Fujian Star-Net Communication Co. Ltd.

[Stocker]

It just won (this month) a 100% allocation contract to provide networking equipments (switches, routers, gateway etc..) for two China Mobile's new generation state of the art data centres located in inner Mongolia. Number of servers involved is 50,000. This is considered a breakthrough as operators big data centres business were mostly dominated by Huawei, H3C, ZTE in the past.

Looks good !

Just a little earlier than this, they won a 200 millions CNY contract from Alibaba's new 25G/100G data centre. It was not publicly announced but company internal congratulation note stated this a major breakthrough.

Why was it not publicly announced ? Too small a deal under Corp. Governance  to be announced ?

[Barefoot]

It just won (this month) a 100% allocation contract to provide networking equipments (switches, routers, gateway etc..) for two China Mobile's new generation state of the art data centres located in inner Mongolia. Number of servers involved is 50,000. This is considered a breakthrough as operators big data centres business were mostly dominated by Huawei, H3C, ZTE in the past.

Looks good !

Just a little earlier than this, they won a 200 millions CNY contract from Alibaba's new 25G/100G data centre. It was not publicly announced but company internal congratulation note stated this a major breakthrough.

Why was it not publicly announced ? Too small a deal under Corp. Governance  to be announced ?

I am not sure of the reason. They seldom announce contracts from private companies such as Alibaba, Tencent, Baidu, IQiyi etc...but they did said that they have made progress into these companies and they are presently using its high end networking products at a smaller scale...But these companies will ramp up data centres at a mad growing rate in the next few years

[Stocker]

It just won (this month) a 100% allocation contract to provide networking equipments (switches, routers, gateway etc..) for two China Mobile's new generation state of the art data centres located in inner Mongolia. Number of servers involved is 50,000. This is considered a breakthrough as operators big data centres business were mostly dominated by Huawei, H3C, ZTE in the past.

Looks good !

Just a little earlier than this, they won a 200 millions CNY contract from Alibaba's new 25G/100G data centre. It was not publicly announced but company internal congratulation note stated this a major breakthrough.

Why was it not publicly announced ? Too small a deal under Corp. Governance  to be announced ?

I am not sure of the reason. They seldom announce contracts from private companies such as Alibaba, Tencent, Baidu, IQiyi etc...but they did said that they have made progress into these companies and they are presently using its high end networking products at a smaller scale...But these companies will ramp up data centres at a mad growing rate in the next few years

It is really amazing that you were able to obtain such insider's info , not bad !

[Barefoot]

Looks good !

Just a little earlier than this, they won a 200 millions CNY contract from Alibaba's new 25G/100G data centre. It was not publicly announced but company internal congratulation note stated this a major breakthrough.

Why was it not publicly announced ? Too small a deal under Corp. Governance  to be announced ?

I am not sure of the reason. They seldom announce contracts from private companies such as Alibaba, Tencent, Baidu, IQiyi etc...but they did said that they have made progress into these companies and they are presently using its high end networking products at a smaller scale...But these companies will ramp up data centres at a mad growing rate in the next few years

It is really amazing that you were able to obtain such insider's info , not bad !

Not me. The chinese guys have friends working in the company. The company does make some announcement public. Recently, they sign a collaboration with Intel to develop chips for applications in IoT. This will be future huge market. Imagine smart phone market is so big, you have Apple, Huawei when the job is connecting people. What will be the market size if you connect things up such as robots in warehouse, autonomous vehicles, home appliances, smart home, smart office, smart hospital etc...

[Stocker]

Just a little earlier than this, they won a 200 millions CNY contract from Alibaba's new 25G/100G data centre. It was not publicly announced but company internal congratulation note stated this a major breakthrough.

Why was it not publicly announced ? Too small a deal under Corp. Governance  to be announced ?

I am not sure of the reason. They seldom announce contracts from private companies such as Alibaba, Tencent, Baidu, IQiyi etc...but they did said that they have made progress into these companies and they are presently using its high end networking products at a smaller scale...But these companies will ramp up data centres at a mad growing rate in the next few years

It is really amazing that you were able to obtain such insider's info , not bad !

