D3W sinotel techologies ltd.

Referred to NextInsight article on Sinotel ( www.nextinsight.net/content/view/1254/60/ ) SIAS Vice President said: Roger Tan (Vice-President, SIAS Research): I’m not helping Sinotel but the decison of the business falls into three parts – investment, financing, and dividends. First thing to decide on, is whether what they are investing in - is it giving sufficient returns? If they are getting sufficient returns, they will get financing for the business. What should they finance with: equity or debt? What they are saying is, if my PE ratio is only 3 – in other words, if i take one over 3 is 30 over per cent – if I go to the market and issue shares or do a rights issue at that kind of PE ratio, I\'m taking from the market at a cost of 33%. But if I borrow from the bank, it’s, say, only 5%, and I’d be saving a lot of money. Can anybody enlighten me what he meant by saying right issue cost 33%? What the methodology behind the calculation?? Thanks

yl999: textbooks typically equate earnings yield with cost of capital. earnings yield is simply the inverse of the PE Ratio. so, Roger was taking the PE ratio as being 3, so the earnings yield is simply the inverse of 3 = 33%. And 33% is the cost of capital.

The Board of Directors of Sinotel Technologies Ltd. (“Group” or the “Company”) is pleased to announce that the Company has obtained an increase in credit facility granted by the Development Bank of Singapore, Beijing branch. The increase will avail the Company to an additional RMB30 million, bringing the total facility from DBS to RMB65 million. The enlarged facility will give the Group additional working capital resource to fund new and on‐going projects. As this facility is revolving in nature, interest will only be charged on the amount utilized. **** i think this means DBS has confidence in giving out the loan as it believes there is a solid business. info.sgx.com/webcoranncatth.nsf/VwAttach...lity.pdf?openelement

Posted by \'Provocateur\' at www.shareowl.com : Tue Jul 21, 2009 10:09 pm

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The founder and Chairman is only 36 years old. The whole senior management team is young and savvy like the founder. They are energetic and adaptable and quick to learn new technologies and respond to the market place. But why many analysts are still hesitant to call for a buy on this stock, I don\'t quite understand. Maybe it is their dependence on 2 main customers, China Unicom and China Mobile and they take 6 to 12 months to pay Sinotel. But according to Ben Ng, the no of players like Sinotel has shrunk from a few hundred 5 years ago to only around 70 currently and hence there is more work to be handled than the limited no of players. The steep increase in working capital with business expansion is also creating barriers for the entry of new players. So far Sinotel seems to be able to deliver. But the present exponential growth in orders will pose new challenges for Sinotel and their rivals. That is why the PE is low. But generally, I would think there is considerable upside but the attendant risks are also there. This stock is also subject to heavy profit taking whenever the share price has climbed considerably. One way is to have a small core holding and additional shares for short term trading.

Comment by Sebastian Chong at www.shareowl.com : ))) Congrats, shuishui. Today\'s price of 40 cts represents only about 4 times PE which is still cheap. The EPS for Q3 and Q4 should be much higher than Q1 and Q2 because work in progress at 30 June are stated at cost and no profits are recognised till they are completed in H2. Also order books will grow into next year etc because the switch to 3G and higher is China wide and can\'t be finished in just 1 or 2 years. This is a likely multi-bagger but we are not asking investors to put everything into one basket. Main customers are China Unicom and China Mobile, two of the 3 telco giants in China and as such I don\'t think the risk is that high and why should the 36 year old major shareholder run away with your money when there are lots more money to be made by Sinotel in the years to come. But as to whether he is the type to speculate on personal finance like the founder of Sino-Environment, I am not in a position to comment. There is considerable risk in all small caps. Just invest with prudence.

apparently Kim Eng Securities has a new report with a target price of 51 cents. Anyone seen it?