3SOF

Universal Travel Group Appoints New DirectorLast update: 12/10/2007 8:48:08 AM

James Treacy Joins UTVG's Board NEW YORK & SHENZHEN, China, Dec 10, 2007 (BUSINESS WIRE) -- Universal Travel Group (UTVG), a fast growing travel services provider in China specializing in packaged tours, air ticketing, hotel reservation and air cargo transportation, announced today the appointment of James Treacy as an independent board of director for UTVG. Treacy brings more than 20 years of experience with public companies. In 1994, he joined TMP Worldwide, now Monster Worldwide, as chief executive officer of the company's Recruitment Advertising Division. Treacy played an integral role in the acquisition of Monster.com in 1995 and the creation of the corporate cross-selling strategy known as "Feeding the Monster." In 1998, Monster appointed Treacy as executive vice president, COO and to its board of directors. He became company president and COO in November 2001, serving in those roles until his resignation in 2002. During his tenure, Monster became a member of the S&P 500, the NASDAQ 100 and the Fortune e-50. Prior to Monster, Treacy was a senior vice president with WPP, USA. He was also with The Ogilvy Group and before that was with Texaco, Inc. Treacy served on the board of publicly-listed eBookers Public Limited Company, which was sold to Cendant (now part of Travelport), in 2005. From March 2006 until March 2007, he served as a director on the board of Dice Holdings, Inc. as it prepared for its June 2007 IPO. Currently, Treacy serves on the President's Council of Valley Hospital and is an angel investor in several early stage Internet companies. He works in a private business as well as in an investor consultancy capacity. Chairman and Chief Executive Officer Jiangping Jiang said, "We are pleased to welcome Jim to the board and feel that his industry knowledge and keen understanding of the Internet as a marketing tool will help Universal Travel to reach new levels of growth and bring greater return to our shareholders."

Thanks for posting the news Aussie

• Universal Travel Group Appoints New Director
Business Wire (Mon 8:48am)

As Tokyopua once said, "nice pedigree"

UTVG is bringing in people to increase its credibility and hopefully that will lead to improved levels of trust and a higher valuation for the company.

UTVG.OB is a Chinese tourism company. One of the things people do when they have some more money is travel. In macroeconomic terms I believe investing in tourism in China is a good option.

In microeconomic terms, I believe the company is real and its business definitely is not selling shares (like many others outthere). It is profitable and growing fast.

The 50% plus drawdown tells me nothing more than the April - May drawdown did. That is, I believe UTVG.OB will be between $8 and $10 in 6 - 12 months time.

UTVG.OB is one of my riskiest plays, and I'm 44% in the red holding this one.

But, as I wrote in my latest update, I believe we're in a similar situation to the April - June period, when UTVG.OB also fell 50% plus from top to bottom, even though fundamentals kept improving.

From the June bottom to the October high, UTVG rose 257.5%. If the same thing happens now, in about five months UTVG will be at $9.83.

I have this expectation not just because of this stock's historical patterns, but because fundamentals are supportive of my view. I see $0.49 EPS in 2008 and UTVG, probably one of the fastest growing companies in the market, should be awarded at least a 20 times earnings multiple.

I'll keep holding UTVG.OB for the long term.

Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

Quote from: tokyopua on December 20, 2007, 03:40:58 PM
Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

You show a lot of patience before buying and a great ability for timing Tokyopua. I hope you're right on this one too.

The SMA you're talking about is the 200 days SMA, not the 50. As you say it stands at $2.82 and ever since it was possible to calculate it, UTVG.OB never closed below that line. I hope we don't get a first now.

As always the biggest worry when it comes to OTCBB stocks is dilution. The company can be lying or trying to entice buyers so it can unload shares to them. But, insiders own 34.5% of UTVG's shares and, at least on paper, the company is profitable and has enough cash to fund operations. It has nothing to do with an ONT, for example, which is not OTCBB but was pumped and dumped anyway. And that was obvious for anyone studying the financial statements.

