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Call(s) to Action: ISNS

ISNS ($6.40) – Covered our short position; stock has dropped roughly 30% since we alerted members of short thesis article. Moving on to other opportunities.

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

  • ChinaHybrids
    • TSL ($13.86) – Announced it will supply 70MW high efficiency modules to a large scale solar project in Chile.
    • IMOS ($23.10) – Expects Q3 2014 revenue and gross margins to be at high end of Company’s guidance.
    • LAS (2.40) – Company expects to see substantial growth in pre-owned car sales based on China Automobile Dealers Association.
    • WBAI ($35.94; marked down pre market) – Some of Muddy Waters short thesis highlights from the Value Walk conference.
    • JKS ($31.81) – Announced that 100MW solar PV power plant in Xiangshui, Jiangsu Province was connected to the grid.
    • VIMC ($5.20) – Announced strategic cooperation with Inspur, a leading cloud computing solution supplier.     (As reported in our yesterday’s ChinaHybrid news not reported in the U.S yet)
  • U.S. News
    • CURN ($13.10) – Reported strong Q3 results:
      • Sales up 80% to $6.8 million
      • Non-GAAP EPS of $0.26 vs $0.17
    • LMNR ($24.28) –  Reported strong Q3 2014 results; beat analyst EPS estimates by $0.25 and raised FY 2014 EPS guidance above analyst estimates.
  • GeoBargains/GeoBargains on the Radar
    • GeoBargain POLXF ($0.85) – Yesterday the company reported disappointing Q2 2015 results;  Q2 2015 results were negatively affected as management continues to work through equipment upgrades. The process is taking longer than we would like, but are maintaining our long position as we believe when the equipment upgrades are completed, it will allow for the company to fill larger scale orders.

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

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

Summary of general highlights:

On the Asian Front…

Trina Solar (NYSE:TSL) ($13.86) — a global leader in photovoltaic (“PV”) modules, solutions, and services, today announced,

it has agreed to supply 70MW high efficiency modules to a large-scale solar power project in Chile.

Under the terms of the agreement, Trina Solar will deliver TSM-PC14 solar modules that have an output of between 300W and 310W per panel. Shipment of the modules will commence in September 2014.

“We are pleased to have secured Trina Solar’s second agreement this year to supply modules to large utility scale projects in Chile. We pride ourselves on our ability to establish long-term relationships with our customers, especially in emerging markets such as Chile, where there is currently large demand and we see significant future potential for solar energy,” said Mr. Zhiguo Zhu, President of Module Business Unit at Trina Solar. “We are delighted with the demand we’re seeing for our high efficiency modules in South America and we expect this to continue to grow. The stable performance these modules provide in environments with high variations in temperature are very suitable for the region’s solar projects. We look forward to continuing to build long-term strategic relationships with our many valued customers as we grow our business in the rapidly expanding South American market, allowing us to further advance the realization of our diversified global strategy.”

Chipmos Technologies (NASDAQ:IMOS) ($23.10) – an industry leading provider of outsourced semiconductor assembly and testing services (“OSAT”), today reported:

its unaudited consolidated revenue for the month of August 2014, and commented on its outlook for the third quarter of 2014.

Revenue for the month of August 2014 was NT$1,954.0 million or US$65.4 million, an increase of 0.5% from the month of July 2014 and an increase of 14.1% from the same period in 2013. All U.S. figures in this release are based on the exchange rate of NT$29.88 to US$1.00 as of August 29, 2014.

Based on continued strong customer demand in both the Company’s LCD driver IC and memory segments, the Company now expects revenue and gross margin on a consolidated basis for the third quarter of 2014 will be at the high end of the Company’s original guidance. On August 12, 2014, the Company provided guidance that it expected revenue of third quarter of 2014 to increase in the range of approximately 3% to 7% as compared to the second quarter of 2014, with gross margin on a consolidated basis to be in the range of approximately 23% to 26% for the third quarter of 2014.

Lentuo Intl (NYSE:LAS) ($2.40) – a leading non-state-owned automobile retailer headquartered in Beijing, today provided an update on its strategy for the rapid and comprehensive expansion of its pre-owned car business.

According to the China Automobile Dealers Association (“CADA”), Beijing is poised for rapid growth with transaction volumes for pre-owned cars having already surpassed those of new cars. During the first half of 2014, pre-owned car transaction volumes in Beijing exceeded 345,400 vehicles, an increase of 8.7% year-over-year. The ratio of pre-owned car sales to new cars sales increased to 1.36:1. Specifically, the transaction volume for FAW-VW Audi, BMW, and Porsche accounted for 10.4% of all transactions, demonstrating the strong growth potential of high-end pre-owned cars in Beijing.

The joint venture with Bitauto and UXIN, which will originally be centered on Beijing and gradually expand to other cities as the market develops, is currently awaiting official registration approval from the State Administration for Industry & Commerce which it expects will be completed by the end of September 2014 with operations beginning before the end of December 2014. The JV will integrate the resources of each partner to build the largest online-to-offline (“O2O”) platform exclusively focused on high-end pre-owned cars in China.

Lentuo is currently in talks with major Chinese financial institutions to cooperate in adding a number of financial value-added after services which will include inventory financing, extended warranties, personal loans and will eventually expand into rentals, logistics and trade-in financing. These new financial instruments will not only provide strong financial support for the rapid expansion of Lentuo’s pre-owned car business, but will also enhance the Company’s profitability with a new high-margin revenue driver.

