GZGT - GuangZhou Global Telecom, Inc. Message Board

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Technology Stocks : GZGT - GuangZhou Global Telecom, Inc.

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From: jmhollen	7/13/2009 5:09:13 PM
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Borrowed from elsewhere: .. GZGT has a much stronger financial than a lot of OTC and Nasdaq stocks out there. GZGT Total Current Assets: $5.9 million (cash of $1.3 million alone) Total Current Liabilities: $4.2 million Total Long-Term Liabilities: $1.4 million Total Assets: $6.8 million Goodwill: $215K (only) Revenue for 1st. qtr 2009: $11 million Net Loss for 1st. qtr 2009: $708K Net Cash Flow: -$406K Total Revenue For Fiscal Year 2008: $44.8 million Total Net Income: -$283K Remember the 4th qtr 2008 and 1st qtr 2009, businesses across the globe took big hits. Lots of companies made cuts and that costs money to do some cuts because you have to compensate those you lay off and for office closing costs. If you notice, GZGT has current assets that can cover current liabilities and long-term liabilities. Most companies on OTC and Nasdaq can't say this. They usually have a very large portion of current liabilities and long-term debts that is larger than the size of current assets. This alone shows how strong the financial health of the company is. If GZGT was on Nasdaq, this company will be traded in double digits cents because it valuation will be closer to the industry model. Industry If one to evaluate PPS based on Price/Sales ratio, the avg industry P/S is 0.98 GZGT has book value alone of $0.0129 a share based on the balance sheet. Current O/S: 77 million shares. Current Portion of Convertible Debenture: $1.93 million Current Warrants of 156 million shares: $0.015 a share - if the holder of debenture wants to execise warrants, they have to pay $0.015 per share to the company. What do you think they will expect price to be to buy for those 156 million warrants at $.015 a share? If I were to do so, I would make it absolutely no doubt that I will make profit selling 156 million shares into the market. That means I will want to see PPS at least 4X more than .015. That will put it at .06 a share. PPS based on P/S ratio GZGT has sales of about $43 million in fiscal year 2008. With 77 million O/S What PPS should be using .98 P/S ratio? Based on 77 million shares = 0.98 x $44 million)/77 million shares = $.56 a share. YES $0.56 a share based on industry P/S and 77 million O/S. With $1.93 Convertible According the the filing, GZGT has a newly agree arrangement when deal with convertible. The current portion of $1.93 million if to convert it will be after July 31, 2009 when the debt is become dued. If this debt is to converted, the debt holder will no longer enjoy 18% yearly interest rate. If to convert, it will be either $0.015 a share or 80% of the min closing bid price during the 20 Trading Days immediately prior to the applicable conversion date (subject to adjustment). It looks like if the Debt holder to convert $1.93 million it will be at .015 a share giving that PPS will be traded at least bid of .018 a share 20 days prior to conversion. $1.93 million/.015 a share = 128 million shares. So total possible shares after this debt serie = 205 million shares. What PPS should be using .98 P/S ratio? Based on 205 million shares = 0.98 x $44 million)/205 million shares = $.21 a share. YES $0.21 a share based on industry P/S and 77 million O/S. WE ARE TRADING AT .012 A SHARE. China market is big and growing. You can see this in the company 10-Qs and 10-K. The company is capturing more market shares. Telecom industry in China is huge and growing fast as more areas of China are opening up to the modern world. ,

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