3SOF

News on CHID.OB: China Digital Communication Group Completes Initial Due Diligence on Shenzhen Zhuo Tong

Good news  If the company has the money or power to make acquisitions of this kind it sure is worth more than $29M 

fyi:
CHID: Completes Initial Due Diligence on Shenzhen Zhuo Tong
Monday , February 13, 2006 10:36 ET

China Digital Communication Group (CHID) announced that it has completed its initial due diligence on Shenzhen Zhuo Tong Power Supply Industry Co., Ltd., a specialty manufacturer and distributor of high-frequency power supply products to the global communications industry. China Digital found that Zhuo Tong has advanced, high-quality 3G power supply products, R&D expertise, global partnerships and an established customer base.

Changchun Zheng, CEO and Chairman of China Digital, stated, "In a short period of time, Zhuo Tong has become one of the leading developers and distributors of 3G power supply technologies in China. As a result of our due diligence, we believe Zhuo Tong's expertise in 3G power supply equipment technologies is synergistic with China Digital's new focus to acquire leading companies in the global electronic power resource sector. Zhuo Tong has a very good business operating record with strong marketing channels and revenues. We expect specializing in 3G power equipment can provide a tremendous platform for China Digital's future growth."

I was wondering if G's pick PTSC.OB could be a candidate for Pennies portfolio.

Chid on fuego!

What a beautiful close.

I started to get a little concerned. It is nice to see that they are capable of taking over another company but It is hard for me to see the synergies with CHID's business. I would like to know a little more about the deal with Zhuo Tong.

Are they paying in cash or are we being diluted? Is Zhuo Tong profitable or are we going to see earnings drop? Essential questions which I believe/hope would put more fuel to the bonfire if answered.

Until we get clarity we can only believe in the chart and even though I started to get concerned it seems like the deal makes sense.

Mike

Dilution   

http://biz.yahoo.com/iw/060215/0110043.html

but profitable

BREAKOUT!!! BREAKOUT!! BREAKOUT!!![/b]
That's what  i'm talking about.. Did you buy Julia?
That's a strong close right there   Goodluck Holders

Quote from: gmarc66 on February 12, 2006, 11:05:14 PM
Terlisa, you look so enthused about CHID ..Its on my radar. U think its going to have a nice run soon?

Supergeek, Supergeek...what am i going to do with you Better be good or i'm gonna put my voodoo hex on u...trust me, you don't want to mess with an Italian womans temper...lol, but,  i'm going to let u get away with that comment this time.  Next time i'm telling ur wife! ...then you can deal with her wrath, and i'm sure it won't be pretty...lol
Glad u made out on IMNR...darn i almost got into that too...too bad i didnt dive in..missed it.

Well, Terlisas making me keep an eye on CHID, his/her excitement is rubbing off on me.

goodluck to all

julia

Looking to add some more shares tomorrow ....for the 3rd time

just beautiful 
China Digital Communication Group Executes Agreement to Acquire Shenzhen Zhuo Tong
Wednesday February 15, 4:05 pm ET

Brings Unaudited Revenues of $5.4M and Unaudited Net Income of $1.9M to CHID

LOS ANGELES, CA and SHENZHEN, CHINA--(MARKET WIRE)--Feb 15, 2006 -- China Digital Communication Group ("China Digital") (OTC BB:CHID.OB - News), one of the fastest growing battery components manufacturers in China, announced today that it has entered into an agreement to acquire UPE (Far East) Limited ("UPE"), which operates through its wholly owned subsidiary company, Shenzhen Zhuo Tong Power Supply Industry Co., Ltd. ("Zhuo Tong"). Zhuo Tong is one of the leading power suppliers to the domestic market (China) and is a pioneer of third generation (3G) power supply technologies and equipment. In 2005, Zhuo Tong had unaudited revenues of $5.4 million USD, and unaudited net income of US$1.85 million. The closing of the acquisition is subject to various conditions, including the completion of an audit of Zhuo Tong's financial statements, the completion of financial due diligence on UPE and Zhuo Tong by China Digital and the receipt of customary consents, approvals and opinions.

Pursuant to the acquisition agreement, China Digital will acquire 100% of UPE in an all stock transaction valued at approximately US$11.1 million. China Digital will issue 18.5 million shares to the shareholders of UPE in exchange for all of the shares UPE. Upon completion of the acquisition, the shareholders of UPE will own approximately 25% of China Digital.

Changchun Zheng, CEO and Chairman of China Digital, stated, "The acquisition of Zhuo Tong is a pivotal step in transforming China Digital from a mobile phone components manufacturer into a 3G technology and equipment system provider. Zhuo Tong leads the 3G power supply market in China with an impressive customer base and technological intellectual property, and will be immediately accretive to our earnings. The combination of Zhuo Tong and our battery shell manufacturing subsidiary Shenzhen E'Jenie provides a synergistic platform to drive aggressive future growth."

Zhuo Tong provides power supply technology and equipment to China's "Big Four" -- China Mobile, China Unicom, China Telecom, and China Netcom. Zhuo Tong serves large-scale commercial and industrial telecommunication operators; electrical power supply system providers, electricity utilities and other ancillary service providers. Zhuo Tong is ISO9001 quality control certified; holds a TLC license for producing telecommunication equipment and components in China; and is a member of the Chinese Power Source Academic Society.

