.

Up another 5% and now over 200p mid price.

I do not hold CHNS anymore, moved it all over into WCC as I think WCC is the best Chinese stock on the AIM, and so lowly rated it should multibag in 2 years.

Write up from the CHNS AGM, looks like earnings are forecast to fall from 43p to 40p.

http://www.fool.co.uk/news/investing/company-comment/2009/06/17/alices-agms-china-shoto.aspx

.

Did the same this morning, have held since 06 and not done a lot for me bar divvy, so got 193p, + div. little profit better than none.

Yep. Looks like tax is going to increase and their currency gains diminish now with sterling going upwards.

Markets will see a fall in earnings from 43p to 40p and it could be sold off hard then.

Shame, nice business but markets and sentiment are just that. I am much happier having put all this money into WCC earlier, that one has potential to grow wildly in the coming 2 years.

Good luck Prosolenes.

The EPS forecast for this year is 47p EPS (43p EPS last year) and is unchanged - I've spoken to the broker today. The AGM attendee's note was incorrect.

At the current 186p the P/E is just 3.95, and CHNS still trades at less than tangible NAV with half its m/cap in 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 11.1 CHNS will continue to benefit strongly from exchanger 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 is a conservative estimate.

The broker also indicated there should 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.

There is what I believe is EXTREMELY important news just up 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&tl=en&u=http%3A%2F%2Fwww.shuangdeng.com.cn

" WIIG successful dual 12V Battery China Mobile Products

中国移动2009年UPS后备电池（12V）产品集中采购工作于近期完成，中国移动对外公布了本次采购结果及各厂商份额分配情况公布如下（排名不分先后）：

China Mobile in 2009 UPS back-up battery (12V) products focused on the completion of procurement in the near future, China Mobile announced the results of the procurement and distribution companies announced share is as follows (in alphabetical order):

1、12V/65Ah产品：江苏双登集团有限公司（32.26%）、浙江卧龙灯塔电源有限公司（25.81%）、深圳市今星光实业有限公司（22.58%）、广东中商国通电子有限公司（19.35%）等4个厂家； 1,12 V/65Ah Products: Jiangsu Double Tang Holdings Limited (32.26%), Zhejiang Wolong Lighthouse Power Co., Ltd. (25.81%), Shenzhen City Industrial Co., Ltd. today Starlight (22.58%), Guangdong in the state Electronic Co., Ltd. ( 19.35%) and other four manufacturers;

2、12V/100Ah产品：江苏双登集团有限公司（38.89%）、深圳市今星光实业有限公司（31.11%）、山东圣阳电源股份有限公司（8.33%）、浙江卧龙灯塔电源有限公司（6.67%）、广东中商国通电子有限公司（5.83%）、艾诺斯（中国）华达电源系统有限公司（5.00%）、北京南都昊诚电源设备有限责任公司（4.17%）等7个厂家； 2,12 V/100Ah Products: Jiangsu Double Tang Holdings Limited (38.89%), Shenzhen City Industrial Co., Ltd. today Starlight (31.11%), Shandong San Yang Power Co., Ltd. (8.33%), Power Co., Ltd. Zhejiang Wolong Lighthouse (6.67 %), Guangdong in the state Electronic Co., Ltd. (5.83%), EnerSys (China) Huada Power System Co., Ltd. (5.00%), Cheng Hao Beijing has the Southern Power Equipment Co., Ltd. (4.17%) and other seven manufacturers ;

3、12V/150Ah产品：江苏双登集团有限公司（27.78%）、深圳市今星光实业有限公司（22.22%）、浙江卧龙灯塔电源有限公司（19.44%）、山东圣阳电源股份有限公司（16.67%）、广东中商国通电子有限公司（13.89%）等5个厂家； 3,12 V/150Ah Products: Jiangsu Double Tang Holdings Limited (27.78%), Shenzhen City Industrial Co., Ltd. today Starlight (22.22%), Zhejiang Wolong Lighthouse Power Co., Ltd. (19.44%), Shandong San Yang Power Co., Ltd. (16.67 %), Guangdong in the state Electronic Co., Ltd. (13.89%) and other manufacturers 5;

4、12V/200Ah产品：江苏双登集团有限公司（38.89%）、浙江卧龙灯塔电源有限公司（31.11%）、深圳市今星光实业有限公司（9.68%）、艾诺斯（中国）华达电源系统有限公司（7.74%）、广东中商国通电子有限公司（6.77%）、山东圣阳电源股份有限公司（5.81%）等6个厂家。 4,12 V/200Ah Products: Jiangsu Double Tang Holdings Limited (38.89%), Zhejiang Wolong Lighthouse Power Co., Ltd. (31.11%), Shenzhen City Industrial Co., Ltd. Star today (9.68%), EnerSys (China) Huada Power Systems Limited (7.74%), Guangdong in the state Electronic Co., Ltd. (6.77%), Shandong San Yang Power Co., Ltd. (5.81%) and other six manufacturers."

Sold out of this one when it first went through 200p some months back, and it was a good move as I have trebled that money again in recent months.

As its now back to over 200p and results are soon its worth pointing out to watch for cash flow at the interims.

There could be significant outflow of cash into working cap, and the level of this will be a key thing to look for.

The headlines will be good, but the devil may be in the detail of the cash flow statement, so keep an eye out for that.

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.

Interesting article :

http://www.fool.co.uk/news/investing/investing-strategy/2009/11/03/china-and-the-bigger-fool-theory.aspx

.

