Hi Gofer,
Thanks for the post. DFX is a real winner. I wish I'd spotted it earlier.
As for TOM, I've taken a look at TOM. It has been mentioned several times before. I have some questions for all on this thread on this intriguing stock (especially those owning the stock). I'm curious as to how you see investing in this company , and how you view my questions. It could be interesting to see what emerges from a think tank process.
First of all, here are the information on TOM from its website for everyone to get background information on the company. My questions and comments are found in the next post.
CORPORATE PROFILE
T S Telecom Ltd., together with its subsidiaries is a distributor,manufacturer and systems integrator of specialized
telecommunications equipment. T S Telecom's mission is to assist
telecommunication providers ensure trouble free and continuous
operation of their networks. T S Telecom offers a range of
products including advanced maintenance and monitoring
systems, and digital access equipment for telecommunication and
related networks.
T S Telecom markets its products to emerging countries in
Southeast Asia. The present focus is on the People's Republic of
China including Hong Kong, where significant growth in
telecommunications infrastructure is anticipated to continue into the next decade. Over the longer term the Company intends to expand its business to other fast growing emerging economies
with strong telecommunication demands.
Through its operating subsidiary T S International Co., Ltd. in
Hong Kong, representative offices in major cities in China, and its
equity investment in a Shanghai manufacturing joint venture, the
Company is committed to be a leading provider of maintenance,
monitoring and network access solutions to meet the demands of
the telecommunications industry in China and other emerging
countries.
THE BUSINESS
As the world's fastest growing economy, with average growth in
the last decade exceeding 10%, China offers vast opportunities
and presents a multitude of challenges. Our success in this
complex environment stems from our understanding of its
telecommunications industry and its economic climate. It also
comes from our firm commitment to be the leading provider of
network maintenance and monitoring solutions. This commitment
is reflected in every aspect of our operations, from marketing to
engineering to our product lines.
OUR PRESENCE
It is a challenge to service China's telecommunications industry,
which spans a large country. This is further complicated by the
segmentation of the industry across national, provincial and
metropolitan levels. To be effective in this landscape, we need to
be very focused in our business operations.
To date, our strategy has been to establish a strong presence in
the major cities in China. In addition to the Asia Pacific head office
in Hong Kong, we now have four regional offices in Beijing,
Shanghai, Guangzhou and Shenzhen, four of the fastest growing
cities in China. It is within these cities that we will see the greatest
near term growth and it is their telecommunication providers that
will set the direction for China's telecommunications industry.
OUR PEOPLE AND STRUCTURE
Each regional office is staffed with sales representatives,
engineers and support personnel. These offices allow us to be
more effective and efficient in sales and technical support to meet
the growing demands of our customers, and to be more proactive
to changes in the industry.
Operationally, we have three functional groups - marketing,
engineering, research and development. Our marketing group is
responsible for the promotion of the Company's products,
building customers' relationship, and ensuring appropriate after
sales support. Another key function of the marketing group is the
identification of customers' needs for new products and, in
conjunction with management and engineering, they assist in the
specifications of and search for products to fill those needs.
The engineering group is responsible for the installation, technical
support and maintenance of all equipment sold. The group works
closely with the product development group, as well as our
suppliers in order to ensure the quality and timely delivery of all
our products.
The product research and development group is responsible for
development of our proprietary products, as well as modifications
and integration of our products with third party equipment. These
products include monitoring and management software, as well as
peripheral devices that supplement the core equipment in our
product lines.
PRODUCTS
Our success is also built around strong product lines that provide
cost effective solutions to our customers. Our two main product
lines are Network Maintenance and Monitoring equipment and
Network access equipment. These products include:
1. Network maintenance and monitoring
Cable Monitoring
(i) Cable pressurization equipment
Pressurizing underground telephone cables is a standard method
used to protect cables from damage by maintaining a stable
operating environment. Cable pressurization equipment is rated
according to its capacity, reliability, noise output, and ease of
maintenance. T S Telecom's high capacity pressurization system
and mobile pressurization system are designed and manufactured
to meet the most demanding operating requirements.
(ii) Remote Cable Pressure Monitoring System (PressureView)
The system detects air leaks in telephone cables using pressure
transducers installed along the cables. On the basis of pressure
readings the system is able to isolate cable faults within meters,
thus allowing for quick and efficient repairs. This in turn reduces
costly downtime. The remote cable pressure monitoring system is
an integration of third party pressure monitoring hardware and our
proprietary pressure monitoring software. The hardware provides
automated and accurate pressure readings along cables. TS
Telecom's software provides a LAN based, user friendly graphical
interface for maintenance personnel to centrally supervise the
installed pressure monitoring equipment.
(iii) Remote Fiber Monitoring System (Fibersmart)
The remote fiber monitoring system, currently under development,
automatically checks for faults and breaks in optical fiber
networks. The system switches its on-board Optical Time Domain
Reflectometer (OTDR) to test the optical characteristics of each
fiber segment within the network. The system immediately notifies
the network operators on detection of abnormal readings. The
system consists of an OTDR station, multi-channel fiber switch,
and central monitoring software. The monitoring software
provides a LAN based, user friendly graphical interface for
maintenance personnel to centrally supervise the OTDR stations
and fiber switches installed at various nodes on the fiber network.
(iv) Remote Cabinet Access Control System (SuperLock 200)
This proprietary system protects outdoor telephone exchange
boxes or cabinets situated throughout a city against vandalism
and illegal use of telephone lines. The system locks the exchange
cabinet electro-mechanically, which is accessible to service
personnel only with the use of an individualized wireless
electronic key. The mechanism is tamper proof and not accessible
from outside the cabinet. The monitoring software for the system
allows for centralized supervision of each cabinet for authorized
and unauthorized entries, and manages the rights of service
personnel to access such cabinets within a metropolitan area.
