Green Packet Again

Had the following comments on my posting Green Packet Growth Story Continues: Losses Worsen!

• Bean Chun Toi said...
  Your comments really sulks.
  
  Firstly, no CEO will paint a bleak picture about their own company, esp small companies, even it is true.
  
  Secondly, as an expert analyst, you shud know that such infra company need billion to expand in the next few years. This G Packet is not only incurred losses this quarter but is likely to incur lossses next 1 to 2 years.

Chun Toi had posted comments on the blog before. I do remember his comments on a rather extremely old posting on Mieco Chipboard: VIII. Found it strange that Chun Toi would want to do that. Anyway I made a reply in a new posting, Are My Comments On iCapital Overdone?

So Chun Toi thinks my comments really sulks?

Perhaps sucks was the intended word. lol.

Anyway since I am extremely free, let me devote my time to answer Chun Toi in full detail.

Of course, no CEO will want to talk bad about their company. But what are we talking here?

CEO said that the company is growing but instead the earnings shows that it's the losses that is growing.

Is this acceptable? If you say it is, who am I to argue for it's your right of opinion.

But is it ok for you that I do not find Green Packet's CEO comments to be acceptable?

Now I wrote on Green Packet so many times before. Here's one posting More On Green Packet dated February 29, 2008. Green Packet had announced its earnings the previous day.

And some of the comments mentioned in the press were..

• "Should there be any further delays, we still can achieve triple-digit revenue growth; if not, very close," Puan said.
• Green Packet Bhd, which reported 24% higher revenue of RM122.84mil for the year ended Dec 31 (FY07), expects a 100% growth in revenue this year as its diversification plans start to bear fruit.

Revenue growth? What good is revenue growth when there is no earnings to show?

• The company's fourth quarter net profit shrank 98 per cent and full-year earnings fell 45 per cent to RM277,000 and RM30.2 million respectively, mainly because of higher operating cost at its local WiMAX business.

Of course, one can easily close their eyes and defend the company by saying that no CEO is insane paint a bleak picture of their company.

However, when the company is not doing well, earnings fell like crazy to a paltry 277 thousand but the company talks about issues like revenue growth.

Is this acceptable or is this called misleading?

Hey I am open. Let's use 'the acceptable' route. Let's assume that it is a OK and let's use the stock market as a barometer. Now assuming that the investor believes Mr.Puan's statement that Green Packet future will be very bright and buys the triple-digit revenue growth projection and buys the stock from the market.

Is this assumption ok?

Green Packet traded that day between 2.25 and 2.39.

Yeah "no CEO will paint a bleak picture about their own company, esp small companies, even it is true."

So if one bought at 2.25, look at Green Packet today. It's only at 0.845!!!!!

How? For the investor bought based on what Puan promised in the local media, how do you think the investor would feel?

And what's the alternative?

Oh dear... surely I would not know. lol

And what now for the posting More On Green Packet now?

And what about Wimax potential?

On 16th March 2007 I wrote WiMax.

• So how big is the piece of cake? Anyone? What's the potential earnings?
  
  At 0.93, ytle is valued at 1.181 Billion.
  At 0.815, redtone is valued at 216.788 Million.
  At 5.05, greenpacket is valued at 2.212 Billion.
  err... who owns Asiaspace dotcom?
  
  How???
  
  Based at current valuations... can future earnings be used as a catalyst to boost the share price of these listed stocks?

Green Packet at 0.845 is only valued at 337.945 million!

This was Green Packet's announcement before they were rewarded the Wimax contract on Feb 2007. Quarterly rpt on consolidated results for the financial period ended 31/12/2006

Green Packet then had cash balances of 303 million, no debts and made some 15 million for the quarter.

On 17th Feb 2009, I wrote on a more in dept posting on Green Packet. I will re-use that posting again since the posting shows the what happened since June 2007.

I will add in some new comments in purple bold font.

............................... Perhaps not exactly on Green Packet's earnings but I am just going to do a simple look back at historical news article on Green Packet.

