CHINA

[vic666]

sleep well David..you sure must be extremely busy with several things to do - trading, administering the site, replying to all of us so patiently. Man, you sure work hard! 

lemme tell you...You (and ur team) are doing one fantastic job! 

[july1]

Well I kept all my shares ...did you get scared tell me why the sale. Just one correction and you bailout. What is the thinking behind this..looks like bad decision.

John

[Melf Elf]

Well I kept all my shares ...did you get scared tell me why the sale. Just one correction and you bailout. What is the thinking behind this..looks like bad decision.

John,

I see that this is your first post, so Welcome to 3SOF.

Whether you agree or not, and you obviously don't since you've held your shares, David gave very clear reasons why he sold CHINA, if you read his last message.

We probably all have a different opinion about where to buy and sell stocks,  Sometimes they go up after we sell; sometimes they go down after we sell.

CHINA has gone up since the open, which is great since you're still holding, but "what if" it had gone down?

David isn't always going to "be right," nor will any of us always "be right."  And, we don't even look at it that way.  Everyone has a different opinion, and we all try to play the market the best way that we can, and try to share our ideas, and help each other out. 

But, everyone makes different decisions.

You don't agree with David on his selling of CHINA, and that's perfectly fine.  But, please understand that he can't possibly explain his decisions to everyone's individual satisfaction.

David gave his reasons for selling, and since you've decided to continue holding CHINA, I know that David and everyone else at 3SOF wishes you good luck.

Again, welcome to 3SOF!

[rickjust]

hi,
i also kept my shares and was contemplating buying more at the low to sort of average down but i didn't ,i had a feeling it would bounce back today because of the lower open and i gave myself a little more wiggle room on my stop loss. but it is now over 9.
even though david makes the decisions for 3sof you still have to make your own and wear the consequences . right or wrong doesn't really matter , we just speculate on the information we have available wether tech or fundamental and act on that.
in the end he didn't make a bad decision or a good one just a decision based on what he saw. his portfolio is at 250% because he trades well and protects capital.
i am sure david would love to see this fly for us still holding this stock,
thanks,
maxi
p.s. would love to see it hold 9

[july1]

Hi,
It seems i did not see why the reasoning for the sale please post the reason, because before the sale it was keep CHINA it has good long and short term.
Which is what i thought we were doing. Is this stock all of the sudden a poor choice to keep?

John

[David Randolph]

Hi,
It seems i did not see why the reasoning for the sale please post the reason, because before the sale it was keep CHINA it has good long and short term.
Which is what i thought we were doing. Is this stock all of the sudden a poor choice to keep?

John

I don't understand John, you didn't read my update or you disagree with the analysis and selling decision? My update is on the previous page of this thread, or else click here.

When I saw the stock opening with a down gap I suspected it would make an intraday recovery, but I don't see it running to $10 plus anymore. All the data is in, and with it, the stock looks fully valued. If there's a slight miss of its internal estimates it will tumble.

At first I saw it as a good long term holding, but with time I learned more and I don't think CHINA is attractive anymore.

But, of course, I hope everybody at 3 Stocks gets a good profit in it (3 SOF Portfolio made 20%). I hope I'm wrong. Good luck

[David Randolph]

Strange, the link isn't going to the right place, here's the quote from the analysis on page 5 of this thread:

There are flaws on my previous analysis. If revenue growth is just 25% for the next 10 years, EPS growth could never be 40%, it would be less. Why?

Because a $8.39 EPS translates into a $945 M net income in 2016, on just $2.8 B in revenues. That would be a 34% net profit margin, and that's impossible. The current net profit margin is just 5%.

So, let's go back a little. Say revenues grow 25% a year for the next 10 years, so revenues would be $2.8 B in 2016. Now apply a 5% net income margin and get $140 M in net income. This translates into an EPS of $1.24, multiplied by a 16 earnings multiple gives me $19.88 for the share price.

This means the stock's price average annual growth would be $8.55*(x^10) = $19.88 <=> x = 8.81%.

So, according to these estimates, buying CHINA now and holding for the next 10 years will deliver an average annual profit of only 8.88%.

That's not enough, but it is quite realistic. I guess the necessity is making me push harder on fundamental analysis. I have a 21% profit on CHINA, and a 10% loss on another stock I'll probably let go.

I'll take that profit, so the trading plan is to SELL CHINA around tomorrow's open !

It was a though decision.