I can't believe I'm losing 47% on this stock ... if I have to take the loss lower than this it will be the Main's largest loss ever. Perhaps that would make me learn not to touch OTCBB stocks ever again.

Anyway, as it is now, I see the current situation as a "normal" 50% drawdown that should be bought, not sold.

I'll continue holding UTVG.OB.

Quote from: tokyopua on December 20, 2007, 03:40:58 PM
Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

You did it again Tokyo, nice 7.7% jump on Monday

There was a small gap left open between $3.12 and $3.18, but gaps aren't always closed ... It looks like the stock is forming a double bottom pattern, which would only be confirmed with a close above $3.93.

In Q3 2007 UTVG.OB earned 9 cents per share and given its guidance for the full year I expect 8 cents per share in Q4 2007 (also because Q3 is seasonally the strongest quarter). I guess the base for UTVG.OB is now something like $0.34 EPS for a full 12 month period. So, my 2008 EPS estimate of $0.49 means 44% growth from this base. I believe this is highly achievable, given the historical growth rates of the companies UTVG.OB has been acquiring.

With $0.49 EPS in full year 2008 I see UTVG.OB trading at about $10 late in the year, which would represent about a 200% gain from Monday's close.

I'll keep holding UTVG.OB for the long term.

Quote from: David Randolph on December 26, 2007, 06:07:20 AM

Quote from: tokyopua on December 20, 2007, 03:40:58 PM
Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

You did it again Tokyo, nice 7.7% jump on Monday

Thanks David, it has been a good buy in the first few days, that is always nice.  Thanks for catching my mistake on calling the 200 SMA the 50 SMA.  The stock price might still go down to the 200SMA, but since it did not last time it got close, and just looking at the chart I felt like I might not get another chance since the chart showed a horizontal support and the 200 SMA nearby.  Anyway, its nice when sometimes the technicals line up to give a good buy on an undervalued stock, its not always the case though.

In the meantime, looks like some news was out:

----------------------------
Universal Travel Group Filed 8-K/A on Recently Acquired Foshan Overseas

Dec 26, 2007 09:10:01 (ET)


NEW YORK CITY & SHENZHEN, China, Dec 26, 2007 (BUSINESS WIRE) -- Universal Travel Group (UTVG, Trade ), a fast growing travel services provider in China specializing in packaged tours, air ticketing, hotel reservation and air cargo transportation, today announced the company has filed an 8-K/A with the U.S. Securities and Exchange Commission. The filing includes the financial statements of Foshan Overseas International for the years ended December 31, 2006 and December 31, 2005 and the periods ended September 30, 2007 and September 30, 2006. The filing also includes pro-forma financial information for the years ended December 31, 2006 and 2005 and the periods ended September 30, 2007 and 2006.

-------------------------------------------

But it didnt say what the filing contained...

Mystery? author, but interesting anyway because 3SoF has 2 of the holdings talked about and I hold Fushi and have been writing some and trying to get it moved out of penny stock board. Is Giovanni di Maggio a 3SoF member?

Four Chinese Stock Picks: It Ain't Over Yet
posted on: December 27, 2007 | about stocks: FSIN / HRBN / SDTH / UTVG.OB     Print Email
China stocks are overbought; a dangerous bubble is forming; sooner or later this market will crash..

That's what we hear again and again. So is there no fairly or undervalued stock left in China? Should we stop buying and start selling? I don't think so.

What we should do is what we have always done when looking for value stocks:

Look at the story, check the fundamentals, try to understand what will happen in the near future.


There is huge growth potential in China's national economy but there is also something beyond the mainland boom: China is going global. Dalian based Fushi International Inc. (FSIN), China's biggest maker of copper clad wires used in a variety of telecommunication, automotive, utility and other industrial products, acquired their former U.S competitor Copperweld Bimetallics LLC in October. Just one month later they announced intent to invest $3.2 million in new machinery for their Copperweld facility in Fayetteville, Tennessee.