25 June 2007.

• 25 Jun 2007: Corporate: Green Packet: We have nothing to hide
  By Cindy Yeap
  
  Green Packet Bhd's share price ended at RM4 last Friday, its lowest for the year. In the last two weeks, the largest capitalised stock on the Mesdaq Market saw over RM444 million of its market capitalisation wiped out, and its share price plunge nearly one-fifth during the period. (comment: what's the price of Green Packet now?)
  
  Some of the losses may have been due to questions raised on the company's high level of receivables of late, causing investors to take profit on their holdings, analysts say.
  
  "While there may be nothing really wrong with the company, one can't blame investors for choosing to take profit, in the light of the recent fraud at Transmile Group Bhd," says one analyst.
  
  After all, most investors would already be sitting on healthy gains, considering that in a span of two years, Green Packet's share price has risen over 10 times from the 55 sen at which it was sold in May 2005.
  
  But at its RM4 close last Friday, Green Packet shares had fallen 30% from its all time high of RM5.75 on Feb 23. The stock last closed above RM5 on June 7.
  Should one be concerned? Will the stock continue to slide?
  
  Green Packet's CEO Puan Chan Cheong says some investors had contacted the company to check on its level of receivables, and that the company had done its best to allay their concerns.
  
  "Our stock was performing when the market was not performing. Now that the stock market is moving, some investors may have chosen to take profit and put their money elsewhere.
  
  "We understand that investors are shaken by recent news of accounting irregularities and may have some apprehension. We will continue to do our best to answer any questions investors may have. We've explained that it is not unusual to give six months' credit to Chinese companies. We've got nothing to hide. Our FY2006 accounts have already been audited and passed by shareholders at our recent annual general meeting," Puan tells The Edge.

Jan 24th 2008, GPacket expanding solutions business aggressively. Here are some highlights from the article.

• Green Packet reported a 69.8% year-on-year decline in net profit to RM6.61mil in the third quarter ended Sept 30, 2007. (comment: 69.8% decline in net profit! oO)
• On this, Puan said: “Shareholders should look at the long-term prospects and fundamentals of the company. We are very optimistic of our newest business pillar – converged telecommunication services – and foresee solid growth from 2009 onwards even as the technology matures and more WiMAX products are made available. (comment: long-term prospect and fundamentals? what does serious decline in net profit margins indicate? )

** Same issue. Company was doing bad but Puan continued to talk up the company prospects! **

4 Feb 2008: Corporate: Taking a chance on Green Packet. (by By Cindy Yeap) Some noteable comments.

• It is worth noting that the stock has, in the past 11 months, lost over 70% of its value when measured against its all-time high of RM7.80 on Feb 26 last year. This was in spite of the fact that all four stockbrokers polled on Bloomberg are still calling a "buy" on the stock, valuing the company at least RM4 a share.
  
  Now that Green Packet's share price has fallen almost to RM2, some investors with a long-term view are looking at the stock again. Is the time ripe to pick up Green Packet shares? Has its share price "bottomed"?
• The brokerage — whose sister company OSK Technology Ventures Sdn Bhd is a substantial shareholder of Green Packet with 16% stake — expects Green Packet to book RM49 million net profit for the year ended Dec 31, 2007. This implies an expectation that the company will make RM20 million net profit in 4Q2007. For the nine months ended Sept 30, 2007, Green Packet made RM28.8 million net profit, down 28% from the RM40.2 million made in the previous corresponding period.
  
  "We advise investors to take a long-term view of the stock, considering the interim challenges," OSK Research says.
  
  None of Green Packet's top three shareholders — Green Packet Holdings Ltd (33.78%), OSK Technology Ventures (16%) and PacificQuest (8.26%), which is controlled by its Saudi strategic partner — sold shares post its transfer to the Main Board from the Mesdaq Market on July 18 last year, according to stock exchange filings. But they have not been acquiring either. At last Thursday's RM2.50 close, it would cost the three RM350 million to buy the remaining 42% of the company not in their hands. Every 10 sen difference in share price is RM14 million. ( comments: LOL! Vested interest from OSK Research? )

Oh Cindy!

