Right nowQuestionIt seems to be a dilemma: in the face of the more than 300 million micro-credit users that have been attracted for more than two years, ma’s recent efforts to clarify that the charges are rumours on various occasions are only a matter of caution; however, this cautious statement of the commercialization of micro-credit has left investors holding a stake (00700, hk)。
Since 11 march, when a record high of hk$286 was reached, telecommunication stock prices have continued to decline for more than half a month, cumulatively by about 14 per cent. In recent days, telecommunications have frequently been repurchased in secondary markets, with hk$ 500 million destroyed in short trading days。
In an interview with the daily economic news journalist, there was an indication from the industry that, although repurchases usually occur when the company considers their value to be undervalued, the timing and scale of the repurchase appear to be more in order to stabilize stock prices。
Repurchase costs over hk$500 million per transaction day
As with all enterprises, the continued high expectations in the market place enormous pressure on their share prices, while generating momentum for telecommunication。
Following last wednesday (20 march), the press released the 2012 financial paper, which shows that the company achieved rmb 43,894 million in revenue last year, an increase of 54 per cent over the same period and a profit of rmb 12,785 million over the same period, an increase of 25 per cent over the same period. The market is clearly disappointed by the fact that the returns reflect a modest increase in profits compared to the increase in revenues, with the first trading day (21 march) since the publication of the annual newspaper, when the price of the telecommunication stock jumped to a low of hk$ 240, reaching a low point of almost four months, and finally receiving hk$ 252. 4, which is nearly 4 per cent lower than the previous trading day。
In fact, market concerns about the performance of telecommunication were reflected well before the annual report. Since the historic high of hk$ 286 on 11 march, telecommunication stock prices have been declining for more than half a month, cumulatively by about 14 per cent to date. On the other hand, on the three trading days before and after the publication of the annual newspaper, the data show a marked increase in the amount of evaporation, which on 19, 20 and 21 march amounted to approximately $470 million, $560 million and $830 million, respectively, or 21. 98 per cent, 33. 70 per cent and 19. 04 per cent, respectively。
In the face of falling stock prices, the information seems to be stagnating. Since the publication of the annual report, the company has been performing stock buy-backs on six consecutive trading days. On the basis of a rough calculation of the documents disclosed by hko, the daily economic news journalist found that, from 21 march to 28 march, the qo had cumulatively bought 2. 0573 million shares (about 0. 112 per cent of the issued equity capital) at a total cost of hk$509 million, with an average cost of hk$247. 3/unit. In addition, the annual report data show that cash and cash equivalents (audited) announced on 31 december 2012 amounted to approximately rmb 13. 38 billion (approximately hk$ 16. 7 billion)。
It is worth mentioning that this is also the first large-scale buy-back since the beginning of the year. It was recalled that throughout 2012, public information indicated that the telecommunication was repurchased only on 9 january and 23 may of 128,000 and 26,000 shares, respectively, at a total cost of approximately hk$ 24. 9 million, with the average cost of two repurchases being about hk$ 161 per share. This also means that repurchases over the past six trading days are more than 20 times more expensive than they were in the last year。
The daily economy news journalists noticed that, as soon as the performance disclosures were released, the german bank issued a report reducing its rating from “buy-in” to “held”. Deutsche bank expects that investment spending will be under pressure on short-term profitability, as telecommunications continues to be an investment period this year, particularly in the areas of mobile internet, overseas market expansion and e-commerce; the prospects for online games are also expected to be weak; and group e-commerce will reach 10-20 per cent of the domestic market in the next three to five years, but investment initiatives may run a loss over the next four to six quarters。
According to the above-mentioned report, the current telecommunication stock prices reflect the optimistic expectations of the market that investors want their online games business to continue to grow robustly, that micro-credit will bring tangible income and that profit margins will improve significantly; but if these “pregnations” do not become “real” within 12 months, investors should be cautious。
We believe in “deepling” processes or stock prices/
In an interview with the daily economic news reporter, li yunhui, director of blue county investment consulting, pointed out that while the commercialization of future tweets or the introduction of significant cash flows, in the short term the revenue was also at the “painting” rather than “eating” stage; in addition to the various effects on other businesses and the ability to make profit was being challenged, so the short-term impact of the glooming of “micro-trust expectations” was clear。
Lee indicated that the overall revenue boom will continue to grow this year, while the three main engines of growth will be sustained investment in e-commerce operations, expansion of online games overseas and the commercialization of micro-credit. However, while income continues to expand, profitability may also continue to decline。
It is worth noting that e-commerce revenues were the third largest source of revenue for the launch in 2012. According to the financial statements, the telecom business income generated by telecommunication includes the b2c internet business city (b2c) business, represented by easy to communicate, as well as the c2c proxy trading platform, represented by the web and the qqqq network; the telecommunication has expanded the size of b2c e-commerce transactions in several commodity categories, such as consumer electronics, and expanded regional coverage and increased investment in logistics and transaction-related infrastructure。
However, while the telecommunication company's revenues amounted to rmb 4. 43 billion last year, the maori rate was only 5 per cent. According to lee, “it is expected that telecommunication will continue this year to expand investment in electric operators' operations and to be dominated by the capture of their market share, but this will also be at the expense of profits, so that the telecommunication ratio will remain low in the short term.”
In 2012, income from online games contributed more than 50 per cent of the revenue to the launch, and in fact this sector of business has been growing in the ring for 15 consecutive quarters since the second quarter of 2009. However, after rapid growth in the first quarter of 2012, only a single-digit ring growth rate was maintained in the last three quarters, with only 0. 29 per cent growth in the fourth quarter。
In response, lee pointed out that income growth through the acquisition of offshore companies or the acquisition of overseas game copyrights would be accompanied by high costs and costs, which would undoubtedly weaken the profitability of communication。
On march 23, at the high-level forum on china’s development, maquiteng stated that it was more worrying about the lack of clarity about the current business model on mobile phones, but at the same time he pointed out that the first sign had been obtained for the call, “the (misc) product based entirely on the mobile internet has great potential, bringing together instant messaging, streaming media, and very new life skills, and indeed we see it as one of china’s best chance to move to the world. So this year, it's going to cost a lot more and invest in global replication.”
In response, it was pointed out that until the commercialization model of micro-intelligence had been formalized, the launch would continue to entail high costs for this segment of the operation, which was yet another challenge to profitability。