1. Power Monitoring
(i) Remote Power Monitoring system (Powercom)
The Powercom remote power monitoring system monitors power
distribution equipment in telecommunication stations to ensure
their integrity and operational readiness. The system provides
precision readings of voltage, current, frequency, power level,
temperature and humidity of the main transformer, AC
distribution, DC distribution, backup generator, standby battery
cells, and air conditioners. The system integrates hardware from
third party manufacturers and our proprietary power monitoring
software.
(ii) Remote Battery Monitoring system
The remote battery monitoring system is designed to monitor the
operating characteristic of standby battery cells. Its high precision
data acquisition circuits is capable of sensing the slightest change
in battery voltage, current and power levels. The system
intelligently collects vital statistics such as battery charge and
discharge profiles. The remote battery monitoring system can be
used as a standalone system, or as a subsystem of Powercom.
The system features hardware from third party manufacturers and
T S Telecom's proprietary battery monitoring software.
2. Network access equipment
a. Universal Digital Loop Carrier System (UDLCS)
The UDLCS is a modular and configurable network access
equipment which extends the functions of the central switching
system to remote locations providing various types of
communication services (i.e. voice, data, fax) to the subscribers.
The UDLCS allows the telecommunications provider to build small
cost effective stations in rural areas in place of more costly
exchange stations. The UDLCS also reduces the lead time required
to expand communication services.
Management of T S Telecom will continue to seek and develop
new products to complement our existing base of products in
order to meet the ever changing needs of our customers.
DIRECTOR'S REPORT
Excerpt from the 1997 Annual Report
We are very pleased to report that 1997 was a very successful
year for T S Telecom Ltd. - it was a year which saw sales double
and a return to a healthy bottom line. Corporate initiatives
undertaken during 1997 were geared to market and product
expansion, building and strengthening our customer and supplier
relationships, and to bring about technologically advanced
products to meet the maintenance and monitoring needs of the
telecommunications industry.
We continued to invest our resources in our primary market of
China, where substantial demand for telecommunications is
expected to continue over the next decade. During the year, we
strengthened our position in China by establishing formal
representative offices in the major cities of Beijing and Shanghai.
As a result, we now have offices in Beijing, Shanghai and
Guangzhou as well as a liaison office in Shenzhen, all of which is
coordinated out of our Asia Pacific head office in Hong Kong.
Strategically locating offices in major cities allows us to be more
responsive to key customers for sales and technical support, and
to draw closer our relationship with the decision makers on the
future direction of China's telecommunications industry. We also
continue to invest in human resources. At present, over 75% of
our staff possess college or higher education, with many staff
coming from government and telecommunication backgrounds.
In 1997, we introduced two new products to the market. The first
is a line of power and battery monitoring equipment (Powercom)
used to monitor power distribution and standby power equipment
employed by telecommunication providers. The second product,
an Universal Digital Loop Carrier System (UDLCS), facilitates
access by a telephone company's subscribers to various types of
telecommunication services. Several significant contracts for the
Powercom equipment were signed during the year, including a
US$1.3 million contract to supply the Shanghai Post & Telecom
Administration (PTA) with Powercom equipment for 33 exchange
stations in the Pudong region. We are excited over this contract in
view of Shanghai PTA's Phase II plan to install power monitoring
equipment in 150 exchange stations in the PuXi Region,
commencing late 1997. We were also successful in signing a
US$310,000 Powercom contract with the Power Supply Bureau of
Beijing. This contract represents an extension of our markets
beyond the traditional telecommunication providers. Similarly,
significant contracts for our UDLCS were signed for use in
Shanghai, Guangzhou and the province of Guangdong.
We are also extremely pleased with our investment in Shanghai
Hua Cheng Telecommunication Equipment Co. Ltd. (SHC). In
August of 1993, we made the strategic decision to acquire a 30%
interest in SHC. The company, which manufactures corrugated
ducts for underground telephone cables, cable pressurization
systems and other related telephone equipment, continues to
show strong growth. In 1997, profit and earnings were up 70% and
58%, respectively, over 1996 levels. In addition, with SHC's other
investor being a subsidiary of the Shanghai Telephone Bureau,
we have benefited from the relationship in accessing the large
telecommunications market in Shanghai.
In the fourth quarter of fiscal 1997, we submitted a tender to Hong
Kong Telecom, the largest telecommunication provider in Hong
Kong and a subsidiary of Cable and Wireless in the United
Kingdom, to acquire one of the divisions responsible for
maintaining the pressurization of their telephone networks. We
were awarded the tender in May of 1997, and subsequently
established our Cable Pressurization division in June. Although
contributions to revenue are not expected to be significant in the
immediate term from this new division, the contract has increased
our profile among other telecommunication suppliers. It positions
us well for future maintenance contracts and, equally important, to
be the provider of maintenance and monitoring equipment for their
network operations.
In the latter part of fiscal 1997, additional resources were
committed to Superlock(, a line of telephone line security
monitoring systems acquired in late fiscal 1996. Further efforts will
be made in fiscal 1998 to bring this product to commercialization,
including the possibility of strategic partnerships with local
companies in China.
Encouraged by our achievements in 1997, we now look forward to
the year ahead with tremendous enthusiasm and anticipation. We
are confident that our ongoing commitment to strategic planning,
marketing, product development, after sales support and
customers focus will ensure solid growth for the Company in the
years ahead.
We wish to express appreciation to our employees for their
contributions to the Company's success in 1997. We know that
their efforts will bring about an even better 1998. Finally, we would
like to thank our shareholders for the continued support and
confidence in the future of T S Telecom. |
