http://www.lombardipublishing.com/ads/cl/index.asp the China Investment Letter: This company in China is gaining 4 million new customers every single month. We're confident this stock could double in one year and at least triple your investment within two years. This opportunity is similar to Microsoft back when it was a new, fast-growing company. Its stock turned $5,000 into $1.8 million.
Microsoft just signed a huge deal to help this small Chinese company sell its software!
Microsoft is licensing mobile picture-viewing and video compression technologies to Comtech (COGO), a Shenzhen-based company that designs cell phones, telecommunications equipment and consumer gear used by both Chinese and multinational electronics makers. Another company, Talkweb, is getting licensed access to a technology that lets people upload their photo to a Web site and create cartoons of themselves. These cartoons can then be sent to a phone or other mobile gadget using a multimedia messaging service.
This one is a tough sleuth, as Microsoft has signed deals with practically every Chinese computer company. A Google search of this is enough to make your head spin. The two clues that really help is "Blue chip stock" and "4 million new customers each month". The only blue chip I can think of that can gain 4 million new customers each month is a mobile phone company. Therefore, my best guess is China Telecom Corp. Ltd. (CHA)
The tease did say software company, so I could be wrong. but here's a snippet from an article I found:
"Microsoft is set to expand its reach in China after signing a deal to develop instant messaging (IM) software with China Telecom. China Telecom is one of China's largest communications companies and owns the world's biggest fixed-line telephone network. It also hopes to boost its number of mobile users from 43.2m to 100m by 2010 in a bid to compete with market leader China Mobile."
These numbers would line up with 4 million new subscribers each month.
CHA is not currently adding 4 million new subscribers a month, but China Mobile is, and it also has a deal with Microsoft. It's definitely a blue chip. China Mobile has the greatest growth potential among emerging market telecoms, according to analyses that I've read, though it is facing tougher competition than many others. It is definitely not a small company, however, so this is probably not the one.
WWP, You are probably right. The tease does state it's a software company, which would eliminate my guess. But I do think it must be something related to mobile phones or an internet service provider. Who else would be signing up that many each month? Seriously, the Google results were ridiculous. Microsoft is everywhere in China.
Microsoft does have a deal with CDC (ticker symbol CHINA), which I used to see touted as the next Microsoft of China, but I don't see how they could be getting 4 million new customers a month. Maybe it's a software company that has a deal with China Mobile as well, so it could be piggybacking. CDC has a deal with one of China Mobile's subsidiaries. But that's really stretching it.
I read a few similar articles before I concluded that the tease was for COGO. The 'clues' are misleading because some can be interpreted multiple ways. For example:
Microsoft just signed a huge deal to help this small Chinese company sell its software!
I think stockcrazy must be correct. I looked at Microsoft's home page and found that they have 43 "embedded" partnerships in China, but COGO is the only one traded in the U.S.
If this is COGO, it's all story because the numbers don't look so hot. Their profit margins, return on equity and return on assets are poor compared to other Chinese companies on the fast track.
Everyone is assuming this is a consumer and not a business product. What if the end consumer is a business. 4,000 new users per month is not a lot in China
COGO also showed up on a Fallen Angel 'Lite' list. This is the COGO-specific comment:
"I'm not sure I like this company's new name (it used to be called Comtech) but I do like its business. This China-based firm serves contract manufacturers by designing modules they can use in their products, which thus far have primarily been in wireless communications. Interestingly, though, it gets recurring revenue. Part of the arrangement requires its customers to make the modules using components they buy from COGO.
Yes, yes, yes, I know handset demand is iffy and prices are under pressure. But looking at the big picture, is anyone arguing with a straight face that product evolution in this area is even close to winding down? As is usually the case, the major growth opportunities of the next decade are likely to be things we don't yet know about. But to the extent we can mine existing fields for forward growth ideas, wireless probably remains a pretty good choice.
The company is talking about expanding into other areas. (That may be why they changed the name; to get rid of the Com, as in communications.) If this pans out, so much the better. But frankly, I'm satisfied with the communications exposure."
SC, thanks for all the insights and articles. Several elements fit the tease, but I'm still not convinced it's COGO. I don't see that they deal much with the end user. In fact their website talks about all 200 of their customers who they deal with, and they are the end-user retailers. Maybe someone partnered with them? I still think it has to do with cell phones. What other market can pull in 4 million people a month? Unless that teaser part is miselading.
Patches, COGO serves over 200 clients, including leading foreign OEMs and virtually every major wireless and telecom equipment manufacturer in China.
COGO is involved with cell phones:
"On July 31, 2008, the Company acquired 70% of the outstanding shares of Long Rise Holdings Limited (Long Rise) and its subsidiary, which are engaged in the provision of design and distribution of mobile phone modules."
Here's COGO's description of it's business. Sorry if it sounds like a commercial...it probably is:
"Cogo components are part of your everyday life. We can be found in almost every phone, computer, digital media device and in your car.
As a design solutions provider, Cogo procures core technologies from vendors and suppliers that produce critical enabling components. Cogo then develops application technologies around these enabling components.
Wireless Solutions
When you are on the road... we power your Cellular phones and handheld devices...
LCDs Cameras Persistent Storage Input/Output Sound System Power Supply Peripherals
Telecom Equipment Solutions
Behind the scenes, we help telecommunication firms provide services to you, transmitting voice and data through optical signals, enabling the connection of switches and hubs via PSTN, Wireless, Next-generation and Converging Networks...
PSTN Switching Line cards Optical transmitters Electrical signal processing Optical signal amplification Passive optical network
Home Digital Entertainment
Our services to you does not stop there... we are an integral part of your home providing and protecting you digital entertainment needs with patented technology and fast processing solutions...
ADSL modem FLASH storage Voiceover packet (VOP) Core router data processing Gigabit data optical interconnect Ethernet transceiver Wireless Base Station RF Module Lightning protection
Cogo helps drive the 21st Century technological advances that contribute to your increased standard of living at home and greater industrial productivity at work. In short, we can be found everywhere."
I think I will defer to your research on this one and accept COGO. I'm getting dizzy trying to filter the alternate search results. Thanks for all the input SC.
I think stockcrazy is right, and this is the company, but you should check out the fundamentals, which are shaky. The touts never seem to care about the bottom line of a company. If I were looking for a Chinese tech company, I'd check out VIT (Vanceinfo) and TSTC (Telestone), both of which have better numbers. Not a recommendation, and I don't own them, but they're on my radar screen.
I think this is also the stock mentioned by Louis Navellier in his ad for Global Growth. Here are the clues that he gives: Our Next China Doubler Five Reasons:
1. Earnings, just announced, are up by a factor of 28 TIMES. That was 133% more than the most optimistic analysts expected! 2. Guidance was also raised on both earnings and sales. 3. This small cap, $7 China wireless provider is a momentum juggernaut, attracting 4, 5, 6 times normal volume. The reason: institutions are banking in on a good thing. 4. One lone analyst covers it. 5. The company is buying back a boat-load of its own stock—another $5 million has just been allocated to the program. AND #6: Navellier Research has just ranked this little company Best Stock In The World.
COGO is a $7 stock that was $14. I'm trying to determine if the other clues also point to this stock.
Navellier gives COGO a D in his portfolio grader. That would be odd if he's recommending it. I would bet that the stock Navellier is referring to is KONG, which has been on a tear.
China launched a third-generation network using QCOM's technology on May 20. I like Qualcomm as a worldwide telecommunications play. They're active in Japan, Korea, Taiwan, Denmark, The Netherlands, Germany...everywhere.
You won't double your money in QCOM. It's not a rocket, just a nice steady business...