I bought some GNG recently at 18p (price now up to 26p) given:

- excellent trading update giving a current year P/E of 8 or 9 on likely 3p-3.5p EPS
- 2.6p historic EPS to 31/3/06 and a historic P/E of 10
- contract wins announced post-IPO in June 2006
- 1.9m of net assets, with 820k of cash, against a 6.8m m/cap
- results to be announced 28th November following the trading update

Here's the trading update:
http://www.investegate.co.uk/Article.aspx?id=20061031080000P4198

I gather GNG's CEO and CHairman (both superb English speakers) will be over here next week to tour the City, give press interviews etc.

GNG intended to raise $7m at IPO, but raised only 500k due to terrible matket conditions at the time in June. Despite this they've now announced that they're almost going to meet the broker's estimates as calculated on raising the full $7m.

GNG should now be on course to make around 3p-3.5p EPS this year to March'07. This leaves them on a current year P/E of only around 8 or 9.

Heres their IPO RNS from 23rd June 2006 (the Board of Directors is extremely impressive):

http://www.investegate.co.uk/Article.aspx?id=20060623081500PF52B

This is what GNG do:
GEONG has established itself as one of the market leaders in the Peoples Republic of China in providing content management solution software products and related services for large enterprises. GEONG's flagship product range, the GEONG PortalAge series, is used by the top 5 Chinese banks and 12 out of the top 20 securities firms in China. It is an enterprise server software product which combines a number of optional business solution components and customisation modules that can be used to provide individual solutions for a range of industries including those that require real-time or time critical applications such as internet banking.

Note the wording a range of industries.

In slightly more detail, GNG has a 6.8m m/cap, with 26.12m shares in issue.

GNG made $1.28m post-tax profit for the year to 31/3/06. At $1.87 that's 685k, or 2.6p EPS, for a historic P/E of just 10.

The brokers forecast on IPO was for $1.89m post-tax profit this year to 31/3/07, or around 3.7p EPS, for a P/E of just 7.

And per the pro forma in the prospectus GNG had at 30/4/06 1.9m of net assets, including 820k of cash, against the current 6.8m m/cap. Thus the continuing business making a $1.28m historic profit after tax is valued at just 4.9m.

The prospectus noted that GNG are trading in line, and there's been some excellent announcements post-IPO at the end of June to indicate that things are continuing to go well:

July : a $350k contract win with Huawei-3Com, who employ more than 4,500 people worldwide:
http://www.investegate.co.uk/Article.aspx?id=20060724074128PFD9C

October : a $500k contract win with Air China:
http://www.investegate.co.uk/Article.aspx?id=20061018071237PC25A

In the same RNS, GNG stated that their solutions "are already being used by Shanghai Airlines and China Travel International and will allow us to gain a larger share in this fast growing sector."

October : core supplier status from IBM:
http://www.investegate.co.uk/Article.aspx?id=20061018071206PB237

November : new contract win with China's Bank of Communication (one of China's "Big Four" banks):
http://www.investegate.co.uk/Article.aspx?id=20061121070205P7788

The reason for the post-IPO fall is some of the pre-IPO $300,000 loan note holders from late 2005 turning their converted stock for a quick profit, and a complete lack of PR. GNG also raised less than they hoped for on IPO because they floated just after the FTSE had dropped calamitously from 6,100 in May to 5,600 - this of course also contributed to the artificial fall in the share price post-IPO.

Note also from the prospectus that 80.16% of the shareholders, including the directors, are locked in for from 6 months to a year, so there are only 5.2m shares in free float, or around 1m worth.

On a 6.8m m/cap, a company making 1m post-tax profit could have rather a long way to go imo. DYOR etc.

Corporate website : http://www.geong.com/Site/Home/EN

Hi soul yes I take red hot penny shares but not very impressed with it and I signed up to Lemming investor.com well worth 60 as I have made more from that than ever before. just about every share they research has done very well eventually--they did TMC and I didn't buy until yesterday kicking myself for leaving it so long!
epy I found myself. I've just been pointed in the direction of cdn--again left it late but I'm now in. I also look carefully at the first page of the other side and pick up some shares that seem to be causing great excitement-certain posters I respect are good at telling each other to check out certain shares.I tag along as well!

Hi folks - not a bad contract yesterday was it? Only Lenovo, one of the biggest companies in Asia, and only achieving around 20% of the forecast turnover to March '08 in just one contract, that's all...

I've just come across this which hasn't been posted before from earlier this month.

Note that they expect a "rapid revaluation" from 64.5p....and this was written before yesterday's news:

http://www.growthcompany.co.uk/market-research/254572/gall-eke-corporate-partners.thtml

"Gall & Eke Corporate Partners
Companies: GNG
03/04/2007

Gall & Eke reckons that investors should take a look at Geong International. It is a leading provider of content management software and solutions and possesses the second-largest market share of collaboration software products in China, according to the China Centre of Industry Development. Geongs products are provided to a wide range of companies including the top five Chinese banks and two of the top three Chinese futures exchanges, as well as multinational corporations such as IBM and Dell.

Geong recently strengthened its core market through contracts with Haitong Securities and China Asset Management and has reached agreements with Volkswagen and Shanghai General Motors deals that mark its expansion into the automobile sector. Geongs first half results were also impressive, with gross profit up 51 per cent to $1.55 million. The multitude of recent contract wins, coupled with the companys impressive results, demonstrate strong growth potential. Currently trading at a 12-month rolling forward p/e of approximately 11, with earnings growth of 22 per cent, the stock is attractive.

