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.

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