3SOF

Good God - even at a P/E of just 10, this should trade at $14-17
I guess you were right Michael -- this shouldnt see single digits again.

This will be a very interesting day, the results are extreme

In an earlier post I said I got stopped out a few days back, but stopped myself back in prior to earnings. I also at that time took a position in some Sept $12.50 calls for XING.
My expectation is that this will not be a 1 day rocket that returns to the launch pad, the results and guidance  and news (CECT IPO etc) is just too strong.

Good luck all

Quote from: AussieTrader on June 20, 2006, 09:49:31 AM

My expectation is that this will not be a 1 day rocket that returns to the launch pad, the results and guidance  and news (CECT IPO etc) is just too strong.
Good luck all

looks like it wants to a least fill the gap. dropping like a rock!

I am actually very surprised that sellers are in control, I would have thought that the buying pressure would have made the stock do this but in the opposite direction.   

Today's action was almost unbelievable....what the heck is going on?

Quote from: ygtrdr on June 20, 2006, 04:12:31 PM
Today's action was almost unbelievable....what the heck is going on?

Unbelievable is a very well chosen word. This is all about credibility most of the buyers in the morning saw a stock with 900% increase in earnings most sellers in the afternoon saw a stock that was a total scam.

So what is it?

Well I believe you are looking at a stock that grew earnings with 900% in 2005 and is going to continue growing earnings with at least 35% as they recently guided.

I have been holding XING for a long time and I remember when I first recommended the stock on 3SOF I had to do a lot of searches just to find a description of one of their handsets. Try to do a very simple search on Google for CECT A1000, which is their newest handset, and you will get 263.000 hits; most of them are in Chinese.

XING's products are a huge success in China. The company has basically within very short time gone from being a marginal player in the world largest and fastest growing mobile phone market to being one of the most popular and desired handset brands.

When I first wrote about XING I quoted the CEO:

Quote from: Michael on August 07, 2005, 10:13:17 AM
CECT is among the top 3 local brands in China and is gaining market share inside and outside China

The Chairman and CEO has recently said that:

QuoteAll in all, we expect sales revenue to increase 20% from US$244.0 million for 2004 to about US$280-300 million for 2005 and gross profit to increase by 40.0% from US$27.0 million for 2004 to US$36-38 million for 2005. Our target gross profit margin for the year 2005 is around 14% versus 11.1% for the year 2004

This was in August last year and their gross profit didn't come in at US$ 36-38 million in 2005 but US$ 60.6 million. This is unbelievable and that was exactly why you saw the reaction on the earning release today.

Most buyers in the morning had never heard about the stock 15 minutes before they bought it. When they tried to do some basic research they were met with a lot of Chinese websites and people who were shouting that XING is a scam.

Those of us who have followed every new order and every step up the market share ladder knows better!

Today was a great day for long-term investors on XING. The stock has gained more than 30% since we picked it for 3SOV less than one month ago. I believe that this is just the start. As Aussie said the results and guidance  and news (CECT IPO etc) is just too strong.


The next major news will be Q1 earnings, which should be as good if not better than 2005 earnings

In addition to earning a lot of money, XING also needs to earn the confidence of the investment community. But since I started to follow the stock they have reported better results than they have guided and that is a very good start!

Very volatile day for sure, but not out of character for XING if you look at some longer term history on its share price.
I agree with Michael's analysis on how traders / investors are looking at XING. If XING were an US company then with these type of results it would be trading somewhere crazy like $50, but the flip side to that is, hey we wouldn't be able to purchase shares at $10 or so (which if you were to fast forward 1 year will look like a steal).
I am coming to the conclusion that over the coming weeks / months XING will 'earn the confidence of the investment community' they have too much good news in the pipe. In the meantime though I think a bg short position is going to be built up again (by those who perhaps miistrust XING and see it as a scam of some sort - CHINA SCAM, CHINA ACCOUNTING DODGY etc) which will create a nice short squeeze trigger. I don't have the facts to back that up it is just my opinion, short position in May was 956K,June numbers when out will show this I guess.
Technically in the short term the chart got a bit ugly with the black candle and gap (daily chart) and it may try to fill that gap, I don't know, I would hope perhaps we get another 'hound of the baskervilles' and the gap becomes a runaway one. Weekly chart looks nice, MACD Histo only after today has crossed the zero line, RSI below 70. Thats a buy in my book.
I didn't sell any of my positions in XING (as I want to try and get the longer run)
My final conclusion is that I don't have enough XING in my port (be it stock or options / leaps). I will be looking to add to my position over the coming days (if I like the entry points). That will make me very overweight in XING ( I don't follow the 6.66% model port) I tend to use % of port at risk relative to stops and set my risk levels that way. I see less risk and much greater long term upside in holding a lot of XING, than holding a pot of stocks (especially in the current climate). I am not urging anyone to copy my approach here, these are jsut my thoughts and sharing my risk approach.

