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China GrenTech Corp. Ltd. Message Board

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  • chickenhatsdotcom chickenhatsdotcom Nov 1, 2010 12:31 PM Flag

    Chickenhats Reporting of an Overvaluation

    Dude, you just don't get it. I know full well about the "ordinary shares" and what that signifies as far as the O/S count is concerned. Do yourself a favor and calculate the EPS based upon what the company states per guidance. I'm saying that even if GRRF hits their target, the stock is expensive, yet you keep trying to say a certain market cap makes it cheap. Revenues and market cap mean absolutely nothing and if you're questioning my success in trading with insults, I'll gladly point out to where my portfolio gains were 2,880% last year ..... right here ....... with virtually every trade contained within the posts on that board ......

    http://investorshub.advfn.com/boards/board.aspx?board_id=9383

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    • There's not one word in my comments that questions your trading skills. So why take offense when none was given?

      I haven't said anything insulting. I only questioned the wisdom of the statement that you just repeated: "Revenues and market cap mean absolutely nothing."

      So far as profit margin, that's not the only thing to consider when deciding what a company is worth. For example, just one of many items to consider when evaluating the quality of earnings is the company's investment in research.

      "As of December 31, 2009 we had 2,384 engineers and technicians on our project design and technical service team." [Annual Report, pg 29]

      Of the top "providers of wireless coverage products and services in China," GRRF is the fastest growing and is currently number two in size in China. They have 8.5% of "the total market in terms of the contract amount." [Annual Report, pg 31]

      This did not happen for free. Research and development expenditure for 2009 was $8.7 million at the 11/1/10 exchange rate. GRRF spent $10.5 million in 2008 and $8.45 million in 2007 for the same purpose. [Annual Report, pg 31]

      The arithmetic is important. It will serve you well to do it. Companies that only focus on quarterly earnings are not well run. Had GRRF skimped on research, the 2009 earnings would have been $13.49 million instead of the $4.79 million reported.