LongCheer ::.. Benefiting from style conscious Chinese consumerism

PRESS RELEASE – FY2006 RESULTS
SGX-LISTED LEADING CHINESE MOBILE PHONE DESIGNER LONGCHEER HOLDINGS DOUBLES FULLYEAR EARNINGS TO RMB 224.5 MILLION

Revenue grew 155% to RMB 1,984.0 million; net profit
doubled to RMB 224.5 million (S$44.8 million)49.5% dividend payout ratio; proposed final dividend of 1.56 Singapore cents per ordinary share, on top of 4.16
Singapore cents in interim and special dividends for FY2006

Financial Statement and Dividend Announcement

LongCheer Media Release



As mentioned in my earlier post, LongCheer is in a good cash position and management has rewarded loyal shareholders with another generous dividend payout.

TA vs FA on LongCheer

Technical Side of 3G Rollout in China

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LongCheer could be the closest proxy to the widespread rising style conscious consumerism of the Chinese in PRC and also hitch onto the rising adoption of the mobile lifestyle in China. Mobile handsets has practically been unirreplacable part of our lives. Can you imagine going out without your handset? It's as if we are born with handsets(obviously not I was born with pagers. Just joking). My first mobile was the Motorola StarTec X , then Nokia 6650, Nokia 6610, 3 Samsungs, 2 Sony Ericssons and now the lastest addition SE W810i. Imagine the mini fortune, I had spent on phones. Maybe you might not change handsets as often as I do. I work on them for research and development though. I would like to highlight the current widespread spending generation of Chinese. The need for a better quality of life. Not to be caught dead pulling out a outdated phone model from your pocket. Chinese are particular about the face-value factor. Laughs.

LongCheer is a relatively new listing here in SGX. So far, its results released has been impressive. LongCheer achieved y-o-y sales and earnings growth of 102% and 69% respectively in the 3Q06. Gross margin improved from 16.1% to 19.1% q-o-q driven by new products. Staff size has grown considerably from 300 to 600 which bodes for further expansion.

LongCheer is deeply undervalued given its rosy growth prospects. LongCheer has a cash position of RMB 429.9M and I expect another generous dividend payout from the company. CIMB-GK has a TP of S$1.59 while DBS Vickers has a fair value of S$2.00 for LongCheer. Currently, I have a fair value of S$1.20 for LongCheer which is approximately 67% undervalued from the current share price of S$0.71.


Possible Customers & Rivals of LongCheer




I will have a detailed calculations later. Looks fantastic on first glance though.





Cheers
Niversphere.

Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information.

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DanielXX said...
Bravo! Figure out your competitive advantage, build assiduously on it and eventually you will succeed as people recognise your value-add. That's what I always believe.




Cheers
Niversphere.