Not me. The chinese guys have friends working in the company. The company does make some announcement public. Recently, they sign a collaboration with Intel to develop chips for applications in IoT. This will be future huge market. Imagine smart phone market is so big, you have Apple, Huawei when the job is connecting people. What will be the market size if you connect things up such as robots in warehouse, autonomous vehicles, home appliances, smart home, smart office, smart hospital etc...

Really blessed to have such insightful info , keep them coming . Many thanks in advance !

[Barefoot]

Why was it not publicly announced ? Too small a deal under Corp. Governance  to be announced ?

I am not sure of the reason. They seldom announce contracts from private companies such as Alibaba, Tencent, Baidu, IQiyi etc...but they did said that they have made progress into these companies and they are presently using its high end networking products at a smaller scale...But these companies will ramp up data centres at a mad growing rate in the next few years

It is really amazing that you were able to obtain such insider's info , not bad !

Not me. The chinese guys have friends working in the company. The company does make some announcement public. Recently, they sign a collaboration with Intel to develop chips for applications in IoT. This will be future huge market. Imagine smart phone market is so big, you have Apple, Huawei when the job is connecting people. What will be the market size if you connect things up such as robots in warehouse, autonomous vehicles, home appliances, smart home, smart office, smart hospital etc...

Really blessed to have such insightful info , keep them coming . Many thanks in advance !

Looking at the stats and attributes of this company, I am interested to hear opinions from you guys if it is possible that the price don't react and reflect the value and growth soon.

In another, now deleted thread, someone gave the example of St****** but I think it is totally different and from a different tier compared with this. St****** growth was negative 2.5% for the last 5 years. Hospitality sector isn't a high growth sector and very cyclical in nature. Organic growth is almost impossible without huge debt incurred to acquire new hotels. That explains why the company has a load of debts. Don't need to mention land and property price appreciation because it is equally likely that land and properties value decrease.

[Barefoot]

This year, the company gain a grand entry, for the first time, into the Asia Top 500 most valuable brand with a brand value of 25 billions CNY as assessed by World Brand Lab. This is a stark discrepancy in its present market cap of 10 billions.

[opmi]

problem with vendors to PRC telcos is that have to be bankers to these SOEs, meaning big trade receivables and long cash conversion cycle.
also means cash is not 'free' cash, it is for working capital.

[Barefoot]

problem with vendors to PRC telcos is that have to be bankers to these SOEs, meaning big trade receivables and long cash conversion cycle.
also means cash is not 'free' cash, it is for working capital.

What do you mean? I think this question has been posted to the their management before. Their answer is very clear that they have no problem collecting the owed money from customers. Their accounting is same as the world. Money not collected into account is not accounted as income, cash flow or net income. I'll share with you guys its historical and projected net income for the next year. You can see that the net income started to picked up speed after 2016. Before that it was quite flat.
   

[weijian]

hi barefoot,
In accounting terms, we don't really use the word "income". Rather, we use "revenue", "net profit" and "cash flow" etc...."Revenue" is what is recognized as per accounting principles when there is an exchange of goods (invoicing done). "Net Profit" is the profit on paper after accounting for all expenses/depreciation/taxes. "Cash flow" (not free cash flow) is the cash flow after working capital changes (but before accounting for investing activities like CAPEX or financing activities like loan payments/new loans).

I don't have a good study on this company, so i just take a look at the screenshot u provided. For the last 3 years, it seems revenue, EBITBA and net profit is increasing. But "cash flow per share" ("mei gu xian jin liu") has decreased from 1.71 in 2015 to 0.48 in 2017. This seems to correlate to what OPMI means - that is, although the company is selling more (revenue) and earning more (EBITDA/net profit) is increasing, but cash flow per share is decreasing and the easiest guess for this reason is that most of these are nested in trade receivables (ie. money invoiced but not collected yet).