Tuesday, March 23, 2010

Kenfair loses a billion

Hong Kong-based Kenfair organises the two-part Mega Show every October at the Hong Kong Convention and Exhibition Centre. This consumer products sourcing fair has been running since 1992 and is a solid piece of exhibition business. That is until the owners of Kenfair’s listed company decided to get into the commodities business in China. The parent company acquired the rights to a coal mine in Heilongjiang in 2008 and renamed the listed company, Sino Resources.

Since then coal deal has gone wildly off-track and both sides are suing each other. The coal mine and its business have been removed from Sino Resources’ books and the end result is a HK$990 million loss for the six months ended 30th September compared to an HK$83 million profit in the same period in 2008. The stock has remained suspended from trade on the Hong Kong Exchange since last July.

If Kenfair's owners would just stay focused on exhibitions, they might realise that they have a solid business there.

Tuesday, March 16, 2010

Alibaba’s 2009 revenues jump 29%, net income down 12%

Alibaba.com just released its 2009 financial results this afternoon. Revenues were an impressive US$567.5 million, a 29% increase over last year’s US$440 million. Net income fell significantly dropping from US$169 million to US$148 million - down more than 12%. On the upside, fourth quarter net income was up nearly 49% at US$41.2 million. The Hangzhou crew are also sitting on a mountain of cash – US$1.1 billion. That should see them through any recession.

Ali also added 9.6 million registered users in 2009 – a year-on-year increase of 25%. The company now has 47.7 million registered users. 11.5 million on its International Marketplace and 36.2 million on its China Marketplace. The International Marketplace, which generates most of the revenues, saw registered users grow by 46% last year.

Global Sources’ share price jumped 7.5% last night on news of declining revenues. Stay turned to see what Alibaba does tomorrow.

Monday, March 15, 2010

Global Sources' revenues slip 15% in 2009

NASDAQ-listed Global Sources just released full-year results. The company posted a more than 15% drop in revenues in 2009. Total revenues dropped from US$206.9 million in 2008 to US$174.5 million in 2009. GAAP net income also took a hit, falling from US$26.4 million to US$16.1 million – a plummet of more than 39%.

Online revenues dropped from US$94.5 million to US$85.4 million, a decrease of 9.6%. Print revenues continued their steady decline, falling from US$47.6 million in 2008 to US$30 million last year. That is a 37% decrease. Exhibitions held relatively firm (US$58.2 million vs. US$55.1 million).

On the upside, CFO David Gillian was “cautiously optimistic,” but expected the first half of 2010 to continue to be challenging. The company remains in a very strong cash position with US$158.3 million on hand and no debt. That results in a current PE of just over 8 if the cash is stripped out of the current market cap of US$292 million.