Technology Presents from China
12/22/2006 12:00 am EST
Known for his stock-picking prowess, Coolcat's Kevin Kennedy uncovers an interesting technology company providing cutting-edge products in several diverse markets. In a recent newsletter, he alerts subscribers to a new buying opportunity in the company's shares.
"CDC Corp. (CHINA NASDAQ) provides enterprise software applications and services, mobile applications, online games, and the Chinese portal China.com. The CDC family of companies includes CDC Software, focusing on enterprise software applications and services; China.com, providing portals for the greater China markets; CDC Mobile, which is focused on mobile applications; and CDC Games, which offers online games.
"CDC Software's solutions are used by more than 5,000 customers worldwide within the manufacturing, financial services, healthcare, home building, real estate, and wholesale and retail distribution industries. CDC Software's product suite includes Pivotal CRM (customer relationship management), c360 CRM add-on products, industry solutions and development tools for the Microsoft Dynamics CRM platform, Ross ERP (enterprise resource planning) and SCM (supply chain management), MVI real-time performance management, IMI warehouse management and order management, Platinum China HR (human resource), and business analytics solutions.
"China.com is a leading Mobile Value Added Services (MVAS) provider and Internet services company operating principally in China. CDC Mobile provides MVAS products to subscribers in China. CDC Games Limited provides a diversified mix of online game assets and strategic alliances and is one of the market leaders of online and mobile games in China, with more than 37 million registered users.
"CDC reported blowout third-quarter results. Total revenue was $78.2 million, an increase of 26%, from $61.9 million in the third quarter of 2005. Total revenue from CDC Software was $61.4 million, an increase of 23%. Total revenue from China.com was $16.9 million, an increase of 42%. Earnings per share tripled to $0.09 per share, or $10.1 million, compared to $0.03 per share, or $3.2 million, in the third quarter of 2005.
"The company provided guidance for the remainder of 2006 and 2007. The revised estimates for 2006 place total revenues in the range of $303-$307 million, an increase of 24% over 2005's revenues. CDC anticipates adjusted net income to be $32.0 million to $33.3 million, an increase of more than 100% over 2005's results. Fiscal 2007 revenues are expected to be $401-$411 million for fiscal 2007, an increase of 31%-36% over 2006's estimated revenue range. The company anticipates adjusted net income of $55-60 million in 2007. Future plans include an initial public offering of either CDC Software or CDC Games and a continued emphasis on acquisitions.
"The stock is working on a five-month win streak, including a 41% surge in November. CHINA recently fell 5%, giving pullback buyers a fresh look."