Good Trading

XING is looking good right now

I'm just wondering why 3SOF did not take back their position ....3SOF got stopped out but you can always get back & buy back the shares.. there is nothing wrong with that, right?

That's a nice set up going on with XING... creating a rounding bottom on the long-term chart.

Short-term chart is even more attractive (HEAVY VOLUME baby)

I too stopped out on this that meant I sold despite liking. In the current market I've been very reluctant to reinvest. I will see how this trades today and buy again on a pull backt to 9.5

This news release hasn't made it to English and I am not sure of how important it is to XING growth in China. It's taken from the National Development and Reform Commission website (Chinese). It seems HuiZhou Qiao Xing Telecom was awarded a cell phone manufacturing license by China central government. The details are limited so I can't see if this relates to 2G or 3G however to be awarded a licence by the government you have to have 1) The technology and processes in place (well we know they do) and 2) I guess good relationships with government departments (seems they do here also). This is not CECT it is HQZT.
Anyways I am no expert on those type of things, comments welcomed.

Here is Chinese link:
http://www.ndrc.gov.cn/gjscy/xxcy2/t20060616_73097.htm

Here is Translation:
National Development and Reform Commission approved Huizhou Qiaoxing Telecommunication Industrial Limited mobile communications terminals production projects
2006/06/16
--------------------------------------------------------------------------------------------------------------

Recently, the State Development and Reform Commission approved investment projects on the basis of enterprises and the relevant provisions of the "mobile communications systems and terminals investment projects approved by a number of provisions," according to transparent, scientific decision-making, management by seeking the views of industry and professional bodies to assess feasibility, Huizhou Qiaoxing Telecommunication Industrial Co. Ltd. approved consent mobile communications terminals for production projects.

Another days trading and we are almost back to the point where we started before the release of the outstanding figures for 2005. It is clear that the investors do not have much confidence in the reports and guidance from the company. As said repeatedly the company's reporting is horrendous for a business of this size. It seems management have realized this and will start semi annual reporting and quarterly release of key figures. This is a step in the right direction but still not good enough.

That is why it is so important to follow the other news sources that are out there like independent reports of CECT's market share, the products themselves, agreements with PALM and Microsoft, new licenses etc.. This information all point in one direction and that is that XING is a stellar business with very healthy growth.

But credibility is something you earn over time and XING still have a long way to go and in the meantime we will se these huge swings.

We almost closed the gap yesterday and I could easily see the gap closed today unless XING release Q1 figures. This might be an excellent entry point for the next leg up both for them who would like to hold XING long term and for those who are in to a quick swing trade 

3SOV is in for the long term so we will keep our trading plan, which has served us well until now.

hi,
here is some good news on xing
maxi

9:51AM Qiao Xing to release certain key financial data for 2006 Q1 next week and to provide more comprehensive quarterly financial reporting starting 2006 Q3 (XING) 10.43 +0.74 : Co announces it would release certain key financial data for the first quarter of 2006 next week and that starting from the third quarter of 2006 it would provide more comprehensive quarterly financial reporting. Quarterly reporting starting from 2006 Q3, like half- yearly reporting starting from 2006 H1, will consist of a consolidated balance sheet and a consolidated income statement with information about earnings per share. Wu Rui Lin, Chairman of XING, said, ''We constantly seek ways to improve on our communication with the investor community, for which 'transparency' is our watchword.''

XING are looking to win that investor confidence for sure

XING releases that licence news in English and gives good details on its $ impact

-- XING expects a 35% increase in sales revenue for the Group's mobile phone
business segment for 2006 compared with 2005 --


HUIZHOU, Guandong, China, June 22 /Xinhua-PRNewswire/ -- Qiao Xing Universal
Telephone, Inc. (Nasdaq: XING) today announced that its subsidiary, Huizhou Qiao
Xing Communication Industry, Ltd. (HZQXCI), had recently received from the
National Development and Reform Commission of China a manufacturing license for
mobile communication terminal products.  The last impediment to XING's dual
brand mobile phone strategy is now cleared.

