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

50K bought at 67p earlier on is the reason - that was 3p ahead of the 64p offer price at the time! Made people sit up and take notice...

ST: This is my experience also and I'm doing likewise with SFT. I'ts just too good to be true and am wondering if there's a catch. I wonder for instance if the Chinese have the same committment to their shareholders as we do in the West?
sd.

Squidd, GNG's SP seems to be well supported by profitability and newsflow, so am not too worried. However, I am not about to pour huge amounts of money into China at the moment. Will cool my heels having just cleared out all my SOLA nd when I have completed my move back to the UK (Saturday) I will start looking at some UK companies. Some of Goldfinger's recommendations look quite interesting.

Am having a vauge idea about speculating on gold, too, since it's enjoying a good run. Cynic seems to be the man to talk to for that.

GNG finished off the day's highs, but with 650k shares traded, was above average active.

GNG Bid: 59p Offer: 62p Change: 4

ST: I have every confidence in the fundamentals and management at GNG but I feel uneasy about their communist masters. If GNG were to become a great success, they might be regarded as a strategic asset for nationalisation or else loaded with windfall taxes, and there are plenty of precedents around, particularly for foreign assets. It's an argument for sellling half at some stage and enjoying a free ride. Meanwhile I think you were right to sell SOLA, if for no other reason, it's harder to gear up production of wafers than say software at GNG.
I too, am attracted by GF's tips and am kicking myself for being deterred by the big spread on VML a couple of months ago.
My only gold is AVM - take a look.
sd.

ok then guys .... as requested please find the chart below ...... undoubtedly fantastic impetus and even a further rise today ...... surely this is defying all logic and gravity and rsi is well overbought ...... one thing is for sure, if sp starts to fall you are likely to have great trouble off-loading ....... as a parallel, you might want to look at SOLA's performance of late ...... i am already an orphan, so this one def not for me!

Exactly cynic, I considered GNG and have declined for those very reasons. Also, the current PER on current forecasts is now a little high.

cynic. Not a poster here. Can you please explain to a "novice" why the shares would be difficult to offload if the price started to fall?

because i think you will find the market is very small and MMs will either widen the spread or effectively refuse to take the shares except at a silly price ...... the price you "see" is really only an indicator not a "promise" to buy/sell at that level

Thanks for that cynic. I have learnt something. GNG are going well...beyond my wildest dreams. Best of luck to all holders.

a word to the wise ...... please please please set stop losses and/or take at least partial profit ...... no share in this world keeps going up (or down) in a straight line ..... present markets will be violently volatile at best and pundit consensus, who of course are often if not usually wrong, reckon south will be the prevailing direction.

Cynic (re your post #97), the attraction of this one is in the fundamentals. Profitable and winning business hand over fist; not surprising it's doing so well, although I admit that the China factor is stopping me from increasing my holding right now.

Cynic, you really can't compare GNG with SOLA. SOLA has risen from 140p to 600p recently. GNG is nowhere near that in percentage gain.

and so it should soul* ....... 98 - my comment is still valid; i highlighted SOLA merely as a comparative as to what happens when a rocket turns into a stick ....... meanwhile I try resolutely to sit on my hands

SOLA has not turned into a stick...just a bit of profit-taking. It will move up again.

but not today i think

SOLA is not doing too badly considering it made its AIM debut at 79p and reach 630p recently and it is 490p now.

was not the point i was making .... but give up

Cant beleive I didnt get in about 2 months ago when they were 32 p and i was so close to buying!

You will say this again in 2 months time, GD.