The Company is also well positioned to capitalize on this market opportunity as it emerges outside of Beijing. Recent statistics from the CADA show that during the first half of 2014, pre-owned car transaction volumes increased 12.77% year-over-year to 2.8 million vehicles with monthly transaction volumes exceeding 500,000 vehicles. The Company expects to see substantial growth in pre-owned car sales based on CADA data predicting pre-owned car sales growing from 9 million cars in 2014 to 20 million in 2020.

“China’s pre-owned car market is set to enter an explosive stage of growth which we are ideally positioned to benefit from,” commented Mr. Hetong Guo, Founder and Chairman of Lentuo International. “New car sales in China surpassed 13.6 million vehicles in 2009 to become the largest car market in the world. With Chinese drivers buying new cars every five years on average, 2014 is a critical year in the development of the pre-owned car market. We are confident that we fully understand the market and have correctly assessed its potential and current weaknesses. We are moving quickly to develop a first-mover advantage in this new and exciting market where profit margins are much higher than new car sales. We are confident that Lentuo’s 20 years of experience, solid reputation for quality and reliability, technical expertise, and range of value-add services and products will attract customers and provide significant and stable growth momentum going forward. We remain committed to achieving our strategic goal of developing a nationwide pre-owned car business.”

Jinkosolar Holdings (NYSE:JKS) ($31.81) – a global leader in the PV industry, today announced:

that its 100MW solar PV power plant in Xiangshui, Jiangsu Province was connected to the grid. The company has so far successfully connected to the grid for more than 300 MW of solar PV power projects.

Without farm land occupation, the project was built on the top of a 2 million square meter fish pond which is located in the coastal economic development zone in Xiangshui, Yancheng City, Jiangsu Province. It is one of the largest Solar PV projects connected to the grid in Jiangsu Province and has the highest boosting level in China. The power plant has been granted a 20-year subsidy of 1.0 RMB/KWh.

“The Xiangshui project is a landmark ground-mounted solar PV project in Eastern China with its efficient use of land and combination of fish farming and solar power generation, which is in-line with the National Energy Administration’s new policy,” commented Mr. Xiande Li, Chairman of JinkoSolar. “The project began construction in April and was connected to the grid in September. I am proud that our highly efficient team work, demonstrating our outstanding technical capabilities, construction efficiency, and strong coordination skills. The government continues to promote favorable policies and subsidies which we believe will create numerous new opportunities during the second half of 2014. Our strong financial position, rich project development experience and high-quality pipeline will ensure that we achieve our full year project development target as we work to increase shareholder value.”

Vimicro Intl (NASDAQ:VIMC) ($5.20) –  a leading video surveillance technology and solution provider, today announced

that it has reached a Letter of Intent to form a strategic alliance with Inspur Group (Inspur) to cooperate and coordinate efforts in China’s video surveillance market in the areas of solution and application development, maintenance and services, sales and marketing. The jointly developed total solutions consist of Vimicro’s video surveillance technology and solutions and Inspur’s servers and storage and its expertise in cloud computing.

“We are pleased to have formed a strategic alliance with Inspur, which will enable our video surveillance total solutions to become domestic from both the hardware and software perspective and further expand our footprint in China’s video surveillance market. As China’s leading provider of proprietary server and storage solutions, Inspur will bring to the table its industry-renowned technology in data center and cloud computing and its existing client base,” commented Dr. John Deng, Vimicro’s Chairman and CEO. “As the only proven SVAC-compliant video surveillance technology and solution provider, Vimicro will continue to capitalize on the mega-trend of China’s adoption of domestic technology and standards to establish itself as a leading player in China’s robust video surveillance market.”

On the U.S. Front…

Notable U.S. Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Limoneira Co (NBB:LMNR) $24.92 $0.40 $0.63* $0.46*
Currency Exchange (OOTC:CURN) $13.99 n/a $0.26* $0.17*

* denotes non-GAAP; ** Pre-market


Polydex Pharm Ltd (OOTC:POLXF) ($0.85) – GeoBargain POLXF engages in the development, manufacture, and marketing of biotechnology-based products for the human pharmaceutical market.  POLXF reported Q2 2015 results:

  • Sales for Q2 2015 were $1.2 million vs $1.8 million in the prior year
  • EPS of $0.02 vs $0.06 in the prior year

Quotes from management:

In keeping with Management’s commitment to maintain profitability and to ongoing facility improvements, the bulk of equipment replacement was timed for installation during the annual second quarter plant shut down. Other upgrades were necessary during the first quarter, and into the second and third quarters, affecting sales but preserving profitability. These upgrades included a new resin column and reactor, replacement of specialized pumps, and membranes for the ultra filtration system. Management is planning further upgrades and replacements to be implemented over time.

“Although our second quarter has traditionally been slower due to the seasonal decreased demand for product and our annual plant shut down for maintenance, we are pleased that we were able to maintain profitability while implementing long term planned upgrades to equipment this year,” says George Usher, President and CEO of the Company. “We’ve continued to make investments into equipment to ensure production and also carry on development of potential new products. These accomplishments will help us meet our ongoing goals and objectives to increase sales.”

Q2 2015 results were negatively affected as management continues to work through equipment upgrades. The process is taking longer than we would like, but are maintaining our long position as we believe when the equipment upgrades are completed, it will allow for the company to fill larger scale orders.

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


The GeoTeam