Notwithstanding the significant growth of its share price from $5 to $23 this stock is fundamentally not overbought. With ttm net earnings of $ 25.614 million and 25.17M O/S, the ttm EPS is $1.02 and the actual P/E is about 22.6, not high if you consider many Chinese tech stocks trading at 40 P/E. But more importantly, this company has shown a healthy growth each quarter and boasts a very attractive PEG ratio of 0.72 and a 2008 forward P/E of just 14.60.


Harbin Electric (HRBN), China's biggest and market dominating producer of linear motors, a specialty ranging from micro motors used in cars and medium sized motors used in power saving oil pumps up to maglev drives, has R&D agreements with Chinese and UK universities. The company had revenues of $23.64M in 2005, 40.42M in 2006 and 48.13M during the past 4 quarters with a net profit margin of 33.4%. With ttm EPS of $1.11 the stock's P/E is actually around 23 and its future appears bright.

Dutton Associates expects 2008 revenues of $118 million, rising to $220 million in 2009, with EPS of $1.78 and $3.16 respectively. Thus forward P/E for 2008 is just about 14.6 and for 2009 is about 8.2. A lot of room for further growth.


Another runner is ShengdaTech Inc. (SDTH), a leading producer of nano precipitated calcium carbonate [NPCC] and other chemical specialties. NPCC is used worldwide as a filler for tires, paints and other industrial products and the company has several patents for their method to produce these ultra fine particles. For the first time in 2006 the company reported revenues of $72.6M.

According to Yahoo the 2007 EPS is expected at $0.49 and the estimate for 2008 is $0.64, yielding a P/E of about 27 now and a forward P/E of 20. But chances are high that we will see a stronger earnings growth.

The Yahoo estimate is based on an EPS growth of 30% YoY (0.64/0.49), but for the past two quarters SDTH has shown an average YoY EPS growth of more than 50%. The company increased production capacity significantly during the first half of 2007 which makes a higher top line growth very probable. At the same time productivity (operating and net profit margin) increased continuously QoQ, so the bottom line should grow even faster. The operating margin increased from 22% in Q2/06 to 31% in Q3/2007 while the net profit margin increased from 22% to 29%. These numbers indicate that the Yahoo estimate may be overly conservative.

As Chinese become wealthier they want to travel more. This is the market where Universal Travel Group (UTVG.OB) is prospering through acquisitions and growth of its core business. The company started with revenues of about $10M in 2006 and shows impressive growth of revenue and net earnings. For Q3/2007 UTVG posted revenues of $12.8M, more than for the entire FY 2006 and 82% more than in Q2. Less than half of the revenue is due to the two acquisitions made in Q3, also the core business grew about 23% QoQ. The acquisitions have been immediately accretive and have cost investors extremely little in terms of dilution: O/S increased only 2.5% between Q2 and Q3 while the acquired companies contributed about 42% to the Q3 revenues. This is a sign of very smart, efficient and shareholder-friendly management. The stock dropped recently from its high of $5.72 down to below $3 thus offering a nice chance to get in relatively cheap. Even at $3.50 this stock is an attractive buy with a ttm P/E of 20.6 and a forward P/E (2008) of only 8.3. The strong growth expectation is also reflected in the low PEG ratio of 0.48. While the first three stocks appear to be more or less correctly valued for the time being with healthy upward potential, I expect UTVG to show a stronger pps increase during the next 6 months. Certainly the travel business will be strong around and during the Chinese Olympics so the previous all time high of $5.72 should be overtaken not later than March 2008 when the FY 2007 numbers will reveal ongoing strong growth of top and bottom line.

Disclosure: Author has a long position in some of the above-mentioned

nice year end price action to push the Portfolio performance above 28.91%   

Quote from: la-onda on December 28, 2007, 10:23:12 PM
nice year end price action to push the Portfolio performance above 28.91%   

You are right about that La-onda! 

