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Highpower International, Inc. (HPJ)

NasdaqGM - NasdaqGM Delayed Price. Currency in USD
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4.50-0.10 (-2.17%)
At close: 4:00PM EDT
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  • R
    Rand
    Rand
    Looking at where we are at with Highpower at this juncture. I'm going to bullet my thoughts for convenience sake.
    -Highpower has conceded that growth going forward for the remainder of 2017 will drop to approx. 15% from 40%+. Not a positive development.
    -Management all but admitted that they are incapable of raising capital through US investors. No interest from them in the Highpower story. Roth conference was clearly a bust. It's a sad day when you can't raise money from the US investment community that is currently hungering for high value companies in an overvalued market. Seems to be zero confidence. Not a positive development.
    -Sunny Pan admitted there will be a capital raise through an equity offering 'when the time is right', but they have NO PLANS right now. So we have an admission of dilution in the future, but there are NO PLANS right now which indicates it's not going to happen any time soon. Could Sunny Pan have been more clear. He might as well just come out and said that the company believes their share price will wallow at very low valuations for a year or two until gradually increasing numbers roll in organically which will force a higher share price with or without the Nasdaq's blessing, and this is why there will be no equity offering any time soon. All this tells me is that Highpower management is resigned to the share price remaining below 5 dollars for the next year or two. Isn't it coincidental that Ma was blowing out as many shares as he could get to market over $5. And then Li wanted a taste of that action as well until Pan shut him down with what had to amount to 'incentives' which I assume were lucrative. I believe Ma knew well in advance that Highpower's share price was on the cusp of stagnation and this is why he liquidated with conviction.
    -Global markets are getting more volatile and overvalued by the day. Eventually we will experience a correction or outright market crash which will send HPJ into free fall along with all the other equities. In all likelihood, Highpower will be punished harshly and severely, being a unloved 'Chinese' company. Extremely unfair but that seems to be the way HPJ is valued in the investment world. No respect. Garbage gets as higher valuation than HPJ.
    -Michael Fitzsimmons on Seeking Alpha remains quiet regarding HPJ. In the past he has been very proactive in promoting the company. Now he is very quiet. Michael is a great guy and I mean no disrespect. Just curious as to why he is taking his time commenting on the Q2 earnings report.
    -George Pan essentially admitted that they are in organic growth mode because they can't raise capital from outside their ability to borrow more money or draw from earnings. Really George? If George's earnings growth numbers are real, why wouldn't US investors be pulling out their wallets faster than you can snap your fingers. Something doesn't seem quite right with all of this. On top of that, Pan also threw out additional revenue gains of 300 million dollars in 3 years, effectively doubling output. And still now interest from US investors. Really? I wonder why.
    So those are some of my thoughts at this point in time. It's very difficult to make a case to invest in HPJ currently as I believe it is simply dead money for well over a year. After the Q2 report, it was summed up nicely by management that growth will drop to the 15% range for the remainder of the year. This will do nothing for the share price outside of contribute to further stagnation. We also have the continued pressure from rising commodity prices weighing down on the company as well. I'd love nothing more than for someone to dispel my pessimism but I am at the point of resignation to the fact that Highpower is just one of those companies that can and will perform on paper, but get no respect in it's share price. Opinions warmly welcomed.
  • f
    fred
    fred
    I just listened to the cc and read most of the comments from earning day until today
    @elpj the robot contract was to bring 4 millions in 2017 and 11 millions in 2018. I do see 220-225 millions revenue in 2017 like you. I will let you estimate EPS. We seem to be trading comfortably in the 6 PE range with forays in the 7 PE. So if you estimate
    1 dol EPS for 2017 we are looking for 6 to 7 dol share price in 7 to 9 months.
    @Rand the best time to sell your shares will be in sept week 11 thru 15. Like ELPJ I was hoping for a 15 to 20% growth in q3 and that is what we are getting. 60 millions or so. If you cannot wait 9 months for a 50% gain from here then sell hopefully 20% from here. You are definitely depressed with HPJ volatility. I learned to accept it and buy when the blood is flowing in the street.
    @all : from the cc not mentioned so far here was the capacity utilization which will grow from 81% to over 90% in q3. I definitely heard 200 to 300 millions GROWTH in 2-3 years. I think we will max out our giga factory then. It was nice to hear 3 new callers asking questions. Since a MF added more shares I am glad that some of you also added. I actually bought some sept. calls sp 5 banking on the investors conference scheduled for SEPT 10-12.
  • J
    Joseph
    Joseph

    iRobot -

    iRobot’s sales were up a bit more than 25% in the first six months of the year.