Mr. Wu Zhi Zhong, CEO of HZQXCI, said, ''With this license, unrelated to that
held by CEC Telecom Co., Ltd. (CECT), another of XING's subsidiaries, comes
freedom of action in the development of HZQXCI's mobile phone business. We plan
to announce in the upcoming press conference in China the launch of 20 new
models of 'COSUN'-brand mobile phone handsets through our
well-established distribution network in the China market.  We expect revenue
from the sale of 'COSUN'-brand handsets for 2006 to double that for 2005.''

Mr. Wu Rui Lin, Chairman of XING, said, ''The overall arrangement for
our Group's mobile phone handset business is this: CECT focuses on R&D,
production and sales of higher-end products, while HZQXCI develops and sells
lower-end and middle-end products.  HZQXCI also exports through
overseas telecommunication operators and telecommunication terminal retailers
such as Wal-Mart.  We are currently shipping the USD35 million's worth of orders
that we received some time ago from overseas mobile phone operators.  The
Group's production of mobile phone handsets is located at Huizhou in the
Province of Guangdong.  Huizhou is one of the most important sites in China for
the manufacturing of consumer electronics products.  It benefits from the
presence of a large number of suppliers, a large pool of skilled and
productive workforce, and a regulatory environment favourable to business that
the local government provides.

''Both CECT and HZQXCI will continue to emphasize on R&D, from which marketable
product innovations flow.  CECT has already developed its own 3G mobile phone
products and HZQXCI is now cooperating with a major player in the field to
develop chips for its 3G mobile phone products.

''XING has been making steady progress towards our medium-term goal of becoming
one of the leading local players in the mobile phone handset market in China. We
anticipate significant growth in sales revenue of above 35% for the mobile phone
handset business in our Group for 2006 compared with 2005.''

The last couple of weeks have been a great study of investor psychology. People have gone from euphoria to despair within hours. I am sure that a lot of investors have bought expensive and sold cheap during the big swings. I found this one on investor psychology:



We are now entering into the chasing phase where the investors who know the value of XING but were stopped out or were scared into selling their shares during the large drops will have to chase the stock higher.

XING's fundamental value has always been there for everybody to see but Friday we got some more confirmation (sorry for the translation!!!):

Quote
TCL Desai opening Qiaoxing crowned as "the most valued brands in China 500" alternate   

Published Time : 2006-06-23 10:35:50 Source :   
 
The (reporter Fuhaiyan Correspondents Ho) 2006, "China's most valued brands 500" list recently published, our TCL, Qiaoxing, primitive, Desai respectively to 31.76 billion yuan, 3.145 billion yuan, 2.536 billion yuan and 2.395 billion yuan reelected China 500 most value brands, which included ranked No. 18. Haier continue to 63.989 billion yuan rates top.

As a key support of our large enterprise, TCL, Desai, opening, Qiaoxing four major groups in recent years actively implement the municipal party committee and government of the "brand-name strategy" deployment, formulated in line with enterprise development brand management strategy, in the brand-building results. It is understood that the "500 most Chinese brand value" by the world's top brand research institutions -- the World brand laboratory to conduct a comprehensive scientific assessment of China's brand marks. The total electrical household appliances, food beverages, textiles and clothing, 52 media industry language, which for the most successful brands of food beverage industries, a total of 61 brands selected, accounting for 12.2%. Geographical distribution, Beijing (16.8%), Canton (16.6%), Shanghai (10.0%) continued to rank in top. 

The Chinese Yuan is 0.125 to the dollar. So the value of CECT's brand is 393 million USD. XING's market cap is 185 million USD.

We still think XING has a long way to go. They earned 1.44USD in 2005 and have promised 35% earning growth the next 5 years. Using these figures to calculate EPS in 2010 we get 6.45(ignoring dilution!). The theory says that a stock is trading at fair value when the PEG is 1, which in this case means that the PE should be 35. Fair value in 2010 is therefore 226 USD per share. Mind bubbling figure 

We are planning to hold for the long run safe of any fundamental changes. We might however sell a few shares when we cross 70 

Lets finished with a long term chart of XING. this strip out a lot of the noise that they big swings is causing! Last time we had this kind of volume the stock ran from around 11 to around 70. That was during the IT buble in 2000 so there probably was not much fundamental back up. We are not saying this will happen again within the next weeks but I do truly believe the stock has the fundamentals to trade at 70 in the coming years.