One to avoid for now ? Interesting write up.

http://www.stockopedia.co.uk/article/view/34120


.

The company openly says cash is tight and so cuts a small interim dividend to save cash, yet the figures released show cash at 32m (but with borrowings up to record levels).

The Chairman throws the towel in, dumps all his stock, at the same time.

The company has committed to a recycling plant thats going to severely use up the cash.

Whilst H2 is always cash positive for CHNS, in general H1 severely uses cash in working cap (or you can fund it by bumping up your borrowings from the banks).


With cash being used to fund this recycling plant, and with the company openly saying cash is tight, would it not, looking forward, suggest to people that whilst the Finals might look nice, interim figures in 2010 could be rather "cash tight". Could it be that the Chairman did not agree with the recycling plant as it will necessitate more cash being found by the company ? Will it mean that come year prelim figures, the company will be looking for placing monies in order to boost the cash position ?

Was the point of the recent city presentations a first step for the begging bowl to be put out soon, in order to raise funds to ensure that come H1 2010 they are not going to be struggling for cash and with bank borrowings already high could it be they will be forced into a sudden placing to boost the balances, if they cannot secure funding in the interim period ?

2008 and 2009 was a period of massive expansion for telecoms with new base stations going in on a massive scale, however, the outlook for 2010 is less new stations and lots more simple upgrades to existing. That would explain CHNS trying to move into new markets as the outlook for base station batteries is weakening along with increased competition.

I am unsure why the Chairman moved on so suddenly and dumped all his shares, but IMO he could have seen that the recycling plant is going to push cash to the limit and might mean a placing to raise funds. On top of that the base station battery outlook is weakening when you look to 2010 and 2011.

Therefore, as I am sure many have learnt, do not get fooled by people spouting EPS figures.

Cash (and committed cash spend) and outlook are key, not the EPS figures.

I have warned about placing worries for some time, nice to see a certain CHNS bull finally admitting that it may be necessary.

However, in the present market, the wolves will drive the price down if they get any sniff its going to be attempted.

To be expected.Could be a long period of negative growth now...not good at all. With the RMB to get even more appreciation it will cut back further on their export business and margins.


China Shoto plc
AGM Statement
RNS Number : 9760N
China Shoto plc
22 June 2010

AGM Statement & Trading Update

China Shoto plc, a leading Chinese battery producer and the largest supplier of back-up battery to China's telecommunication operators, will hold the Company's Annual General Meeting at 10.00 am today.

Yang Shanji, Executive Chairman, will make the following statement at the meeting:

Current Trading

In the Preliminary results for the period ended 31 December 2009 announced on 28 April 2010, the Company stated that they expected that China's major telecoms operators would shift their investment priorities from infrastructure construction to product marketing and development.

The Chinese government has increased greater control over low carbon, energy reduction and environmental protection. Accordingly, China's major telecom operators have reduced investment in infrastructure projects. Lower levels of investment have reduced domestic demand for back up battery products.

The Board had hoped that a recovery of global markets and the development of overseas, export opportunities would mitigate the fall in domestic demand. The Company remains committed to developing international sales, and it has achieved higher sales of certain product lines in difficult conditions. Nevertheless, the Company has experienced significant competition in overseas markets and global markets remain fragile. Further, exports and margins have become less competitive as the Renminbihas strengthened.

As a result of these factors, during the first five months of the 2010 financial year, revenue and profitability has fallen by approximately 15 per cent. when compared against the same period in the previous financial year.


Outlook

The Board is confident of remaining the largest back up battery manufacturer in China. It is well placed with its large R&D facilities providing improved products. The Company continues to expand its environmental activities and is progressing with its major lead recycling programme which will position the Company favourably. The Board remains committed to developing its strategy of developing international sales. A further update on trading, will be provided as appropriate.

Bad news comes in three's normally, and todays statement suggests to me this is just the start, there is more bad news to come.........

Brave people buying today, this could easily fall to 120p levels with more bad news to come.

Perhaps 40p EPS this year (down from 98p) and with a company thats gone ex-growth then 3 times earnings is fine, pending further bad news.........

One to avoid many will say.

Signs of a slowdown in China and increased competition overseas the valuation looks cheap and seemingly for good reason!

China Shoto surely now risks being viewed as an old style polluter, having to spend increasing amounts on environmental compliance, operating in what could unfortunately turn out to become a low growth market. The strengthening currency could also make life increasingly hard in overseas markets hardly the high growth offering investors seek from emerging markets.

www.investorschampion.com

CHNS is still too overvalued at 200p... 100p would be a fair value.

185p now... continuing downwards.

Looks like it missed by a mile and the business model with a focus on telcos needs revision!

Back to electric bicycles - the original focus on IPO
Commentary on www.investorschampion.com

China Shoto net profits down by around 30%
StockMarketWire.com


Chinese battery producer China Shoto estimates full year net profits will be down by around 30% on 2009.

The firm said it had experienced some challenging trading conditions in 2010 and the substantial decrease in the levels of investment by the three major Chinese telecom operators was expected to adversely affect the company's financial performance.

It said the unusually high spending in 2009 was fuelled partially by an economic stimulus package from the Chinese government.

It added: "As a result of reduced levels of spending by the three major Chinese telecom operators, competition has increased and contributed to gross profit margins declining when compared to the year ended 31 December 2009.

"As expected, the company's trading performance did improve during the second half of the year; however the board estimates that net profit for the year ended 31 December 2010 will decrease by approximately 30% when compared on a year-on-year basis to the previous financial year."