Longcheer Holdings

[freedom]

Erm I don't understand ur statement clearly. I think inventories are not priced higher as they mentioned that there was a price competition upstream. Simply said, they are buying cheaper inventories but claim that the event has caused their gross margin to decline.. How can lower inventory costs increases COGS?

Am I missing out something or they are talking crap?

Perhaps they took an impairment loss on their inventories in bs and charged it to COGS. In that case, it is possible to cause overall COGS to increase when price of their supplies falls

inventory was from previous period I think, could be priced higher.

recently chip price dropped, but their inventory could be still "old" inventory.

due to chip price drop, wholesale or retail sale of phone price drop. so margin squeeze.

[Herodot]

[Image: LongCheerDailyJan2011.png]

I will print this out and hang on my desk to remind me what can happen if you invest in a company with no competitive advantage in a fast moving buisness with high competition!
From one to another quarter the buisness can falter and analyst and investor will stand mouth open wondering what happend!

[freedom]

what a development!

3 months from high of 0.8+ to now 0.245, low of March 2009.

amazing.

[btig]

this stock is finally turning around

1. prospective PE of less than 4x
2. share buy back
3. potential dividends next Q
4. reducing debt level
5. healthy cash
6. selling non-core assets to improve margins
7. count lenovo; alcatel; xiaomi; ZTE; haier; china telecom, china mobile as customers
8. growing smartphone penetration for China and India (previously the company grew on feature phone now riding on smartphone)

[kelvesy]

this stock is finally turning around

1. prospective PE of less than 4x
2. share buy back
3. potential dividends next Q
4. reducing debt level
5. healthy cash
6. selling non-core assets to improve margins
7. count lenovo; alcatel; xiaomi; ZTE; haier; china telecom, china mobile as customers
8. growing smartphone penetration for China and India (previously the company grew on feature phone now riding on smartphone)

I took a quick look at the financials. The management looks fairly capable at turnaround. Right steps taken. I wonder if they have any economic moat in this industry. NAV 33c, cash 7c, valuations look ok. correct me if I'm wrong.

[btig]

this stock is finally turning around

1. prospective PE of less than 4x
2. share buy back
3. potential dividends next Q
4. reducing debt level
5. healthy cash
6. selling non-core assets to improve margins
7. count lenovo; alcatel; xiaomi; ZTE; haier; china telecom, china mobile as customers
8. growing smartphone penetration for China and India (previously the company grew on feature phone now riding on smartphone)

I took a quick look at the financials. The management looks fairly capable at turnaround. Right steps taken. I wonder if they have any economic moat in this industry. NAV 33c, cash 7c, valuations look ok. correct me if I'm wrong.

Yes, with the sale of non core and debt repayment, cash balances should increase going forward.

Longcheer designs and OEM for brand owners, who focuses on sales, distribution & marketing. They are the biggest and leader in asia pac. No such model in rest of world as most like nokia, apple and samsung does it in house.

From the numbers, Longcheer seems to be doing things right.

[btig]

This is just the beginning...patience

[kelvesy]

2,284,000 share buy-back price ranging from $0.151 to $0.158 yesterday. But as it is a chinese company, I doubt it would trade near NAV after recovery due to aversion to chinese companies? Or am I wrong? btig, any insights?

[btig]

hi kelv, since this is not a blue chip conglomerate type co, i wouldnt focus on nav/book value. i think earnings will be the key driver.

longcheer is finally getting back on track to generate cash, as can be seen from its share buyback and loan repayment.

the company needs to continue to innovate as China moves from 3G to LTE, margins should continue to improve as they move away from feature phones/

[kelvesy]

btig, you're spot-on! longcheer went up 33%+/- from a price of $0.15.

http://sg.finance.yahoo.com/echarts?s=L2...=undefined;

i've personally done an assessment of longcheer and tried to understand the industry - whether it is growing or declining. By my own yardstick, it was safe enough an investment. Cheers.