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

GNG doing very badly... 14p now

Looks very very fishy to me.

RCG ring any bells ?

http://www.etencatnagar.com/discussion/2011/12/13/chinas-accounting-issues-increase-indias-opportunity/

China’s accounting issues increase India’s opportunity

Financial Reporting, Dec 2011

A problem for Chinese companies is turning out to be an opportunity for Indian ones. The recent controversy over accounting standards of Chinese firms listed in the US is forcing investor pools which traditionally invested in these, to capitalise on their high growth, to look at similar investment opportunities in India.

The Securities and Exchange Commission, the market regulator in America, is conducting a review of accounting problems in dozens of China-based companies after they began disclosing auditor resignations or book-keeping irregularities.

For example, one of the ‘Big Four’ accounting firms resigned as auditor of a Chinese software company in May, saying it had found falsified financial records and bank balance confirmations. Investment banks based in Singapore and the US, which had helped the Chinese companies list on Western exchanges, have begun to set up shop in India. “We have received at least six queries in the last couple of weeks from our investor base about good Indian stories,” said Jeffrey O Friedland, managing director, Friedland Global Capital.

The US-based investment bank had primarily operated in China, helping at least nine companies list on the US and Canadian exchanges in recent years.
Friedland said there is a huge India interest in his investor base, which comprises family groups, family offices and high net worth investors. The typical ticket size ranges between $500,000 and $2.5 million. These investors are looking at high growth in emerging market opportunities that are better than the near-zero interest rates back home and, at the same time, without governance issues. “China is out for them for at least 18 months now,” he added.

Indian merchant bankers which concentrate on mid-sized companies in tier-II and tier-III centres are keen to tap this. These companies are usually neglected by the bulge-bracket investment bankers. Bankers say in such a situation, a foreign listing, which can raise up to $10-15 mn, will be a godsend for these companies. It also opens the possibility of future fund raising at higher valuations.

India has been trying to get its own small companies market, the SME Exchange, up and running for several years but with little success. Many foreign stock exchanges are keen to fill this vacuum.

In another first, the Frankfurt Stock Exchange recently held a road show in Mumbai to woo Indian companies to list on it.

The exchange positioned itself as a prospective destination for Indian engineering firms.Friedland said exchanges such as Frankfurt, Toronto and the NYSE were the most likely destinations for Indian firms

Companies have to follow the holding company route, since direct listings in foreign bourses are not allowed under Indian laws. More than a dozen Indian companies, many in the energy segment, are already listed on the London Stock Exchange’s Alternative Investment Market.

India is also a hot destination for investment bankers looking at mid-size merger deals. Last month, around 250 of them, from 40 countries, were in Mumbai at a first-of-its kind speed networking conference. Bankers and advisors from a number of European countries such as Germany, Spain and Britain met entrepreneurs and promoters of mid-sized Indian companies.

i have warned consistently about dealing with chinese stocks and have been derided and criticised quite heavily for so doing, yet time after time my warnings have proved justified ...... here is yet another and frankly, i have no sympathy at all for any mugs who have been caught up

http://boards.fool.co.uk/geong-international-big-cash-trouble-in-little-12489505.aspx

.

Profits down badly... 5p on the cards.


GEONG expects to report significantly reduced profitability for the financial year ended 31 March 2012.

The company, as in previous years, had originally anticipated strong trading during the fourth quarter based on an expectation of receiving high margin performance fee revenues (where the operating costs have already been absorbed against the quarterly fixed revenues) on certain SaaS contracts.

Unfortunately these performance fees have been at a lower level than anticipated as the impact of the slowing economic growth in China has caused many of the key performance indicators set by the company's clients proving to be too optimistic with the result that the level of performance fees is greatly reduced.

In addition a long standing global delivery agreement with a major partner was anticipated to deliver significant revenues in the final quarter of the financial year. In the event, only a third of these anticipated IaaS contracts were delivered. This has been reviewed and it is believed to be a direct result of the uncertain global economic environment rather than the quality and appeal of the offering.

As a result of these factors, the directors now expect to report revenue materially below that recorded last year. In addition, since a proportion of the revenue shortfall related to performance fees, which achieve a higher margin, the operating profitability will be significantly reduced from last year's level.

GEONG will also incur a non-recurring charge to profits of approximately £350,000 from the aborted acquisition during the financial year. Despite the significant revenue shortfall in the final quarter, the company had cash of £5.3m at 31 March 2012.

Notwithstanding the reduced profitability the Board remains confident of its business model and its potential. The company is still getting new IaaS clients in its core markets and new industries with two strategic partners, and has not lost any IaaS clients during the quarter.

Its business partner has not moved any business to the company's competitors and the SaaS business gained two new clients during the final quarter of the financial year. A total of 16 SaaS clients were gained during the year and negotiations are taking place with another five potential SaaS clients.

post 373 to all you mugs!

Shares in GEONG International (GNG) crashed by 2p to 5.75p after the firm warned that a number of its top 10 clients may be adversely affected by the economic slowdown in China. The business software developer, noted plans of moving the latest version of its SaaS service onto a cloud computing platform, with its main goal for the year being to maintain revenues at 2011 levels, while improving the sales mix. The firm added that it had net cash of 2.2 million pounds as at 31st August 2012.

GEONG International Limited

("GEONG" or "the Company")

£2.5 million convertible unsecured loan stock ("CULS")

The Company announces that payment of the interest amount due on 31 December
2012 under the CULS was late as a result of unexpected delays in the granting
of approval by the State Administration Of Foreign Exchange of China ("SAFE")
for the transfer of funds. Payment, which was still being processed on the due
date, was made on 15 January 2013.

As a result of the late payment which represents a default under the terms of
the CULS, the holders, Hanafin Investments Limited ("Hanafin"), have requested
immediate repayment of the CULS. Whilst the Company has adequate resources to
make the repayment it will not be able to secure the necessary approvals from
SAFE to do so in the short term. Accordingly, the Company is seeking to reach
an understanding with Hanafin as to an acceptable and achievable timetable for
the repayment.

The Company retained £3.9 million in cash at 31 December 2012.

not another crooked chinese company - well i never! .... post 373 (jan 2012) says it all

Very crooked indeed. Now 1.5p.

Rare to see a post from you these days hlyeo! I seem to remember you were keen to short stocks.....hope you have followed this one down? Now might be the time to close! ;o)

Hi Harry, yeah I closed this at 3.5p - too early but I was afraid it was going bust.