Thanks Oliver and bw.

I think this was released at the same time I was complaining about the lack of details on the deal 

It seems to be an excellent deal. CHID is buying Zhou Tong at a PE of 6, which really is a steal.

I will sit tight on my shares for the time being!

Michael

I've been looking and looking for more penny stocks with attractive fundamentals to buy and they seem so hard to find ... CHID seems to be of another league 

Profitable and making profitable acquisitions, immediately accretive to earnings.

After this deal is complete, CHID will be with a market cap of about $46M and annual earnings of about $4.8M, so the earnings multiple is still about 10 and growth is and will probably continue to be exponential.

I'll continue holding CHID.OB, I wonder if it will make it to the Nasdaq over the medium term, it sure deserves it (the stock needs to go over $1 for that - I believe that's the way going forward).

Still just 2 stocks on the Pennies on Fire Portfolio, and only one of them is truly a sound pick, I'll continue looking for more on the Penny Stock Picking Board.

fyi:
Stock Watch: Small Public Company Looks to Take Position in Chinese 3G Power Supply Market! February 16, 2006
Thursday , February 16, 2006 09:47 ET

WESTON, FL, Feb 16, 2006 (MARKET WIRE via COMTEX) -- Wall Street News Alert's "stocks to watch" this Thursday morning are: China Digital Communication Group (OTC BB: CHID), Cisco Systems, Inc. (NASDAQ: CSCO), Verizon Communications Inc. (NYSE: VZ), and Nokia (NYSE: NOK).

China Digital Communication Group (OTC BB: CHID) will likely get the attention of investors as the markets begin trading this morning. Yesterday after the stock markets closed, the company, one of the fastest growing battery components manufacturers in China, issued a press release announcing that it has entered into an agreement to acquire one of the leading power suppliers to the domestic market (China) and that is a pioneer of third generation (3G) power supply technologies and equipment.

The company is UPE (Far East) Limited ("UPE"), which operates through its wholly owned subsidiary company, Shenzhen Zhuo Tong Power Supply Industry Co., Ltd. ("Zhu Tong").

This is big news for China Digital and likely will appeal to investors! In 2005, Zhuo Tong had unaudited revenues of $5.4 million USD, and unaudited net income of US$1.85 million.

Wall Street News Alert is putting aggressive investors on high alert to continue watching this company! Changchun Zheng, CEO and Chairman of China Digital, stated, "The acquisition of Zhuo Tong is a pivotal step in transforming China Digital from a mobile phone components manufacturer into a 3G technology and equipment system provider. Zhuo Tong leads the 3G power supply market in China with an impressive customer base and technological intellectual property, and will be immediately accretive to our earnings. The combination of Zhuo Tong and our battery shell manufacturing subsidiary Shenzhen E'Jenie provides a synergistic platform to drive aggressive future growth."

Zhou Tong provides power supply technology and equipment to China's "Big Four" -- China Mobile, China Unicom, China Telecom, and China Netcom. Zhuo Tong serves large-scale commercial and industrial telecommunication operators; electrical power supply system providers, electricity utilities and other ancillary service providers. Zhuo Tong is ISO9001 quality control certified; holds a TLC license for producing telecommunication equipment and components in China; and is a member of the Chinese Power Source Academic Society.

Aggressive investors need to watch this company VERY closely! Pursuant to the acquisition agreement, China Digital will acquire 100% of UPE in an all stock transaction valued at approximately US$11.1 million. China Digital will issue 18.5 million shares to the shareholders of UPE in exchange for all of the shares UPE. Upon completion of the acquisition, the shareholders of UPE will own approximately 25% of China Digital. The closing of the acquisition is subject to various conditions, including the completion of an audit of Zhuo Tong's financial statements, the completion of financial due diligence on UPE and Zhuo Tong by China Digital and the receipt of customary consents, approvals and opinions.

Prior to yesterday's press release, the stock closed yesterday at Sixty-Four cents a share.

link:
http://www.knobias.com/individual/public/news.htm?eid=3.1.bd34b518e0cd5a64df3a8e0dff174dde258fb21a120ed91dd06b00df60039671

&

CHID LINK:

http://www.thenewssvc.com/CHID021506.html

enjoy the ride 


cheers
Oliver

consolidation after big run.... IMO

I agree la-onda, after a gap up traders are taking profits on CHID.OB. $0.58 was the previous high, so now it may provide support.

After the current consolidation the stock will probably continue to trend higher since its business is growing fast, through organic growth and acquisitions, and the price is attractive (an earnings multiple of about 10).

Although CHID.OB is a Chinese company, it provides all the information an investor may require, with all the SEC Forms filed on schedule. That's important to create investor awareness (for example, XING also seems to be a great investment, but it fails when providing information to the investor community).

For me CHID.OB should have a multiple of at least 30, so the price should triple to about $1.8.

I'll continue holding this penny stock.

Hi all,
We have a news:
http://biz.yahoo.com/e/060221/chid.ob8-k.html

"... China Digital will issue 18.5 million shares of its common stock..."
I'm not an expert in this field, but usually, new shares isn't good...
Any thoughts?