GINSMS (GOK.v) Raymond Richard, Corporate Secretary, (450)466-2621
Corporate@ginsms.comWeb site:
www.ginsms.com
Went public at the end of 09. Founded in 2002.
GIN is a Hong Kong based technology company, one of the only two companies offering Inter-Operator SMS (IOSMS) service to telecom operators in Hong Kong.
GIN is servicing all mobile operators and Mobile Virtual Network Operators (MVNOs) in Hong Kong as well as the two largest mobile telecom operators in China through business alliance. The company charges mobile telecom operators on a usage basis for inter-operator transmission of SMS within Hong Kong. The IOSMS gateway has the capability to handle GSM, CDMA, PHS and fixed line SMS transmission. It is superior platform to cope with Inter Operator and International SMS business for today and beyond.
The pros
- Profitable 7 of 8 past quarters
- Q3 EPS= +93k, Q2=+95k, Q1=+34k (9 months = +.01$/share)
- No long term debt
- Gross margin about 70%
- Net margins about 45%
- Free cash flow positive
- Working capital = +758k (+.02$/share)
- Book value = 1.5M$ (or .035$/share – no goodwill and intangibles)
- Current Market cap about 2M$(july 26th 2010)
- 43.3M shares outstanding; Insider ownership about 70% (excluding family and friends)
- Insider buying @ .15$ dec. 2009
- No lawsuits that I am aware of
- Salaries are not a problem
The cons
- Needs more revenues; marketing campaign underway
- Illiquid but they recently hired Pinnacle Communications as IR
- CITIC 1616 is the dominant player, but could perhaps swallow GINSMS if they become a nuisance
What makes this company interesting in my opinion?
Having installed a new system capable of handling 10 times more traffic, the recent IPO financing should allow marketing spree to increase revenues. Per Q3 MD&A page 14, their operating expenses hover around 22k/month. For those who like Boyuan, Paul Law the CFO is a director of GINSMS. The company only has one competitor to deal with, but it’s a strong one: CITIC 1616. Short text messaging is cheaper than cellular calls, one of the reasons why it is booming in Hong Kong/China. Net margin is the key factor for this stock, which could drive earnings if they secure more business in the coming months. The company recently hired an investor relation firm(Pinnacle Communications) which has yet to prove its merit.
P.S. The above is simply my personal understanding and not to be construed as investment advice. I’m not a broker, promoter, director, manager or employee of the aforementioned company, just a shareholder. Do your own due diligence. Typos could have occurred. 
