Thai VI

GeoTeam's Preliminary NEWN Investigation Commences
Apr 5, 2011 1:45 PM

In light of our recent discussions on New Energy Systems (NEWN) at GeoInvesting, we felt it necessary to start a formal investigation into the company's ownership structure. To preface our update, we have included a portion of the Q&A from NEWN's recent year end conference call.

Excerpt from New Energy Systems 4th quarter 2010 conference call:

Dan Lavine (Individual Investor) : Oh, congratulations on a great quarter and year. I am new to your story and hold a small position, but would like to add at current prices. So excuse my ignorance here, because like I said, I’m new to NEWN. Can you please give me some color on the shareholder tenure with respect to New Power and Kim Fai Solar pre-acquisition [inaudible]? For example, have the shareholders at Kim Fai been the same since inception?

Ken Lin (VP, Investor Relations) : I’m sorry, you mentioned the shareholder from original three subsidiary we acquired?

Dan Lavine: Yes, mm-hmm. The New Power and Kim Fai Solar, pre-acquisition.

Ken Lin: Yes, and I’m sorry – what exactly information you want to know about those shareholders?

Dan Lavine: Well, I guess for example, have the shareholders at Kim Fai been the same ever since the beginning?

Ken Lin: For Kim Fai and for those three companies we acquired, those shareholders, they are still the same shareholders as their original company.

Dan Lavine: Okay

Ken Lin: For example, Kim Fai’s shareholders have eight shareholders, and those eight shareholders is Kim Fai’s shareholders. And Anytone—I’m sorry, Anytone I don’t remember exactly, but Anytone as I remember also have eight shareholders over there, and that eight shareholders is—they are separated. There is no relationship for those shareholders, but they are—they all remain as the shareholders of each subsidiary.

Dan Lavine: Okay, thank you.

GeoTeam Update:

The GeoTeam has just obtained information indicating that Kim Fai shareholder base changed several times before its acquisition by NEWN. The last shareholder change before the acquisition by NEWN (Nov. 25, 2010, SAIC date) was only three months (Aug. 25, 2010, SAIC date) before the acquisition. Furthermore, the age of these eight shareholders, who acquired Kim Fai on Aug. 25, 2010 and sold Kim Fai to NEWN, were fairly very young at the time of the acquisition. Furthermore, the age of these latest shareholders are fairly young, arousing our suspicions that they could not have been original shareholders: The age distribution of these eight shareholders are as follows:

Pre acquisition age distribution of Kim Fai Shareholders: (8 shareholders of Kim Fai are from 19 (1992) to 30 (1981) )

one 29 year old (Born 1981) (Xiaowei Wang)
one 27 year old (Born 1983) (Yijie Li)
two 25 year old (Born 1985) (Qiongqiong Wang & Gong Wei)
two 22 year old (Born 1988) (Feng Cheng & Chunfeng Zhang)
one 20 year old (Born 1990) (Qing Xiong)
one 18 year old (Born 1992) (Di Yuan)
None of the above occupy more than 15% shares (6*14%, 9% and 7%).

Investors should begin to ask questions, as this new information clearly diverges from public statements made in the 2010 year end conference call. Now we need to ask why

"For Kim Fai and for those three companies we acquired, those shareholders, they are still the same shareholders as their original company."

We also discovered that three of these eight shareholders (Di Yuan, Qiong Xiong & Xiaowei Wang) reside in Decheng District, Dezhou City. This location coincides with the location of the current legal representative of New Power (Mr. Xiong Guofu) and the current legal representative of E'Jenie (Ms. Fang Xuemei). Two of these young shareholders (Wei Gong & Feng Cheng) appear to live in Chibi City (county), which is the same city (county) that the current legal representative of Kim Tai (Mr. Liu Qunli) and current legal representative of Anytone (Mr. Weihe Yu, the Chairman of NEWN) also seem to reside.

Meanwhile, even though Kim Tai started its business on December 8, 2005, it only changed its name and business direction to include solar energy operations after September 21, 2009 which is only one year from the acquisition deal with NEWN. At the time of these changes, the two shareholders of Kim Tai were Wei Gong (one of the eight young shareholders) (70%) and Weihai Yu (30%). Weihai Yu and Weihe Yu (the chairman of NEWN) have the same last and middle names. Based on the Chinese name tradition, it is possible that Weihai Yu and Weihe Yu are related (brothers).

Based on the Chinese name tradition, it is possible to assume that Weihai Yu and Weihe Yu are related. Thus, we would like the company to comment on this:

One year later, after these significant changes involving Kim Tai business dealings, NEWN spent USD 24 million (USD 13 million cash and 11 million restricted share) to acquire a company which appears to have commenced its solar energy business for only one year, yet claims to generate significant revenues.

Please Note:

We are still reviewing further details regarding the NEWN story, including information surrounding past management stock sales. We are also conducting a deeper review of PRC filings, originally obtained by our team, that reveals a much smaller business for E'Jenie and Anytone than what has been portrayed in SEC documents and SAIC filings recently provided by the company (we would like to know if these filings were sent to the SAT agency).

Yesterday's S-3 filing is quite perplexing.

You can follow more discussions on NEWN as well as other Chinese RTO stocks at our new boards, China Stock Talk and Ask Bob.

