Fung Choi Media Group : Keeping Faith With Value, Ignore The Noise.

Highlights:

· Broad-based demand, leading to strong contributions from existing and new
businesses: Group revenue grows +47% to HK$843.7 million.

· Robust demand for printing and packaging services and products:
Printing and packaging revenue +31.8% to HK$618.2 million.

· Higher circulation and advertising revenue from magazine portfolio:
Newly acquired Flying Media records advertising and distribution revenue growth of
88.3% to HK$197.7 million.

· Part year contribution from newly formed display marketing business:
Display marketing revenue contribution of HK$27.8 million.

· Net Profit attributable to shareholders +28% to HK$163.1 million.

· Strong foundation for growth amid buoyant economic conditions:
Group is optimistic of business prospects in FY2007

Media Release

Full Year Financial Statement And Dividend Announcement.


I released to some readers my analysis on Fung Choi. I felt it was inappropriate to release my analysis here as it would warrant unwanted attention.

Rumours were wild, false accounting practices, accounting irregularities and huge provisions made for such actions.


I held my stand based on value DCF evaluation, my personal experience in the printing industry and past stock market knowledge. I dont see any rumours of the sort I have hearing recently. Average down , average down was ringing loud in my ears. The discount was too attractive for a value investor like me to ignore.


"Buy on rumours, sell on facts."




I just reached home and am delighted on first glance the results that were released. As usual, I will do the sums and come up with the revised analysis on Fung Choi.





Cheers
Niversphere.
p.s: I hate Mondays!!!






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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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LongCheer :: Highlights to Make

Generally for handset designers and makers, the 3Q is the strongest and the 4Q is the weakest. LongCheer achieved 81% QoQ increased gross profit which is impressive. YoY gross profit increased 123%. I expect competition to intensify and gross margins might dipped a little. It has maintained a good cash position of RMB450 from RMB 429.9M previously mentioned. Trade receviables decreased 17% to RMB 41.1 M.
Inventory turnover improved to 19.7 days from 26.5 days which is huge improvement, I would like the the inventory turnover to improve further. As highlighted before, staffing has increased further to 700 at the end of FY2006, no comments.


“We expect the mobile phone market to remain buoyant in the financial year ahead. Given that mobile phone penetration rates remain low and replacement demand is becoming increasingly high, we maintain an optimistic outlook on the Group’s prospects. Now that we have established a strong presence in the Chinese market, we are well-positioned for a new level of growth in the overseas market as well,” commented Mr Tao.


My Investment Philosophy

I would seriously like to see LongCheer venture overseas out of its doors to North America or Europe just like TechFaithWireless.LongCheer had a collaboration with a local company for a certain Linux PDA smartphone model. Apparently, we are not receiving more positive news from this company. Well.(FYI: I tried smartphones built on different platforms for comparison, and my ratings are Windows, Linux then Symbian OS.)

Some people highlighted the fact that the management has stated that FY07 will be moderate. I had to say management was wise to lower shareholder expectations as such rapid growth is simply too good and difficult to substain. I remain higly optimistic on LongCheer.


By current price, PE ratio is a low single digit of 7.2, strong cashflow position, expanding R&D staff force, ambitious management, leaders in its own industry, building up higher barriers of entry by vertical expansion and acquiring edge technology, implementing 3G network and style conscious Chinese consumerism.

Based on my DCF model, eps growth rate of 20% and discount factor of 5% which yields an instrinsic value of S$1.93 which is 16x PE ratio which is more in line with its peers PE ratio of 15 to 20.


BlogCharm

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.