The Guide to Investing in Stocks and Shares

Geong - Archive

Back to Company Information

TRADING UPDATE - 04 May 2010

Provided by RNS (LSE News service)

GEONG (AIM: GNG), the AIM listed China based provider of enterprise content management (ECM) software and solutions today releases a trading update on its unaudited results for the year ended 31 March 2010.

Pre-tax profits will be moderately ahead of market expectations, at approximately GBP2.3m, some 35% ahead of the 2009 financial year. The cash position has improved strongly and the Group ended the financial year with net cash of GBP6.3m compared to GBP3.6m in FY2009. Total revenues for the year ended 31 March 2010 are expected to be around GBP13.5m, down approximately 9%.

The slight decline in revenue is solely attributable to the Group's strategy of reducing low margin third-party product revenue; in contrast, the Group's own product and services business, which generates margins from 40% to 60%, grew by 16%. The Group's strategy of focusing on cash collection and margins, eschewing volume growth, is systematically progressing with overall margins having risen from 40% in the last financial year to approximately 43%.

It is Board's intention to be judicious in prioritising revenue growth and consolidate these substantial improvements at current levels as the SaaS business model is rolled out and takes hold over the next two to three financial years. Geong has an excellent product and service offering and a clear strategy to extend the Company's strong presence in banking and automotive sectors to other markets such as insurance and telecommunication which also have long-term fundamental growth potential. Geongs's "Go Deep and Broad" strategy is being rolled out in second tier cities with continuing success.

The Group continues to trade profitably, is cash generative and cash conversion is steadily improving. The Group has no gearing and an order book of GBP14m, 32% ahead of the same period last year, of which 40% is recurring revenue. Against this encouraging background the Directors are confident that the Company is well positioned to achieve a strong result for the current financial year and they look to the future with confidence.

For further information, please contact:

GEONG International Limited
www.geong.com
Tel: +86 10 5222 0999
Henry Tse, Chairman

Company Information - 11th February 2009

Geong is a Chinese company providing software for SMEs. It is quoted in the UK on AIM. There are two main products PortalAge and SmartBox.

PortalAge

This product is for customised solutions to solve specific issues of large enterprises. These solutions are for functions of content management, processes management, collaboration and portal framework.

It enables Geongs’ clients to build an easy to use and scalable external e-business portal and internal Enterprise Information Portal.

Simply this means that anyone (authorised) can use the system to access current operations and develop new applications that can best match their existing operations and integrate with new business processes.

For example if a branch office were recruiting new staff they could easily access the whole company network to see if there were surpluses elsewhere within the organisation.

SmartBox

SmartBox is an off the shelf software for solving specific management issues of small and medium sized enterprises. It can be summed up by saying it has collaboration and content management functions to direct on effective action planning. Particularly helpful to management of fast growing small and medium sized enterprises.

Customers are mainly in the Telecoms, Banking and Automobile sectors and include Shanghai General Motor, Shanghai Volkswagen and FAW Volkswagen.
Industrial and Commercial Bank of China, China Construction Bank, Bank of China, Bank of Communications, Bank of Shanghai, Motorola China, Sony, IBM, Huawei 3COM, DELL and Lenovo, Air China, Shanghai Airline, China Travel International, China National Telecom, Shanghai Mobile, Shanghai Telecom and State Power (Hebei).

In December 2008 Geong has signed eight new contracts worth GBP1.17 million (RMB11.7 million) within the financial services and automotive industries.
These include China Construction Bank (GBP600,000/ RMB6 million) and Rural Bank of Shandong (GBP240,000/ RMB2.4 million).

The China Construction Bank contract is for building a new online financial services portal, to significantly improve customer services, and the Rural Bank of Shandong contract for building a new Business Intelligence and Core Banking System.

Other contracts won include Industrial Bank of China, China Bond, Changshen Mutual Fund, Guoshen Securities, Shanghai General Motors, and Shanghai Volkswagen.
Despite these challenging times, the contract wins demonstrate GEONG's ability to strengthen their relationships with new and existing customers within these industries. Geong said Tuesday (10th Jan 2009) it signed new contracts to the value of CNY11.48 million (GBP1.15 million) in January 2009.

These contracts include a further consulting contract with a leading Telecoms solutions supplier worth CNY8.16 million (GBP0.82 million) and a contract with the Rural Bank of Shangdong to help it build a new core banking system. Valued at CNY2.98M (GBP0.3 million) this is the third contract with the Rural Bank of Shandong that GEONG has signed within this financial year.

The Company said it expects to recognise 30% of these contracts within the current financial year ending March 31 2009.

Other Information

Market Cap: £10.72m
2009 Years high/Low:34p/38p
Current price: 32p/38p
Consensus forecast y/e March 2009: Pre. Tax: £2.2m EPS: 6.4p

Accreditations

Core Supplier of IBM
Comprehensive ECM solutions
Golden Certificate Partner of Microsoft
Strategic partnership with the 5 leading software vendors in the world
Core Supplier of Oracle
The only Chinese ECM solutions supplier company listed in UK
Strategic Partner of BEA
The Chinese ECM solutions supplier taking the lead to international market
Partner of SAP

From Geong’s website www.geong.com