GEO Investing

Call(s) to Action: None

Here are the stories that the GeoTeam is following today… (Please see full disclosures at bottom)

  • ChinaHybrids
    • CNET ($0.77)Reported weak Q1 2014 results; Guidance implies next 3 quarters will show improvements vs the prior year.
    • NQ ($4.35; marked down over 25% in pre-market)Dismissed PricewaterhouseCoopers (PwC) as independent auditor. NQ hired Marcum Bernstein Pinchuk as new auditor.
    • JOBS ($68.68)Announced change of ADA ratio to 1:1 from 1:2.
    • AMAP ($20.90)Announced closing of going private transaction for $21.00 per share.
    • ZX ($2.17)Announced withdrawal of restructuring proposal.
    • LEJU ($11.30)Announced strategic agreements with leading brokerage agencies in key cities and prepares to launch new listing product.
  • U.S. News
    • AEHR ($2.76; marked up roughly 10%)Reported strong Q4 2014 results; Q4 revenues of $5.4 million vs $3.3 million with non-GAAP EPS of $0.04 vs a loss of $0.07 in prior year.   New products more than triple addressable market for FY 2015 and beyond.
    • BURCA ($18.75) and GLDC ($4.43) reported improved bottom line results on flat to slightly up sales.
  • GeoBargains/GeoBargains on the Radar
    • GeoBargain CSTI ($13.49) – Bullish Seeking Alpha article; Author calls the recent CohuHD acquisition a home run and derives a $30.00 price target.
      • CSTI’s acquisition of COHU’s video camera business transforms the CSTI business model.
      • Q1 results were soft, but the 2015 EPS potential is impressive to say the least.
      • The risk of owning CSTI has gone down, and the valuation can go much higher.

    For more timely information, particularly during the daily trading session, we urge our members to read our message board posts daily.

    Disclosure: Long CSTI ; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

    Summary of general highlights:

    On the Asian Front…

    Nq Mobile (NYSE:NQ) ($4.35) – NQ is a leading global provider of mobile Internet services focusing on security, privacy and productivity.

    “The Company’s Audit Committee has dismissed PricewaterhouseCoopers Zhong Tian LLP (PwC) as its Independent Auditor.  Effective immediately, the Company’s Audit Committee has engaged MBP as its new Independent Auditor with respect to the fiscal year 2013 and subsequent periods.”

    51 Job (NASDAQ:JOBS) ($68.68) – provides integrated human resource services in the People’s Republic of China. Announced

    “ that the Company will change the ratio of its American depositary share (“ADS”) to common share from one (1) ADS to two (2) common shares to one (1) ADS to one (1) common share.”

    Autonavi Holdings (NASDAQ:AMAP) ($20.90) – provides digital map content, and navigation and location-based solutions in China.   At an extraordinary general meeting held today, the Company’s shareholders voted in favor of the proposal to authorize and approve the previously announced agreement and plan of merger for the right to receive US$21.00 per share.

    China Zenix Auto (NYSE:ZX) ($2.17) – ZX is the largest commercial vehicle wheel manufacturer in China in both the aftermarket and OEM market by sales volume. ZX announced that its board of directors has received a letter from Mr. Jianhui Lai, the chairman of the Company’s board of directors and chief executive officer, RichWise International Investment Group Limited and certain of its affiliated entities (together, the “Consortium Members”), withdrawing the preliminary non-binding proposal for a business restructuring dated November 23, 2013.

    “Mr. Jianhui Lai, chairman and chief executive officer, commented, “I believed the proposal could have offered shareholders an alternative to increase shareholder value through an online business operation. As the largest shareholder in China Zenix, my interests are aligned with the Company’s. However, upon assessment of changes in market conditions, it is in the best interest of the Company and its shareholders as a whole that the preliminary proposal be withdrawn.”

    Leju Holdings Ltd (NYSE:LEJU) ($11.30) – operates real estate information and e-commerce websites in China.  Announced that it has signed strategic agreements with over 100 secondary brokerage agencies in 17 key cities in China, including four secondary brokerage agency alliance groups in Hangzhou, Qingdao, Chongqing and Xi’an.

    “We are committed to continuously innovate and improve our products and services to meet the needs of brokerage agencies as well as home buyers and sellers, while pushing forward the development of the online secondary listing industry. The verified listing model we first introduced in 2012 was well received by agencies as a more effective sales-conversion model. We are excited to expand verified listings into more cities and to work with a broader group of agency partners.”

    Chinanet Online Holdings (NASDAQ:CNET) ($0.77) – CNET is a leading Internet services and media technology company providing online advertising and brand management solutions for small- and medium-sized enterprises in China.  Announced Q1 2014 results:

    • Sales for Q1 2014 were $5.2 million vs $7.0 million in prior year
    • Q1 2014 Loss per share of $0.03 vs $0.00 in the prior year

    The Company is forecasting revenues of approximately $39 million for the fiscal year 2014 vs $30.3 million in FY2013.

    On the U.S. Front…

    Notable U.S. Earnings…

    Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
    Aehr Test (NASDAQ:AEHR) $3.05 n/a $0.04* -$0.07*
    Burnham Holdings, Inc. Class A (NBB:BURCA) $19.00 n/a $0.19* -$0.20*
    Golden Enterprises, Inc. (NASDAQ:GLDC) $4.43 n/a $0.06 -$0.04

    * denotes non-GAAP; ** Pre-market

    In Other U.S. News…

    Aehr Test Systems (NASDAQ:AEHR) ($2.76) – AEHR is a worldwide provider of test systems for burning-in and testing logic and memory integrated circuits and has an installed base of more than 2,500 systems worldwide.  Reported strong Q4 2014 results:

    • Q4 revenues of $5.4 million vs $3.3 million
    • non-GAAP EPS of $0.04 vs a loss of $0.07 in prior year.

    Quotes from management:

    “…new IC test markets include the SSD Flash testing market, the emerging automotive IC testing market, and the wafer level reliability testing market, all of which we believe will expand our served available market in calendar year 2015 and beyond from $100 million to between $400-$500 million. With our new ABTS-P and FOX-P products, we believe Aehr Test is uniquely positioned to capitalize on these new emerging markets”

    In our 9/27/2013 email, when the stock was trading at $1.91, we mentioned that we would begin tracking AEHR as a possible turnaround play.

    For more timely information, particularly during the daily trading session, we urge our members to read our message board posts daily.


    The GeoTeam