Sinotel Technologies

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#1
Sinotel has won 3 contracts from China Mobile, China Unicom and China Telecom to provide infrastructure services.

http://info.sgx.com/webcoranncatth.nsf/V...penelement

http://info.sgx.com/webcoranncatth.nsf/V...penelement

http://info.sgx.com/webcoranncatth.nsf/V...penelement

It has depressed P/E, good cashflow and good margins, albeit decreasing for the past few years.
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#2
pls look out for the account receviables, zero dividend payout policy and recent placements or rights issue when they do not have much capital expenditure.
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#3
Yes their accounts receivables is very perplexing! It seems to rise all the time and it stands around SGD$100mil.. The major telco players take a long time to pay for Sinotel's services. The management should push for faster receivables from the telco.
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#4
taka666 Wrote:The management should push for faster receivables from the telco.

The telco holds all the bargaining chips. China Mobile has been known to take 300 days to pay bills. Companies like Sinotel will collapse if they grow too fast, because their working capital needs keep expanding. If they cannot get the financing they are done for.

The accounting P&L says they have a lot of revenue and earnings. The economic reality is that they do not generate any cash and are unlikely to do so for the foreseeable future. The more sales and earnings they have, the more cash they will consume.

Since the company's business model makes it impossible to pay a dividend, an investor has to count on being able to sell his shares to a greater fool willing to pay more.
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#5
The boss of Sinotel is 贾跃亭­.
He has another company 乐视网 that was listed recently in Shenzhen stock exchange. The following article put doubt over the IPO figures.

http://www.zhicheng.com/html/archive/70/...44427.html

或成A股首家上市视频网站 乐视网遭质疑
时间:2010-06-12 09:34:00 发帖者:乌龟爷爷 点击:664 我有话说 字号:T|T
·头条3只连续上涨10%金股 ·私募拉升:每日猛涨6% ·今日内幕:巨资拉升至涨停
  业界质疑点

  □流量与广告收入不成正比

  □控股股东和实际控制人贾跃亭身份悬疑

  □乐视网四川分公司办公地点存疑

  前日,中国证监会发布的创业板审核结果显示,乐视网信息技术(北京)股份有限公司(首发)获得通过。由于乐视网或将成为首家在A股上市的视频网站,此消息引起业内人士的广泛关注。然而,乐视网在获得掌声的同时,也遭到众多质疑。其中最大的疑点是:国内多家排名比乐视网靠前的视频网站尚未实现收支平衡,而该公司却声称已经连续盈利三年。

  乐视网的招股书显示,其控股股东和实际控制人是贾跃亭,其持有公司4680.75万股,持股比例高达62.41%。

  率先盈利3年?业内称奇

  6月10日,中国证监会发布2010年第33次创业板发行审核结果,其中,一家名为乐视网的公司首发获得通过。据乐视网招股说明书显示,该公司此次发行前总股本为7500万股,拟发行2500万股人民币普通股。发行后总股本1亿股全部为流通股,每股面值1元人民币。

  如果乐视网成功登陆创业板,则将成为国内首家在A股上市的视频网站。此前,在6月1日,国内另一家视频网站酷6网借壳华友世纪登陆美国纳斯达克。业内人士对乐视网的上市褒贬不一。部分网友对此表示欢欣鼓舞,而也有不少业内人士对乐视网的财务报告提出质疑,甚至有人认为"太神奇"。

  在业内对乐视网的质疑中,最大的疑点来自于其招股书中的盈利说明。

  根据其招股书,乐视网在过去的三年均有过千万的净利润,其中,2009年录得净利润4447万元。而业内人士告诉记者,目前即便是排名靠前的优酷、土豆、酷6等几家视频网站,也难保全年实现收支平衡。

  此外,乐视网公布其2009年营业收入为1.46亿元,其中3700万来源于广告。而按照互联网业内的惯例,收入与网站的流量基本不成正比。

  根据网站排名查询系统alexa昨日的数据,乐视网与国内其他几家视频网站的流量相差甚远。其在全球网站中的排名为1525,在中国排173;而优酷网在全球排52,中国排第9;酷6网全球排120,中国排22。

  控股人旗下公司6家空壳

  乐视网的招股书显示,控股股东和实际控制人是贾跃亭,其持有公司4680.75万股,持股比例高达62.41%。据悉,贾跃亭原本是山西"煤老板",后来转行做通信设备,进而进军网络视频市场。但是关于其身份,目前尚有众多疑云。

  昨日,记者分别致电贾跃亭控股的乐视网和北京西伯尔通信科技有限公司联系采访,电话均未能接通。

  乐视网的招股书显示,除乐视网外,贾跃亭还持有其他16家公司的股份。这些公司可分为三大板块,分别是网络视频服务(2家公司)、电信设备集成和制造 (6家)以及影视投资(9家)。其中,影视投资板块中有6家公司是"空壳公司,无实际业务"。而招股书中也说明,这6家空壳公司是贾跃亭在 2005~2006年间为筹备境外融资而成立的,一直未开展经营业务。目前贾跃亭已经承诺注销这6家公司。在电信设备集成和制造板块,也有两家公司被标注"未开展实际业务"。