I have to admit that the action today felt almost like fate trying to help David reach his goal of 30%, I mean ASTI and SDTH just ROCKED today!  Especially ASTI taking off like a race horse on a gallon of steroids starting around 3 PM, its like it woke up and said "wait, David needs to make 30%!"    I see ASTI is up 3.36% after hours, SDTH was up 1.12% after hours, so that probably makes the performance closer to 29.5% and hey, Im cool with rounding to 30! 

Congratulations David on reaching your goal, and Happy New Year! 

QuoteIn the meantime, looks like some news was out:

• Universal Travel Group Filed 8-K/A on Recently Acquired Foshan Overseas
Business Wire (Wed, Dec 26)

QuoteBut it didnt say what the filing contained...

Here's the 8-K for Foshan Overseas International Travel Service Co. Ltd.

Foshan was acquired for $6.5 M. In the Foshan acquisition press release, UTVG disclosed the following:

«For the first nine months of fiscal 2007, Foshan reported unaudited sales revenues of approximately $10.6 million with a net income of approximately $970,000.»

The actual numbers constant in the financial statements were slightly different: sales were $10.34 million and net income was $953,011. Not meaningful differences though.

QuoteMystery? author, but interesting anyway because 3SoF has 2 of the holdings talked about and I hold Fushi and have been writing some and trying to get it moved out of penny stock board. Is Giovanni di Maggio a 3SoF member?

I don't think so BigSully1, but I agree with his views, especially on UTVG.OB.

Quote from: tokyopua on December 29, 2007, 04:18:26 AM

Quote from: la-onda on December 28, 2007, 10:23:12 PM
nice year end price action to push the Portfolio performance above 28.91%   

You are right about that La-onda! 

I have to admit that the action today felt almost like fate trying to help David reach his goal of 30%, I mean ASTI and SDTH just ROCKED today!  Especially ASTI taking off like a race horse on a gallon of steroids starting around 3 PM, its like it woke up and said "wait, David needs to make 30%!"    I see ASTI is up 3.36% after hours, SDTH was up 1.12% after hours, so that probably makes the performance closer to 29.5% and hey, Im cool with rounding to 30! 

Congratulations David on reaching your goal, and Happy New Year! 

hehe, there's still one session to go and 30% is within reach, I have my fingers crossed

Thanks La-onda and Tokyopua, Happy New Year!

(I'll continue holding UTVG.OB for the long term).

Heh, forgot there was one more day lol.  Well, looks like the final performance is 28%, and that is still very good! 

UTVG is looking good too, I have been studying it a bit more and it seems like their logistics operations are similar to what UPS does.  Of course, there is more room for growth in that area in China, in fact UPS has been working hard to expand there.  Would be awesome if UTVG turned into the UPS of China over the years.  Unlikely, but its fun to hope!  Anyway, point is they arent just a travel company, and there is a lot of potential in their various acquisitions.

QuoteUTVG is looking good too, I have been studying it a bit more and it seems like their logistics operations are similar to what UPS does.  Of course, there is more room for growth in that area in China, in fact UPS has been working hard to expand there.  Would be awesome if UTVG turned into the UPS of China over the years.  Unlikely, but its fun to hope!  Anyway, point is they arent just a travel company, and there is a lot of potential in their various acquisitions.

You're talking about Speedy Dragon, right? Here's some more information about that subsidiary at  UTVG's website.

Technically UTVG.OB came off to close the gap at $3.12. I expect the trading range between $2.75 and $3.93 to ultimately be broken out on the upside, because I see UTVG.OB earning $0.49 per share in 2008 and it should trade at least at a multiple of 15 times earnings.

I'll keep holding UTVG.OB for the long term.

Good bounce from the 200 days SMA. We're in a battle between the 200 days SMA support and the 50 days SMA resistance. I expect the longer term moving average to win.