    The reviews of the different versions of the Roomba on Amazon range widely, from loving it, to problems with the battery, ...

    http://www.marketwatch.com/story/the-wild-mystery-ride-of-roomba-maker-irobot-2017-08-11?siteid=yhoof2&yptr=yahoo

    The wild mystery ride of Roomba maker iRobot
    A once obscure robotics company known for robotic vacuums has seen its stock gone on a wild run that is even more perplexing than trying to use a Roomba without getting it stuck on your area rug.
    www.marketwatch.com
  • E
    El Paso Jet
    El Paso Jet
    From transcript: And in 2018, we estimate that the customers’ demand will grow very fast and we plan to use our operational capital, including the bank loan, to expand our production capacity for the lithium-ion battery. And we estimate two to three years, state-by-state expansion that – after the expansion, it will bring us about $300 million growth in sales revenue.

    In 2018 we plan to use our operational capital, including the bank loan. Does that means equity fund raising will not be done this year for sure. All revenue from EU, US & Latin America are collected right away per 10K, if these revenues continue to pick up. There will be positive cash flow if CAPEX spending is at a $2,5MM pace per quarter. Looks like the might abandon the dilution idea to raise fund quickly. Majority of the loan is to finance receivable and inventory which banks so far are very comfortable with HPJ since the bad debt write off is slow to none.
  • c
    chris
    chris
    Question what benefit is there for Pan to stay a public company in America for that matter? With the roadmap the company has and the general direction China is taking with EV I figured he could find a buyer in the mainland. He could work a deal to get a premium on the current stock price and still maintain control of the company. I don't feel this is far fetched. Why look to U.S. investors when you can make a deal in your own backyard? Let's face it american investors (big boys) no matter how pretty the box is doesn't seem to care to get mixed up with this small Chinese company. This is the reason the stock trades like it does. No care and no trust = stay away. For them I suppose they feel like they don't have the leverage they would on an american company. The company keeps producing so the share price has risen very slowly to the 4's. If this was an American based company it would be 12-15 dollars per share with analyst coverage.
  • E
    El Paso Jet
    El Paso Jet
    Pan said, "And in 2018, we estimate that the customers’ demand will grow very fast and we plan to use our operational capital, including the bank loan, to expand our production capacity for the lithium-ion battery."

    Sunny said, "So, I think in coming quarters, we believe the cash position will be better than commented and our debt result also can be improved. But still, I think for the long-term, we still think the cash is also very important for our – also we think some equity financing is required at the right period. But I think it's for the long-term. But currently, we have no this kind of plan at this moment yet."

    HPJ doesn't need fund raising in 2017 & 2018, Pan mentioned his expansion plan stage by stage will generate $300MM additional revenue when finish (a set plan). We already knew HPJ have physical plant that can produce $400MM to $500MM in revenue. That means fund raising is needed in middle of 2019 to build new plant to continue their capacity expansion.

    That will be two years from now. Sunny also mentioned that HPJ already got used to expansion through internal generated cash flow, external money (no clear mention of the source, my guess it is through account payable) and bank loan. I conclude that there will be no equity fund raising needs for the next 18 to 24 months, EPS have a good chance to go over $1/share (Pan said utilization rate will climb to 90% that will bring in higher margin and more production), and revenue will grow ever higher in 2018 at 32% (Pan already in talk with clients for next 2 years' production). We are currently trading at a forward PE of less than 4.

    Do US investors know how to add and subtract? They actually come to a conclusion not to BUY more HPJ at current price but SELLING them at a loss instead?

