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

and up some more: GNG Bid: 33p Offer: 35p Change: 3.25 1.3 million traded today.

And even better progress today: GNG Bid: 38.5p Offer: 41p Change: 5.75

The SP has set a new all-time high of 40p. 350k traded so far.

Kicking myself that I sold 20k of these before the rise-I thought I had time to buy elsewhere and come back later! still hold 13000 so must be happy with that for now-JTCod on the other side bought 300000 shares yesterday triggering the rise and it looks as though his admirers are following him in. Very promising investment this one. lots of new contracts.

Thanks for that update, MP. haven't had time to take a look at the other side recently (am in the throes of leaving the country, so am a bit busy, to say the least), but it's interesting that JT is backing this so strongly. I'm definitely chuffed with the fact that GN keeps winning new orders.

Another nice climb to start the week: GNG Bid: 39p Offer: 42p Change: 3.75

202k traded

Not a bad start to this week either soul traders! Now 43p mid. Not many of us here yet, so nice and quiet too - wait till the wider market catches on.

FYI I've had it confirmed by Henry Tse that I'm right about why GNG were able to issue a trading statement for the year so early. The major revenue contribution this year is still PortalAge related projects, for which there are signed contracts and a sales pipeline, and these have enabled GNG to look ahead as announced in October.

It's now up to others to finally pick up on the hidden message here.

I'm particularly interested to find out if the trading statement from October may have been superceded, with all the additional PortalAge contract wins since then and SmartBox seemingly doing really well - if so forecasts may have to be lifted. We shall see.

Good stuff, Riv.

I have to say that this one seems to be full of nice surprises. 44p to buy is a new all-time high as well.

GNG Bid: 42p Offer: 44p Change: 5

IMO the markets are only just waking up to this one---the future chinese microsoft is what I'm hearing!! Good trading statements so the next results should send it sharply up -fingers crossed.

I certainly have no complaints! Except perhaps that maybe I should have bought a few more shares already! Will have to give that some thought . . .

Still movin' on up. Only 3,000 shares seem to have been traded, but hey, if today's rise sticks, that'll be five days of rising SP on the trot.

GNG Bid: 44p Offer: 47p Change: 1

47p is yet another new high, too.

Moneyplus, that's a great line - "the future Chinese Microsoft"! Where did you hear that - down the Dog and Duck?! Or are you really hearing good things, and if so where?

......or did you hear it from a Seymour Pierce analyst?! Good news tonight - Seymour Pierce have started coverage of GNG with an "outperform" rating (and that must be at this morning's 44.5p price) - in traditional brokerspeak that means that when GNG come out with their 31/3 results they can say "I told you so" and upgrade to Buy...


http://www.newratings.com/analyst_news/article_1480819.html

"Geong International initiated with "outperform"

Thursday, February 22, 2007 8:51:50 AM ET
Seymour Pierce

LONDON, February 22 (newratings.com) - Analyst Amit Thakkar of Seymour Pierce initiates coverage of Geong International Ltd (ticker: G2Z) with an "outperform" rating.

In a research note published this morning, the analyst mentions that the Enterprise Content Management (ECM) market in China, to which the company caters, is expected to grow at a CAGR of at least 50% going forward. Geong International has a client base of 50 large enterprises, to which it provides PortalAge and SmartBOX products, the analyst says. The company is expected to achieve 25% annual earnings growth over the next couple of years, Seymour Pierce adds."

Blooming marvellous: GNG Bid: 50p Offer: 53p Change: 5.5

GNG is deemed favourably to be the 'Microsoft' of China. Thanks for the above update, rivaldo.

Yep - thanks Riv! Yours truly is now up a very healthy 50%.

Great start! thank you seymour p.

Ta everyone. Some analysis of the new note if I may...

GNG made 2.6p EPS last year. Seymour Pierce say 25% annual earnings growth over the next two years. So for the year about to finish on 31/3 I assume they go for 3.25p EPS.

For what will soon be the current year we can assume 4.1p EPS, and forward from that say 5.1p EPS.

I'd expect a new broker to be cautious with their initial estimates to leave plenty of room for upgrades. But even on those estimates, at 48.5p GNG are on a forward P/E of just 9.5.

And that's without taking the near 2m of tangible assets into account on the 12.7m m/cap. And the PEG at 0.47 is demonstration enough of the value here.

GNG could be at 80p pretty quickly given that that would still be a forward P/E of only 15.7. With room for upgrades if Seymour Pierce's 31/3/07 forecasts are beaten.

Time to top up further, Rivaldo?

Of course

Certainly very impressive after doing some research on Geong...STRONG BUY at 50p.

22/2/2007 - Seymour Pierce upgrades its annual earnings growth.
6/2/2007 - Signed two contracts with China Asset Management Company ("ChinaAMC") one of the biggest mutual fund companies in China.
6/2/2007 Contract win - Haitong Securities ("HTS"), the number one securities firm in the PRC.
29/1/2007 Contract win - China Construction Bank (CCB).
29/1/2007 Contract win - FAW Volkswagen.
29/1/2007 Signed an extension to its maintenance agreement with Shanghai General Motors (SGM).
28/11/2006 - Geong named in Deloitte Technology Fast 50 China.
24/11/2006 - Signed 2 agreements IBM Global Business Service to provide its PortalAge based solutions to Motorola China Electronics.
21/11/2006 - Signed an agreement with China's Bank of Communication ("BCOMM").
18/10/2006 - Signed an agreement with IBM Global Business Service ("IBM GBS") to provide its PortalAge based solutions to Air China ("Air China").

23/6/2006 - Admitted to AIM at 30p per share. Its flagship product
GEONG PortalAge is used by the top-five Chinese banks and 12 of the top-20 securities firms in China.
31/3/2006 - Sales in the year ended 31 March 2006 were $5.48m and the operating profit was $1.36m.