25 Feb 2008: Corporate: 'Transformation year' for Green Packet (by Cindy Yeap)

• For the full year, the company's top line will still see "triple-digit" growth year on year, but the same could not be said for its earnings. "Profits this year, we believe, will be quite stagnant due to high start-up cost, the investments into R&D, the building of human capital. We are working hard to achieve double-digit growth… we will definitely still be profitable," says Puan
• Green Packet is expected to release its full-year 2007 results by this Thursday.
  
  For the nine months ended Sept 30, 2007, Green Packet's net profit fell 28.4% to RM28.79 million from a year ago. Revenue was up 78.1% to RM99.38 million. Its discounted call service Next Global Technology Sdn Bhd (NexTel) contributed RM42.4 million to revenue but only RM14,000 to net profit so far. There is a profit guarantee that NexTel's audited profit after tax would be at least RM8 million for FY2007.
  
  However, Green Packet may have to book some associate losses from its 20%-owned investment in Singapore-based Inova Venture Pte Ltd and 29.9%-owned GMO Ltd. Based on mTouche Technology Bhd's full-year results, mTouche's 40% share of losses at GMO was RM1.2 million, implying that Green Packet's share of losses is about RM900,000. Inova made a RM8.5 million provision for doubtful debts.
• "I believe we will see a new breed of investors with different horizon when results begin to show," he says.
  
  At its RM2.43 close last Friday , Green Packet shares have slipped 69% from its all-time high of RM7.80 on Feb 26 last year. As at Feb 15, it has 3.07 million shares in treasury that it bought at an average cost of just under RM2.50 each. (comments: what is Green Packet current price?)

28th February Green Packet announced its earnings. Quarterly rpt on consolidated results for the financial period ended 31/12/2007

(comments: It had cash balances then of 242.467 million and total debts of only 3.662 million. A year ago, it had cash balances of 303.832 million and debts of only 1.090 million! How was yesterday's balance sheet? A Look At Green Packet Quarterly Earnings )

Blogged the following last year More On Green Packet

In that posting, on Business Times Green Packet aims to regain sales momentum

• "We expect sales in China to be slow during the first half, and eventually to pick up in the second half once the 3G is awarded. The delay is only a temporary setback. We expect the 3G spectrum to be awarded before the Olympics.
  
  "Should there be any further delays, we still can achieve triple-digit revenue growth; if not, very close," Puan said. (comments: ahem. aiming for triple-digit REVENUE growth! Kinda makes you wonder about net profit growth! LOL!)

On Star Business the very same day, Green Packet sees 100% growth in revenue this year

• Green Packet Bhd, which reported 24% higher revenue of RM122.84mil for the year ended Dec 31 (FY07), expects a 100% growth in revenue this year as its diversification plans start to bear fruit.
  
  Group managing director and chief executive officer Puan Chan Cheong was confident of the “achievable” target, as the company had diversified its markets to cushion the impact of a slowdown in any one region. (comments: On the back of a net profit of only 277 thousand, the CEO keeps harping on higher revenue growth!!!! oO)

May 19th 2006. WiMAX major earner for Green Packet

• “Green Packet set its five-year target last year and it wants Packet One to be a billion ringgit revenue company by 2012 and the solutions business to enjoy a lot of regional success by then,'' he said in an interview. (comments: Billion dollar revenue company!!! LOL! can make money or not? oO )
• He was optimistic of turning profitable fast because the investment cost for its WiMAX business was lower than what a company would have spent on 3G.
• The WiMAX business and an end of the delay in the deployment of 3G in China is forecast to make a huge impact on Green Packet's financial fortune.
  
  “We believe our business in China will bounce back stronger in the second half of the year. At the same time, all our other regions will start to contribute more,'' he said.
  
  Green Packet's investment schedule on its WiMAX and geographical diversification will range from the second half of 2007 to the first half of 2009.
  
  “This will push Green Packet into the next phase. And we believe profit will grow at a faster rate then,'' said Puan, who added that the company was confident of a strong double digit or even triple digit growth rate in revenue this financial year.

July 1, 2008 Green Packet expects better results in second half

• KUALA LUMPUR: Green Packet Bhd is optimistic of a better second half despite weak first-quarter performance, says group managing director and chief executive officer Puan Chan Cheong.

