Sinotel Technologies a sprint run & no.1 of the 20 Vol shares traded on 02/12/09

Top 20 Volume Shares Traded on 02/12/09; Sinotel was the no.1!


I just noticed that yesterday (02/12/09), Sinotel Technologies was the no.1 stock in the 20 Volume of the shares traded. There were 78,907,000 shares traded and the counter closed stronly at $0.62 which was a jump of 6.5 cts or +11.71% increase compared to the previous day (01/12/09).

What's the reason behind this, I wonder? I googled the net for 'Sinotel Technologies' wondering what's the latest news of this company which may have excited the market.

The only such news I found is on 30/11/09.

Sinotel Technologies Ltd. (ADR: SNOXY; "Sinotel" or the "Company") is a China-based, Singapore-listed company traded on the Singapore Exchange under ticker SGX: D3W and also traded in the United States of America as American Depository Receipt ("ADR") ticker, SNOXY, under the ADR program. Bank of New York Mellon is the Company's ADR Depositary Bank. Sinotel is an innovator of wireless telecommunications infrastructure and solutions in China. Today, the Company announced financial results for the third quarter and nine months period ended September 30, 2009.

-- Revenue for the quarter, in RMB, increased by 57.9% on a year-over-year
basis to $20.0 million, driven by strong demand in Wireless Network
Solutions business, while net profit increased 52.0% on a year-over-
year basis to $6.1 million

-- Revenue and net profit through nine months ended September 30, 2009
increased to $55.0 million and $16.5 million respectively, representing
a 39.6% and 27.3% increase, in RMB, over the same periods of last year


Third Quarter Ended September 30, 2009 Results

Total revenues for the third quarter ended September 30, 2009 reached $20.0 million. The increase of revenues of 57.9% is attributed to increasing demand for wireless network solutions. Specifically, the increase was due to more contracts secured in Shanxi province as well as the increase in sales revenue contribution from the Company's Emergency Mobile Communication System ("EMCS") which was introduced in 2008. Gross profit for the quarter, which was $8.7 million, reflected a 66.8% increase compared to the same period of 2008. The increase in gross profit was driven by the increase in revenue. Gross margin for the three months ended September 30, 2009 was 43.7% versus 41.4% for the same period of the prior year.

General and administrative expenses, which were $1.5 million for the quarter, an increase of 77.4% compared to the same period of last year. The increase in expenses was related directly to the increase in depreciation associated with fixed assets additions during second half of 2008 plus an increase in accrual for performance bonuses. As a percentage of revenue, general and administrative expenses in the third quarter was 7.7%.

Net profit for the quarter ended September 30, 2009 increased by 52.0% to $6.1 million. Net profit margin for the quarter was 30.7%. Earnings per ordinary share for the quarter were $0.02 based on 308,000,000 weighted average number of ordinary shares outstanding. Each Sinotel ADR represents 20 ordinary shares.


Nine Months Ended September 30, 2009

Through the first nine months of 2009, revenues increased to $55.0 million, a 39.6% year-over-year increase. The increase in revenue was contributed from Sinotel's Wireless Network Solutions segment as more contracts were secured from the Shanxi province. The Emergency Mobile Communications System also contributed to the growth of revenues recorded in the nine months period.

For the nine-month period ended September 30, 2009, gross profit was $22.9 million, an increase- of 35.0% compared to the same period of last year. Gross margin for the nine months period ended September 30, 2009 was 41.6% versus 43.0% for the first nine months of 2008.

General and administrative expenses, which were $3.9 million for nine-month period of 2009, reflected an increase of 63.8% compared to the same period of last year. The increase in expenses was related directly to the increase in depreciation associated with fixed assets additions during second half of last year plus an increase in accrual for performance bonuses as reported in the third quarter. The increase was offset by a decrease in staff costs and decrease in other expenses, which include office expenses and professional fees.

The finance costs for third quarter and nine months periods ended September 30, 2009 increased as a result of increased borrowings.

Net profit for the first nine months was $16.4 million, reflecting a 27.3% increase over the same period of last year. Net profit margin for the nine months period ended September 30, 2009 was 29.9% versus 32.8% for the same period of 2008. The slight decrease in net margin was mainly due to increase in general and administrative expenses as well as finance costs.

Earnings per ordinary share for the nine months period ended September 30, 2009 were $0.06 based on the weighted average number of ordinary shares outstanding for nine months period ended September 30, 2009.

Mr. Jia Yue Ting, Executive Chairman of Sinotel commented, "The Group posted a remarkable set of results for the third quarter and nine months this year amidst growing demand for wireless network solutions. Due to the pressing timeline given by our customers, several projects were completed ahead of schedule giving rise to the better than expected figures."


Outlook and Future Plans

Sinotel believes the overall macro environment for China's telecommunications industry remains favorable. The sector continues to enjoy progressive growth driven by the telecom operator's spending on infrastructure and through the development of the country's 3G mobile network.

Mr. Jia Yue Ting added, "China's 3G rollout has been progressing well, and now most of the key cities are 3G capable. We anticipate that the next stage of development will be to increase the capacity of the new network and broaden its coverage to smaller cities."

Going forward, Sinotel intends to focus on developing its business within the eight existing provinces, seeking orders from new cities and penetrating deeper into the rural areas. The Company is confident that its financial outlook will remain favorable for the rest of the financial year 2009.


Balance Sheet and Cash Flow Discussion

As of September 30, 2009, cash and cash equivalents totaled $11.3 million, $53.4 million in accounts receivable with an average days sales outstanding of 197 which, the Company believes, was consistent with that of industry peers, and shareholders' equity of $81.2 million.

From PRNewswire, "Sinotel Technologies Ltd. Posts Strong Financial Results for Third Quarter Led By Accelerating Demand in Wireless Network Solutions Business".

I am curious whether the surge will continue today for this wonder shares.

Meanwhile in Channel NewsAsia forum, the thread discussion on Sinotel has so far reached 229 pages. Check it out at "SINOTEL's Daily Update......."; not much theory was proposed, though, about the bull run of the counter.

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