The markets within which Geong operates are forecast for strong growth, particularly Chinas information and technology sector. Gall & Eke believes that this, when combined with the implementation of Geongs strategy to gain penetration into the second tier of Chinese banks, will provide a catalyst for rapid revaluation of the shares. (Gall & Eke associates are holders of this stock.)

GEONG International AIM 16.96m 64.50p"

Rivaldo is definitely one to take notice of-he talks about some good companies.
I'm pleased to say I beat him too it on this one!

Chuckle :o) Up nicely again today, peeps: GNG Bid: 66p Offer: 70p Change: 3.5

Running away with itself this morning: GNG Bid: 80p Offer: 82p Change: 10

GNG Bid: 80p Offer: 85p Change: 11.5

wow--people waking up to this one at last! Glad I topped up recently. :0)

MP, I wish I had topped up too. Crazy - a week ago I looked at this and thought, "The SP has done nothing for a while; should I top up?"

Would have been an easy 50%, but never mind.

BTW take a look at AMBR - up about 35% since mid-Feb. PE 9

thanks

BUY BUY BUY... This will go to 250p!

is that all ? :-0

another little nudge up today: GNG Bid: 83p Offer: 87p Change: 2

And going for it again today: GNG Bid: 93p Offer: 97p Change: 10

Another couple of pence and I'm on a three-bagger :o)

Don't jinx it, soult! We're in with you on this one (thanks to your tip). But it can't go on forever.

Harry, you are dead right - I decided that perhaps the valuation might be getting a little bit fruity and have sold half my holding at 90p. Pity I didn't wait until just now, as the SP is:

GNG Bid: 95p Offer: 98p Change: 11.5

However, I'd rather not be too greedy and let the profits slip.

Excellent results out today:

http://www.investegate.co.uk/Article.aspx?id=20070515073638PAA67

Basic PAT was $1.53m. Add back:
- $73k share-based payment expenses
- $67k intangible amortisation
- $75k H1 AIM listing costs

Adjusted PAT is $1.745m, which equates to 3.45p EPS....or $6.9c, well above the broker's forecast $5.7c.

Nice. And GNG has $1m net cash, with $4.7m of blue-chip debtors too.

International SmartBox sales are about to start...

GNG deserve some kudos, and not just for the excellent figures:

- they've produced results within just a month and a half of the year end. This is more than can be said of most PLC's
- and they've issued the full Annual Report with all the Notes, disclosures etc within that month and a half. No buggering around with a couple of desultory Notes, just get the whole lot out there!

If you've ever been involved with a PLC reporting process you'll now how difficult it is to get the whole shebang out in good time, let alone as quickly as this.

It's a credit to GNG's professionalism and a positive for their credibility.

I'm guessing 5p+ adjusted EPS this year is realistic with the contracts already secured, with further upgrades along the way as new contracts get announced.

It's worth noting that GNG increased their core profit after tax by 68% from $1.215m to $2.046m after adjusting for intangible amortisation, share-based payments and full AIM compliance and listing costs.

A similar increase would take this year's core PAT to $3.44m, which equates to 13.17c or around 6.7p EPS

Going with the cautious 5p EPS and $2.6m PAT I'd say a current year P/E of 15.8 at 79p is hardly demanding given the trading history, the potential, the blue chip client base - and the safety margin given by the already secured contracts.

If you subtract the $1m cash pile and the $4.7m of trade debtors which is effectively cash the P/E would reduce to just 13.6....

Seymour Pierce's forecast was for $1.9m PAT this year. This is clearly over-cautious garbage imo given GNG made $1,745m adjusted profit last year! Do they really think, especially given the Lenovo contract, that GNG will increase PAT by only 8.8% this year?!

Incidentally, the Bank of Communications, one of China's largest banks, IPO'd in Shanghai today, raising 25 billion CY for expansion and acquisitions:

http://www.marketwatch.com/news/story/chinas-bank-communications-a-shares-soar/story.aspx?guid=%7BAA7D05A0-D30C-405D-B22E-6B521A55BF37%7D

The relevant part is that both Bank of Communications and Ping An, the brokerage commenting on the IPO in the above piece, are both clients of little 'ol GNG.

It's nice that the results are out so early in the week too. It means that there's a chance of some nice coverage in Thursday's or more likely Friday's share magazines.

Good post Rivaldo,
Very pleased with results and more than happy to hold for at least 2 years minimum here - in other words nice to see the results confirm everything is on (high growth) track.


Financial Highlights

* Revenue up 48% to US$8.12 million (2005: US$5.48 million)

* Gross profit up 51% to US$4.47 million (2005:US$2.97 million)

* Gross profit margin 55% (2005: 54.3%)

Just to add from from your post above:
With Revenue growth of near 50% on a very healthy gross profit margin of 55%, combined with the contracts won of late (giving some forward visibility) and to cap (pun intended) it all on a low market cap of 21m approx. Leaves plenty of mileage left in this one.

I owe you a drink on this one Rivaldo, (what a great find). Thanks.

Affc21, perhaps when GNG is at 200p (which would still only be a 50m /cap) we'll all meet up for a beer or five!

I've talked to the PR agency. GNG will be in the UK next week presenting to institutions (that's heavyweight institutions, not private client brokers, private investors etc). They'll also be meeting the press.

GNG have a rather good story to tell. Progress should be interesting over the next few weeks.

Thanks for the update Rivaldo, will certainly look forward to any feedback from any presentations that are given.

When you mentioned above "perhaps meeting up for a beer or five" - I'm glad you mentioned no more than five (that's just about my limit these days)!!!!! LOL

Joking aside Thanks for all the time and input that you put into your posts, I have found them a mine of information.

anyone know of this week's presentations