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

You add it up

Major ShareholdersShares in issue:26.1m1p Ords Name Amount % Holding
Pershing Keen Noms Ltd 18.01%
Weldong Wang 14.22%
Henry Hak-Yan Tse 13.61%
Jee Wah Miu 8.02%
Keen Eak Teo 6.40%
Bo Yuan 6.32%
ZhengHong Yang 6.32%
Hichens Harrison & Co PLC 3.83%
MinRen Guan 3.26%
Sai Chuen Au 3.20%
Keen Whye Lee 3.20%

Hi Rivaldo - thought I would join you here and add a few of my thoughts as regards GNG:

Seeing as the Company expects figures for the full year to 31 March 2007 to be
only marginally below current market expectations (my guess somewhere in the region of 3.5p EPS), then for next year they should easily make 4.5p EPS at least, which would place the share price at 45p on a PE of 10 (not forgetting of course that the stock-market is always forward looking).

Results shortly, which should help highlight and confirm what we are expecting. Confirmation is essential here seeing as these will be their first results since listing.

Looking very good here, and happy to be a holder.

Nice end of day close, with now the oppertunity to buy in at the placing price of 30p.

Hi affc21. Couldn't agree more. The broker forecast for next year is actually for 5.9p EPS, so at 29p the forward P/E is just 4.9.

Having raised less than they wanted at IPO due to the terrible spring markets GNG might not be able to achieve the full development and marketing of SmartBox as planned - but even so your 4.5p EPS shouldn't be unreasonable.

I'm looking forward to next Tuesday's results - the trading statement gives every reason for optimism.

Thanks Rivaldo. I added after your posting

Thanks for the info on this company. I am now in even though it took 15 minutes for my stockbroker to work my trade. Must be that this is an illiquid stock which bodes well if the results are good.

Kind regards
Raymond

Morning all!

Rivaldo, I have jumped in on this just now, persuaded to take a small speculative position by the apparently very good prospects. Many thanks for the tip.

BTW, nobody has yet posted today's news of yet another contract win:

Geong International Limited - New Contract Wins
24 November 2006

GEONG INTERNATIONAL LIMITED
NEW CONTRACT WINS

GEONG International Limited ('GEONG' or 'the Company'), the AIM listed, Beijing
based, provider of content management software and solutions, announces that
its wholly owned subsidiary, GEONG Business Networks Limited, has signed two
agreements with IBM Global Business Service ('IBM GBS') to provide its
PortalAge based solutions to Motorola China Electronics Ltd ('Motorola'). The
amount of the contracts total approximately US$153,000.

GEONG will assist IBM GBS to enhance and develop Motorola's Channel Management
platform in China.

Motorola was recently ranked number 6 in China's Top 500 Manufacturers List
published by the National Bureau of Statistics of China and was the only
foreign company that made its way into the top 10.

Wang Weidong, Chief Executive of GEONG, commented: 'We are delighted to be
working with Motorola China. Their addition to the list of blue chip clients we
work with is yet another positive step for GEONG.'

-ends-


Good luck to all.

Hi Rivaldo - my 4.5p EPS at least for next year is as stated - at least (ultra conservative), just stating that even if they were to earn only 4.5p P/S for next year they are still cheap. But personally I am expecting more.


And more news this morning (AFX version):

Geong unit Geong Business signs 2 contracts worth 153,000 usd with IBM in China
LONDON (AFX) - Software solutions provider Geong International Ltd said its
unit Geong Business Networks Ltd has signed two contracts worth 153,000 usd with
IBM Global Business Service (IBM GBS) to provide its PortalAge based solutions
to Motorola China Electronics Ltd.
The company said it will assist IBM GBS to enhance and develop Motorola's
channel management platform in China.

newsdesk@afxnews.com


And the blue chip client list gets even larger, this is very good news.

Morning all - a bit of a mark-down by the MM's this morning, by the looks of things. They must be trying to shake out some stock before the results. that's the only interpretation I can give to a 15% drop in the SP on turnover of a very piffling 72k shares.

Roll on a continuation of the upwards trend on results day tomorrow!

Hi Soul,

I welcomed your comments. I wondered what might be going on. Fingers crossed for tomorrow results. Only just bought on Friday on anticipation of a contiuing sp moving north.

Mr T, thanks for your feedback. I hope I'm right; it's just my best guess, but I can't think of any other reason for such a drop given the apparent level of anticipation about the forthcoming results, and the volume traded certainly doesn't warrant the value destruction involved. This kind of thing happens with very illiquid stocks - SOLA's SP has also been all over the place recently as the MM's try to stimulate some movement.

Best of luck, etc.

Just topped up - drop seems overdone on the selling.

AFFC, I'd join you if I had any liquid - may still give it some thought.

soul traders - GNG was probably due a small pullback in share price, considering the rise in the share price of late. But even so today's pullback seemed a bit harsh, so took advantage of it.

Agreed - with the SP doubling in less than month, you could expect some kind of profit-taking. However, the timing and nature seemed all wrong - anyone who bought on the basis of the figures quoted in this thread is certainly not going to be selling now unless very overweight in the stock.

Agreed. I am not selling.

SP recovering some of the morning's losses:

GNG Bid: 28p Offer: 30p Change: -3

Well done, AFFC, looks as if you topped up at a good time.

What S.P. did you get in at Soul? wondering how potentially high these could go, are the results out yet?

I got in at about 32.25p on Friday, so you could beat that if you bought today.

Results due out tomorrow. How high they could go is anyone's guess, but see the earlier posts on this thread for some predictions.

Looks good to me, but could be risky, and of course PDYOR.

Well the shares are back to 26p which is where I came in.
Contract wins and DELOITTE'S FASTEST 50CHINA awards and they still drop, despite a cheerful set of results.
This another case of China's Griffin Mining which I sat on at 28p for 18 months until
production really took off.