    Can anyone tell me what am I missing here?
  • E
    El Paso Jet
    El Paso Jet
    I just got some at $4.30 I have placed last week.
  • R
    Rand
    Rand
    Still no transcript of the Q2 call (at least I can't find one) as I wanted to fact check, so let me put this out to the board. Was I correct in interpreting Pan's comments on Q3 and Q4 revenue growth coming in at 15%? This would indicate a slowing growth rate, hence to drop in share price. Thoughts?
  • R
    Rand
    Rand
    I'm just talking out loud here but we still (and never will) don't know why Ma & LI sold above $5. I sincerely don't mean to beat this point to death, but it seems to be more than a coincidence how we hit the high around 5.25 yesterday and down she went. And after an incredible earnings report. Now at 4.45. What is it that Ma and Li know? Will leave it there and I promise to 'try' and not bring this up ever again. Simply a waste of everyone's energy discussing it. I'm quite honestly very disappointed that we didn't see more buying interest above $5. Seems like the MM was giving the market a chance to step in when the price was locked down at $5.05 for a while but we didn't get the catalyst. Institutions simply do not want to participate in Highpower at this juncture for whatever the reasons are, and there are reason. What they are remains the question. My hope is that something dark isn't going on behind Pan's curtain. If it is, I honestly do not see it.
  • R
    Rand
    Rand
    Good evening El Paso, Do you have any expectations one way or another on the China July industrial output, retail sales, and fixed asset investment data due out in the next couple of hours.
  • R
    Rand
    Rand
    Unbelievable. I've witnessed some 'crazy train' moves in stock prices but today's takes the gold star in respect to Highpower. It is clear that there is a complete and total disconnect between the companies actual value and what the share price trades at. These are two separate worlds. It's up to Pan to build a bridge between the companies true value and the reflected market valuation. We need some big money to take a position here and analyst coverage. Until then, HPJ equity will be the traders 'play thing'. For fun, take a look at KNDI (another Chinese company). Their earnings came out on Wednesday. Observe what happened to the share price in respect to their earnings report. Then compare what has happened today to HPJ after their earnings report. Compare both the companies financials along with the quality of their earnings report. Simply mind blowing how Highpower is valued. I'm starting to believe a lot of investors sell and move on from Highpower not because they don't believe it's a company with a bright future, but rather they simply grow quickly tired of the way it trades. Very sad actually. Pan needs to fix this problem and soon, or the share price will continue to struggle.
  • G
    Gukaso
    Gukaso
    I was in the middle of a very good observational post when I accidentally close the window and could not end up finishing the post. Maybe sometime in the future I will try again. However, for now I will just say that good things await this company and it's stock.
  • G
    Gukaso
    Gukaso
    interesting... net income is $4.4 mil which is more than the $3.5-4.1 preliminary results they had announced... we are now at .75 trailing twelve month EPS compared to .59 as of yesterday.... do the math.
  • c
    chris
    chris
    EPJ good day to add JD?
  • J
    Joseph
    Joseph
    11:15 - Well, I guess the joke is on me [you, too?]. The stock price is just lying there. Unbelievable!
  • E
    El Paso Jet
    El Paso Jet
    Just bought some HPJ.
  • c
    chris
    chris
    Good luck to everyone tomorrow. I hope we get continued optimism. I think we get good results and continued reason to be bullish but I think the game changing news is still some time away. I look for a slight bump at the open and then a sell off back to the 4.50 4.90 range. I hope I am wrong but a likely scenario in my eyes.
  • R
    Rand
    Rand
    EPJ, Are you surprised on any level to see the share price drop as it has today on such thin volume? As you were purchasing above $5 yesterday, I have to believe you were convinced we were heading higher. What are your thoughts on the pull back today, and when is this going to break the shackles that bind in terms of HPJ being the traders 'play thing'.
  • R
    Rand
    Rand
    EPJ, (relevant to our prior exchange re: KNDI) Well, KNDI earnings came out today. Not the best of reports. I do not own any shares but am watching the company as it is a major EV player. This is directly relevant to HiPower as Kandi is a Chinese based company, and there are a few things to be learned by reading the KNDI story. The chart is a true example of a major train wreck and the bad news continues. Highpower shareholders have the inverse situation in their holding. We have a company that continues to deliver, chart looks mighty fine, prelim earnings numbers are once again stunning, and the company remains 'optimistic' looking out for the remainder of 2017. Additionally, I have not found anything that actually 'catches' management in a lie. They may be less than forthcoming with information as in the Ma/Li/management musical chairs event, but not deceptive. I think we are good to go here. Once prelim Q2 numbers are confirmed tomorrow with a sprinkle of optimism going forward, I have to believe the share price moves up. I am anxious to see what shakes out tomorrow. Of course, I'm ready to embrace any disappoint that may come, but I simply don't see it. My only concern goes back to Ma and Li selling above 5 dollars and what their actions were based on in reality, but at this point I put very little weight on that concern. Chalk it off to an 'anomaly' so to speak. Best of luck to all and here's to a record setting Q2 for Highpower and it's shareholders.
  • c
    chris
    chris
    EPJ buying opp in zto today? Thoughts?