Here is Green Packet's most recent quarterly earnings then. Quarterly rpt on consolidated results for the financial period ended 31/3/2008. It had net losses of 2.733 million. Why isn't this fact mentioned? Instead the word 'weak' was used! LOL!

August came. Quarterly rpt on consolidated results for the financial period ended 30/6/2008

Net losses grew to 4.889 million.

The following was posted on Star Business. (Sorry lost the link)

• Friday August 22, 2008
  
  GPacket optimist
  
  KUALA LUMPUR: Green Packet Bhd, which had a weak second quarter performance, is optimistic of seeing a better second half.
  
  Group managing director and chief executive officer Puan Chan Cheong said the drop in group revenue was mainly due to the substantially higher operating cost incurred for the group’s converged telecommunication business unit. There were high marketing expenses.
  
  Green Packet posted a net loss of RM6.6mil for the second quarter ended June 30 while its revenue fell 37% to RM22.45mil.

Revenue fell 37%. LOL! Where is the revenue growth mentioned by Green Packet?

November 11, 2008. Foreigners keen to take up stake in Green Packet

• More than five foreign investors have expressed interest in taking up strategic stakes in Green Packet Bhd, which recently launched its WiMAX service.
• Group managing director Puan Chan Cheong said the parties involved were international telcos and operators from the US, Middle East, East Asia and Europe.
• “The parties had shown interest in our company, especially our WiMAX service, and we are evaluating the proposals now,” he told reporters after its EGM yesterday.

Few days later, Quarterly rpt on consolidated results for the financial period ended 30/9/2008

Green Packet reported a net loss of 10.829 million.

On New Year Eye, Green Packet plans aggressive campaign

• Puan said the wireless broadband business was expected to contribute to profits within three to five years.
• "We should see a positive bottom line maybe in five years or less," he said.

Feb 7, 2009 Green Packet set for a comeback

• Incidentally, Puan is of the Monkey Zodiac, which is deemed very lucky in the 2009 earth Ox year. In the words of a famous feng shui master: “The Monkey can do no wrong this year. Even if he does wrong, somebody else will take the blame.”

ROFLMAO!!!!

The article then continues...

• Certainly, Green Packet’s financial results in 2008 weren’t too inspiring. Its solutions pillar in China, which had always been its major revenue earner, also took a huge dip as its China clients, which are China’s mobile operators, delayed their spending as they waited for the government to issue third-generation (3G) licences.
• For the nine months to September 2008, Green Packet recorded a loss of RM17.91mil from a previous profit of RM29.88mil. Revenue also dropped 34.67% to RM62.91mil. For the third quarter itself, it recorded a net loss of RM10.29mil.
• Puan is confident that improvement will be seen in both pillars this year. With the 3G licences now issued, he expects China to start contributing positively again by the second half.

Remember positive bottom line in maybe 5 years or less.

And so Green Packet announced its earnings last night.

So how did it do?

How much is Green Packet trading nowadays?

** Yeah how much is Green Packet trading nowadays? 0.845 sen.

• Secondly, as an expert analyst, you shud know that such infra company need billion to expand in the next few years. This G Packet is not only incurred losses this quarter but is likely to incur lossses next 1 to 2 years.

lol. If I could, could I humbly suggest for you read my blog more often. I have always reminded everyone that my comments are flawed and I have never considered myself to be an expert.

So what's your point?

And if you had been reading my blog, do check out the posting on ytl-e.

http://everything27.blogspot.com/2009/04/comments-on-ytls-rm3-billion-broadband.html

Am I not aware of the massive capital required in this technology?

Am I not aware of companies like Nokia less than optimistic view on Wimax's prospects?

Am I not aware of how market leader such as Clearwire is doing now?

Am I not aware that despite the massive millions required in this Wimax business, the return is yet to be justified?

Am I not aware that of course I could be wrong? Of course I am.

ps: some folks (like me) find it rather amusing to have four companies vying for the Wimax business in Malaysia. Isn't the pond to small? And what about the Wimax operators having to compete with other technology? Does this sound like a sure-win business?

ps: when Green Packet was awarded the Wimax contract, it was a company valued at 2.12 billion in the market. If Wimax has so much potential, Green Packet last traded at 0.845. Which means it is only valued at 337.945 million!