GEO Investing

Today there were 7 ChinaHybrids that reported financial results. Visit our blog for more insight into these these, including SVN, MY, DANG, WX, LIWA, FMCN, and STP. Two of the ChinaHybridsâ„¢ that we will actively track are LIWA, an RTO, with a GeoPowerRanking (GPR) of 4 and WX, an IPO, who had a stellar beat over estimates. Stay tuned for further insight from the GeoTeam and see the earnings review of all ChinaHybrids on our Blog.

WuXi Pharma (WX)

Reported 2010 fourth quarter EPS of $0.28 vs. $0.21 estimate. 2011 revenue guidance is in line with analyst estimates of $400 million. Even though 2011 EPS is expected to be flat at $1.09,  seven out of the next eight quarters are forecast to grow nicely. We will track this stock closely. We need to inquire about the other income line, which contributed EPS of $0.39 to 2010 results.  WX is an ex- GeoBargain.  We will pull SAIC filings.

See outlook


Liwa reported 2010 fourth quarter EPS of $0.45, slightly exceeding estimates. LIWA has a GPR of 4, meaning it is expected to grow EPS at least 20% to 30% over the next four quarters. If numbers are reliable, this stock is one of the best in the ChinaHybrid space. Controversy does exist regarding mismatching SAIC filings. However, the company has since provided filings that match. We do wish that LIWA would have provided EPS guidance. 2010 year end numbers have not been audited yet, which will now be done by Crowe. We will do some DD on this name. 2011 Implied EPS, based on company guidance, is a little shy of $1.80 estimate.

See outlook

Tomorrow, several more ChinaHybridsâ„¢ will be releasing earnings. Below is a brief outline of what to expect along with some comments on a select few companies we found worth mentioning:

Symbol Analyst  Est. 4th. Qrt. Prior Year 4th Qrt. Notes
CRIC $0.12 $0.13 How can you not track an online provider of information (real estate). While EPS growth has not been exciting in recent quarters, the company may be about to enter an extended EPS growth cycle.
CHNG $0.18 $0.30 Not interested. EPS growth is forecast to be weak in 2011. Friedman replaces Fraizer Frost as auditor
DEER $0.30 $0.23 The company used to be a Tier 1 company because it was making shareholder friendly moves, such as buying back stock and giving EPS guidance; however, the company has a negative operating cash flow position, due in part to a ballooning account receivable position. We took DEER off our tier list because SAIC filings do not match SEC filings.  We are in the process of evaluating these filings.   Global Hunter lists DEER as one of its top stocks.
CTE $0.06 TBA A recent IPO in the oil recovery business. No comments at this time
CBEH $0.34 $0.28 Another company that has come under fire. We were turned off when the company recently raised money at insanely cheap valuations, despite having a healthy cash balance. The company just finished working off past dilution. We may investigate the whole story in the near future.  Has upgraded auditor to KPMG.
TRIT $0.31 $0.24 GeoBargain, TRIT did not perform well after its 2010 3rd quarter report due to guidance not well received by the street (even though they are expected to post healthy growth). One of the risks to the TRIT story is that quarterly EPS guidance can be hard to peg down, due to the timing and size of contracts. One thing we will be looking for in the upcoming release is any evidence of debt financing–something the company has been working towards. Advantages to the debt financing will be not diluting via the use of equity and the ability to bid on more business. If completed, we believe the 2011 EPS estimate of $1.50 could be conservative. SAIC filings are in line with SEC filings except for an item on the liability side of the balance sheet. We have asked the company to comment on this and are awaiting response.