[tokyopua]

Agreed with David and Melf on their points.  CHINA could have gone the other way like EGHT did recently, and it is prudent to take profits while they are to be had when the chart and fundamentals dictate. 

I will also add, the resulting opened position from selling CHINA and ASPV accomodated the addition of another Randolph Rocket, namely BFLY, which is currently up 7.3% on spectacular volume with room to run again higher.  Together with GOAM being up 17% today, 6 other 3SOF picks and NMKT, my portfolio is up 4.3% at the moment, so CHINA has become a distant memory.  Like David said a long time ago, sometimes stocks are like oranges, you squeeze the juice out of them and move on.

All this being said, best of luck to all fellow traders still holding, may CHINA rock on to new highs!

[poorknight]

Hi :  Very new here.  Enjoying the site and discussions.

Have to also say that I did not see the info on why CHINA was a sell so was confused for a while.

Poorknight

[njshiva]

CDC Soars on Analyst Initiations
Thursday December 28, 3:08 pm ET 
CDC Shares Rise After 2 Analysts Initiate Coverage With Bullish Ratings


AP (AP) -- -- Shares of CDC Corp. rose roughly 10 percent Thursday after two analysts initiated coverage of the Hong Kong-based software maker with positive ratings.
CDC shares rose 88 cents, or 10.5 percent, to $9.27 in afternoon trading on the Nasdaq. They have ranged between $3.07 and $9.58 over the past year.



Raymond James & Associates analyst Mike Latimore on Wednesday began coverage of CDC with an "Outperform" rating. In a note, he said the company is uniquely positioned to take advantage of Asia's growing internet services market.

"CDC is in the enviable position of having leading technology ... in the small and mid-sized business markets while competitors are going through the distractions of acquisitions," wrote Latimore.

The analyst set a 12-month target price of $12, and projected 2007 earnings of 48 cents per share.

Oppenheimer analyst A. Sasa Zorovic on Thursday started coverage of CDC with a "Buy" rating and a $12 target price.

Zorovic predicted that in the first half of 2007 CDC will spin off each of its main business units into three seperately trading entities: CDC Software, CDC Games, and China.com, the company's news and information web portal.

"While we are bullish on all three lines of business by themselves, we do not see a compelling reason for all of them to trade as a single security," Zorovic states.

Zorovic set earnings-per-share estimates of 52 cents for 2007 and 61 cents for 2008.

[njshiva]

I am going to take a position in china today. Some  I feel this wont stay below 10 for long. 

[kpunarc]

I think you're right. I just sold this on Dec. 23 and now really frustrated with myself. And now I can't even take a position because i'm fully invested. 

Supposedly, it's valued ~$14-$16 with all three of its sub-companies and should be worth more with the anticipated growth. I just read that somewhere so I really don't know WHY it is. I'm do a lot of TA. I don't know much about FA though so you may want to do your own DD. Anywho...good luck to ya!

[kpunarc]

Even though i'm tearing myself apart from the China sell, I still decided to keep AOB. If you're interested in the China plays, go ahead and check out AOB and see what you think.

[setravis]

Press Release Source: CDC Corporation


CDC Corporation Files Second Lawsuit Against Mgame in Korea
Friday October 19, 8:34 am ET 
CDC Games Clarifies Payment History with Mgame


BEIJING--(BUSINESS WIRE)--CDC Games, a business unit of CDC Corporation and pioneer of the "free-to-play, pay for merchandise" model for online games in China, today announced that its parent company, CDC Corporation (NASDAQ: CHINA - News), has filed a lawsuit in the courts of Korea against Mgame, the developer of Yulgang. The lawsuit is for breach of contract and alleges that Mgame has breached contractual obligations owed to CDC Corporation by failing to provide certain financial and operating data and other information which Mgame is required to provide to CDC Corporation as a shareholder of Mgame.


As announced on March 23, 2007, CDC signed a definitive agreement to make a strategic investment in Mgame. CDC completed this investment on May 23, 2007. As a result of this investment, CDC became Mgame's largest external shareholder while extending its license of Yulgang to 2010.

"CDC Games believes it has been a strong partner to Mgame for the last three years," said Xiaowei Chen, Ph.D., president of CDC Games. "We have sought to live up to our side of the bargain as demonstrated through our long, consistent payment history to Mgame. It is regrettable that we need to take these actions because Mgame has failed to live up to their side of the bargain."

