Call(s) to Action:

APPG ($0.43) – We covered our short position locking in over 50% gains.  We first mentioned we were shorting APPG in our 8/13/2014 “call to action” when the stock was trading near $1.20.  On 8/15/2014 we published our full short thesis report, “The Jig Is Up, The Same “Sexy” Pump And Dump Story With A Different App”.  The stock has fallen over 60% since the time of our article.   For complete timeline of alerts sent to members please go here.

NHTC ($12.54) – Began to unwind our long NHTC position.  After a 525% run up since we disclosed our long position on 9/5/2013, we feel it is prudent to perform more due diligence since it is a U.S listed China based company trading on the Pink Sheets.

KNDI ($18.27; marked up pre-market) – KNDI shares are strong pre-market based on a headline that China might raise 100 billion yuan to fund electric car chargers.  Watching CBAK and HPJ as two other names that may  benefit from this news.  We are long HPJ and believe it is the most legitimate investment  of the three.

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

  • ChinaHybrids
    • KANG ($22.65) –  Reported Q1 2015 results.  Shares marked down nearly 15% in pre market trading based on 2015 revenue guidance of $283 to $290 million.  Analyst estimates for full year 2015 revenues were $323 million.  The company issued a press release stating that reuters estimates were not accurate and that they were being adjusted.  We are looking into this further.  The company also missed analyst EPS estimates for the quarter.
    • XUE, RENN and CISG also reported quarterly earnings reports. Please see our earnings screen for details.
    • CAST ($0.01) – Ex-ChinaCast Chairman sued over alleged theft of funds.
  • GeoBargains/GeoBargains on the Radar
    • GeoBargain on the radar SPCB ($11.32)Reported strong Q2 2014 results;
      • quadrupled revenue to $7.1 million vs $1.9 million in prior year; ahead of analyst estimates of $6.5 million
      • non-GAAP EPS of $0.19 vs $0.05 in the prior year; ahead of analyst EPS estimates of $0.13
      • Bullish commentary by management.
      • We believe Q3 and Q4 2014 will be meaningfully sequentially stronger than Q2.

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

Disclosure: Long SPCB, NHTC, HPJ; Short CBAK via puts ; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

Summary of general highlights:

On the Asian Front…

Select China Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Ikang Health Care Group (NASDAQ:KANG) $19.86 $0.17 $0.13* $0.09*
Cninsure (NASDAQ:CISG) $7.34 $0.10 $0.15* $0.09*
Renren (NYSE:RENN) $3.43 -$0.07 -$0.14* $0.01*
Xueda Education (NYSE:XUE) $3.83 $0.29 $0.27* $0.28*
Taomee Holdings (NYSE:TAOM) $4.64 -$0.02 -$0.01* $0.04*
Trina Solar (NYSE:TSL) $12.24 $0.14 $0.10* -$0.53*

* denotes non-GAAP; ** Pre-market

Please see our ChinaHybrid June 2014 quarter earnings screen (password GEO2014) for select companies that have reported earnings.

In Other News…

Chinacast Education (OOTC:CAST) ($0.01) – together with its subsidiaries, provides post-secondary education and e-learning services in China.  Bloomberg article states Ex-ChinaCast Chairman sued over alleged theft of funds.

ChinaCast Education Corp. (CAST) sued its former chairman over claims he and others stole more than $150 million of the online education company’s funds and assets over a four-year period.

Chan Tze Ngon, ChinaCast’s founder and former chairman, and Jiang Xiangyuan, the company’s chief investment officer, misappropriated more than $64 million raised in U.S. stock offerings starting in 2008 by transferring the funds to companies they owned personally, ChinaCast said in a Delaware Chancery Court lawsuit.

See full article here.

GeoBargain/Specials…

Supercom Ltd Ordinary Shares (NASDAQ:SPCB) ($11.32) – GeoBargain on the Radar SPCB provides electronic monitoring, identification, and security products and solutions to governments, and private and public organizations in Europe, the United States, and Israel.   SPCB reported strong Q2 2014 results:

  • quadrupled revenue to $7.1 million vs $1.9 million in prior year; ahead of analyst estimates of $6.5 million
  • non-GAAP EPS of $0.19 vs $0.05 in the prior year; ahead of analyst EPS estimates of $0.13

Quotes from management:

“We are very pleased with our second quarter results, showing strong revenue growth and increasing levels of profitability on a year over year, as well as on a sequential basis,” commented Mr. Arie Trabelsi, President and CEO of SuperCom. “These results were built on growing recurring revenues from our ongoing contracts as well as the start of the implementation of the new contracts. We are outperforming our business plan both on a financial and operational standpoint.”

Continued Mr. Trabelsi, “I am proud of the performance of our excellent team which has realized these outstanding achievements. We remain very optimistic as we unleash the potential inherent within our growing pipeline of bids and proposals, combined with the growing demand for our solutions in both the eID and M2M markets.”

With the two large contract wins of over $47 million which the company was award this year (management stated the majority is expected to be filled by the end of 2014) and the full revenue contribution from recent acquisition of SmartID we expect Q3 and Q4 2014 to be significantly higher than Q2 2014.

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

Sincerely,

The GeoTeam