth or EPS, its all about cash.

The prelims should show strong cash, but the problem is always H1 results, the interims.

Cash outflow is tough in the 1st half, and they cut the interim dividend last results and now are spending lots of cash on a new recycling plant.

So while prelims for last year might be strong, whats the cash situation going to be like at the next interims (this 1st half).

I mean, if they have so much cash, why the hell did they cut the interim dividend last time ????????

Murky ?

Guess there's no pleasing some people