Added Dr. Chen, "We continue to serve the interests of our loyal game players of Yulgang with uninterrupted service. In fact the average concurrent users of Yulgang during the last two days has actually been higher than each of the last 1-month and 2-month daily averages. For our users, it is business as usual and we continue to book revenues as usual."

CDC Games has continued to make obligatory royalty payments to Mgame for its operation of Yulgang, which continues to operate in China today. Over the last 3 years, since July 2005, CDC Games has made 25 consecutive monthly royalty payments to Mgame, with an average fee of US $530,105 per month. Total payments to Mgame, including license fees and royalties over the life of the relationship, have amounted to over US $15 million. CDC Games just made its most recent royalty payment to Mgame last week.

Dr. Chen continued, "We believe that the length of our relationship with Mgame as well as the aggregate size and consistency of our payments have made us one of Mgame's most viable partners. CDC has made 25 consistent regular monthly payments to Mgame which were on time and consistent with our contractual obligations. The fact that we have continued to make payments through last week is indicative that we still believe in this relationship and want it to continue. We hope we can come to an amicable agreement with Mgame as we continue to have active dialogue."

The lawsuit in Korea is in addition to the lawsuit CDC Games has filed in the courts of Hong Kong against Mgame for breach of contract alleging that Mgame has not been providing adequate technical support of Yulgang, and Mgame has not been supporting CDC Games in their efforts to combat pirate servers. CDC Games will continue to aggressively pursue all available legal options to protect its interests and the interests of its game players.

About CDC Games

CDC Games is one of the market leaders of online and mobile games in China with more than 100 million registered users. The company's hit title Yulgang was among the first "free-to-play, pay-for-merchandise" online games in China and has received the "Top 10 Most Popular Games" award from the China Game Industry Annual Conference (CGIAC) for three consecutive years, in 2005, 2006 and 2007. Currently, CDC Games offers six popular MMO online games in China that includes: Yulgang, Shaiya, Special Force, Mir III, Shine and Eve Online. In March 2007, the company announced the formation of CDC Games Studio to establish strategic relationships with selected games development partners to accelerate the development of new, original online games for China and other targeted global geographies. CDC Games anticipates being able to deploy up to $100 million for CDC Games Studio investments through contributions from CDC affiliated companies, external partners and its internal resources. In August 2007, CDC Games formed a new subsidiary called CDC Games International (CGI) and CDC Games USA to launch new games internationally and to position CDC Games as a global publisher of online games. For more information on CDC Games, visit: www.cdcgames.net.

About CDC Corporation

The CDC family of companies includes CDC Software focused on enterprise software applications and services, CDC Mobile focused on mobile applications, CDC Games focused on online games, and China.com focused on portals for the greater China markets. For more information about CDC Corporation (NASDAQ: CHINA - News), please visit www.cdccorporation.net.

Cautionary Note Regarding Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the possibility of resolving the dispute with Mgame, the success of any litigation against Mgame and other statements that are not historical, the achievement of which involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. These statements are based on management's current expectations and are subject to risks and uncertainties and changes in circumstances. There are important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, including the following: (a) the uncertainty of litigation; (b) the continued popularity of Yulgang; (c) the future growth of the online games industry in the China market; (d) the challenge in combating pirate servers; and (e) the willingness of other online games companies, media companies and governmental authorities participate in OGAAP. Further information on risks or other factors that could cause results to differ is detailed in filings or submissions with the United States Securities and Exchange Commission made by CDC Corporation in its Annual Report for the year ended December 31, 2006 on Form 20-F filed on July 2, 2007. All forward-looking statements included in this press release are based upon information available to management as of the date of the press release, and you are cautioned not to place undue reliance on any forward looking statements which speak only as of the date of this press release. The company assumes no obligation to update or alter the forward looking statements whether as a result of new information, future events or otherwise.



Contact:
CDC Corporation
Investor Relations
Monish Bahl
678-259-8510
[email protected]
or
CDC Software
Media Relations
Scot McLeod
678-259-8625
[email protected]

--------------------------------------------------------------------------------
Source: CDC Corporation

[setravis]

The "CHINA" Threads in Previous 3SOF Picks
Have been merged.
Got the go ahead to do so from Ramsburg.
I will be working here on this board to merge other threads also.

I will leave you Friday's closing chart while I'm in this thread....... 

Good trading to all !   

Regards,
Your fellow trader @3SOF
setravis