Sound Global

[tostubi]

there seems to be two consecutive days of huge price drop in hong kong. almost down to the price that its shares in singapore are trading at.

[l0nEr]

hmm earnings look pretty good to be honest, higher revenue + higher gross margins.
i guess the financial statements is just harder to read then normal, with the service concession receivables and contract receivables/payables distorting the cash flow statements.
However, the sharp increase in interest expense is really quite shocking. probably needs to control the interest costs more, its making up 15% of revenue in Q1.
btw the Sound Global bonds issued last year are now trading around USD110, which means yields could have been much lower. The bond market seems to love the company.

[CityFarmer]

hmm earnings look pretty good to be honest, higher revenue + higher gross margins.
i guess the financial statements is just harder to read then normal, with the service concession receivables and contract receivables/payables distorting the cash flow statements.
However, the sharp increase in interest expense is really quite shocking. probably needs to control the interest costs more, its making up 15% of revenue in Q1.
btw the Sound Global bonds issued last year are now trading around USD110, which means yields could have been much lower. The bond market seems to love the company.

A peek into the account, few key points to highlight
- The growth of revenue and gross profit remain strong, which are expected with the more BOT projects secured, and with higher tariff.
- The net profit is pull down by the finance interest paid. It is a major issue to be solved by management. The plan to replace senior note with CB did not work out well. The company is on net debt, rather than net cash all along.
- O&M income continue to grow fast, with 1.5x in this quarter. The O&M will continue to grow with more BOTs in operation.

Will share more after detail analysis

(vested)

[CityFarmer]

Sound Global downgraded to Hold with 63 cents target price by DBS Vickers

Sound Global’s 1Q13 was hurt by higher interest expenses and taxes, says DBS Vickers. The company reported a net profit of RMB 61.5 million ($12.3 million). This was 20% lower y-o-y and 25% lower q-o-q. The net profit was also 10% below DBS Vicker’s forecast despite higher sales.

Excluding RMB 5.3 million forex gain, core profit would even be lower at RMB 56.2 million. The house says a key shortfall was finance costs which skyrocketed to RMB 76.8 million from RMB 30 million because the interest for the US$ senior notes surged to $41.7 million vs its forecast of $29.3 million, due to withholding tax. The tax rate was also higher at 25% vs its assumption of 15%. 1Q13 gross margins were higher at 32.9% compared to 30.4% in 1Q12 and 29.2% in 4Q12.

http://www.theedgesingapore.com/the-dail...ckers.html

[CityFarmer]

The stock goes against the tide, with last 20 days return of > 15%. The stock may be taken as defensive stock by investor.

IMO, this is a long-term growth stock, and I don't expect any catalyst in near term (< 1 year). I may be wrong, and I hope so.

(vested)

[kelvesy]

Looks like a candidate for pick up during this mini correciton.

[CityFarmer]

Management requested a trading halt

http://info.sgx.com/webcorannc.nsf/Annou...endocument

Trading halt is not a common request from the management. The last similar request was to announce dual listing on HK Exchange. I am speculating that the pending announcement is CB related.

Any other views?

(vested)

[opmi]

TRADING HALT
At the request of Sound Global Ltd. (the “Company”), trading in the Company’s shares will be halted with effect
from 9:00 a.m. on Friday, June 28, 2013, pending the release of an announcement pursuant to the Hong Kong
Code on Takeovers and Mergers.

[kelvesy]

Just in.

Chairman Wen Yibo contemplates delisting Sound Global from SGX. Offer price not less than $0.70, could be more.

Personal view: Sound Global is a growth company riding on China's plans to industrialize certain rural parts of China. This means big business for Sound Global. If I'm a shareholder, I will reject. Not very enticing.

http://info.sgx.com/webcoranncatth.nsf/V...8003470F5/$file/Ann-PossibleExitOffer-28Jun13.pdf?openelement

[Nick]

Congratulations to all vested !

(Not Vested)