  2007年11月,贾跃亭创立的电信设备公司Sinotel Technologies在新加坡主板上市,融资约2亿元。随着当时国内媒体的报道,贾跃亭逐渐进入公众视野。当时有媒体报道,贾跃亭之前从事煤炭行业多年,拥有自己的小煤矿。然而,在乐视网招股书对贾跃亭的说明中却并未提及与此相关事宜。

  根据招股书的说明,贾跃亭现年37岁,早年间曾在山西垣曲县地方税务局担任网络技术管理员,1996年~2002年任垣曲县卓越实业公司总经理。

  而目前网上能查询得到的"垣曲县卓越实业公司",是一家从事医药保养的企业,主要经营生物制品及产品设备。

  此外,招股书声称,乐视网在国内设有包括四川分公司在内的5家分公司,而昨日本报前往其公布的四川分公司所在的金牛区某写字楼时,却并未发现挂有乐视网牌子的相关公司。
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#6
(11-11-2010, 09:00 PM)d.o.g. Wrote: Since the company's business model makes it impossible to pay a dividend, an investor has to count on being able to sell his shares to a greater fool willing to pay more.

I was once e greater fool and sold out with substantial losses. Learnt my lesson to ignore s-chips completely.

To add on, compare e growth of receivables with comba telecom and u will know something smells fishy. Otherwise how can they maintain their continued increase of ROE? Perhaps this is one of e reason it is not audited by e big 4. They are best in announcing contract wins. But if u took note most of these contracts are so minor compared to the revenue they can generate every year. Even e latest contract win does not reveal e potential revenue from the deal. As if it does not have enough red flags. Do note that the operating cash flow just recently recovered..

I wish good luck and good night sleep to any value investors on this counter. My 20 cents
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#7
(11-11-2010, 09:00 PM)d.o.g. Wrote: The telco holds all the bargaining chips. China Mobile has been known to take 300 days to pay bills. Companies like Sinotel will collapse if they grow too fast, because their working capital needs keep expanding. If they cannot get the financing they are done for.

The accounting P&L says they have a lot of revenue and earnings. The economic reality is that they do not generate any cash and are unlikely to do so for the foreseeable future. The more sales and earnings they have, the more cash they will consume.

Since the company's business model makes it impossible to pay a dividend, an investor has to count on being able to sell his shares to a greater fool willing to pay more.

I am starting to learn and realize that in most cases, it is the nature of the industry and company which prevents it from being a worthwhile investment. In Sinotel's case, the problem of rising receivables and constant cash drain is part of the industry, and so one cannot "divorce" them both. If the business model is capital intensive, then there is likely no free cash flow present, and significant sums of money need to be employed just to keep up with the competition, or to just stay relevant!

So despite the company's pronouncement of contract wins or tie-ups, it's still very important to inspect the numbers closely. I've learnt, over the years, to avoid the glossy hype which generally accompanies press releases, and to instead just focus on what's important.
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#8
Just to add on to Yeo-san's interesting discovery (thx!): 贾跃亭释疑:谁为乐视网买单?

Beware.
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#9
Quote:I am starting to learn and realize that in most cases, it is the nature of the industry and company which prevents it from being a worthwhile investment. In Sinotel's case, the problem of rising receivables and constant cash drain is part of the industry, and so one cannot "divorce" them both. If the business model is capital intensive, then there is likely no free cash flow present, and significant sums of money need to be employed just to keep up with the competition, or to just stay relevant!

So despite the company's pronouncement of contract wins or tie-ups, it's still very important to inspect the numbers closely. I've learnt, over the years, to avoid the glossy hype which generally accompanies press releases, and to instead just focus on what's important.

Thanks for the your insights MW. I'm also slowly learning how to look into different industries and how the mechanics of different industries affects the company involved in it. Cheers!

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#10
(12-11-2010, 10:36 AM)bluechipstamp Wrote: Just to add on to Yeo-san's interesting discovery (thx!): 贾跃亭释疑:谁为乐视网买单?

Beware.

Thanks Blue San.

In China, piracy through P2P is the most dominant form of video and music distribution. I do not see how a company like 乐视网 can actually garner so many customers (300,000) to pay for the movies and tv serial services.

The article also raised doubt over the advertisement revenue of 37 million. Who on earth will place advertisement in internet with a company that has only 300k subscribers?
乐视网 is not even in the top ten of the media distribution portal in China.

Another similarity between 乐视网 and Sinotel.
The operating cashflow is high but the capital expenditure is even higher.
Basically, the shareholders will not be able to get dividends.
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