Disclosure: Short NEWN at time of post.

http://seekingalpha.com/instablog/36025 ... -commences

Chairman Weihe Yu of New Energy Systems Group Addresses Kim Fai Acquisition

SHENZHEN, China, May 13, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, today addressed shareholder comments and questions regarding New Energy's acquisition of Kim Fai Solar ("Kim Fai') in November of 2010.

"We have been receiving numerous e-mails and calls on Kim Fai, its value to our shareholders and our relationship with Kim Fai before our acquisition in November of 2010,"[/color] began Weihe Yu, Chairman of New Energy Systems Group. "When I was the president of Shenzhen Anytone ("Anytone"), one of the original shareholders in the Anytone business was an investor named Mr. Ruizheng Cheng. In addition to his support of Anytone and mobile power products, it was widely known amongst our investors and our management team that Mr. Cheng was also a strong believer of the solar power business and industry in China. In December of 2009, Mr. Cheng decided to invest in and develop a solar power business which he named Shenzhen Anysolar Co., Ltd. ("Anysolar"). Anysolar was, and is, primarily a sales agent which markets solar panels and equipment to select customers in China. Anysolar is not a manufacturer and thus outsources its Anysolar-branded original equipment and original design solar products to a number of third party manufacturers. Kim Fai Solar was one of such manufacturers. Seeing the quick development of Mr. Cheng's business and witnessing the continued growth of the Chinese solar power industry, I approached my board of directors in the third quarter of 2010 with a plan to enter the solar market by acquiring Kim Fai and subsequently their customer base. This customer based included Mr. Cheng's Anysolar company. The acquisition was completed in November 2010. On the date of the acquisition, the business between Anysolar and Kim Fai was very small compared to Kim Fai's largest customers. Such customers include: Heshan Jianhao Lighting Co., Ltd. and Dongguan SingfoSolar Technology Co., Ltd., which accounted for 13% of Kim Fai's business at the time and still remain the Company's most significant solar panel customers. Neither Mr. Cheng, nor any of Mr. Cheng's employees or advisors of Anysolar were, at any time, shareholders of Kim Fai. We recognize that the companies cooperated and co-marketed together on several occasions however they are two separate businesses. New Energy's acquisition of Kim Fai was at arm's length and did not constitute a related party transaction."

New Energy System Group has further filed an 8-K with the SEC, today which attached as an exhibit a legal opinion on the acquisition of Kim Fai. Guangdong Shendadi Law Firm in has issued a detailed legal opinion on the acquisition which indicates "the acquisition does not constitute a related party transaction under PRC laws." A copy of the 8-k and the translated legal opinion by the PRC counsel can be obtained on the SEC Website, http://www.sec.gov or New Energy's website.

http://finance.yahoo.com/news/Chairman- ... l?x=0&.v=1

Legal Opinion

Shenzhen Anytone Technology Co., Ltd:

Guangdong SHENDADI Law Firm is providing this opinion to you regarding the legal ownership structure of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. The firm is authorized by Shenzhen Anytone Technology Co., Ltd. (a wholly-owned subsidiary of New Energy Systems Group ) to act as its Chinese legal counsel and issue this legal opinion regarding the acquisition between Shenzhen Anytone Technology Co., Ltd. and Shenzhen Kim Fai Solar Energy Technology Co., Ltd.

In order to issue this opinion, we have examined the original documents or their copies concerning the acquisition as well as other documentations and materials that we deem necessary, including:

1. The company registration certificate and business registration of Shenzhen Anytone Technology Co., Ltd. issued by the Market Supervision Administration of Shenzhen Municipality.

2. The confirmation documents concerning the identity and change of shareholders of Shenzhen Anytone Technology Co., Ltd. issued by the Market Supervision Administration of Shenzhen Municipality.

3. The company registration certificate and business registration of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. issued by the Market Supervision Administration of Shenzhen Municipality.

4. The confirmation documents concerning the identity and change of the previous shareholders (before this acquisition) of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. issued by the Market Supervision Administration of Shenzhen Municipality.

5. The share exchange agreement dated November 10, 2010 between Shenzhen Anytone Technology Co., Ltd. and Shenzhen Kim Fai Solar Energy Technology Co., Ltd., which effected the acquisition.

6. The notary certificate of this acquisition made by Shenzhen Notary Public Office, Guang Dong Province, PRC.

7. The consent of the shareholders of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. approving the transaction.

8. The consent of the board of directors of Shenzhen Anytone Technology Co., Ltd. approving the transaction.

The Company has guaranteed that the above mentioned materials it provided are complete and authentic, that the stamps on the materials are authentic, that the copies are identical with the original ones, that all the facts and materials that would affect the authentication of this legal opinion have been disclosed and provided to us, and that there was, or have not been, any cancellation, omissions and/or mistakes of which would make any statement in this opinion misleading.
In addition, based on the laws of the People's Republic of China, we accept all the documents provided by the Market Supervision Administration of Shenzhen Municipality as authentic and valid.

Our opinion is based on all the facts that existed before the issuing date of this legal opinion, the documents provided by Shenzhen Anytone Technology Co., Ltd., our understanding of the foresaid facts, and the rules, regulations and other guiding documents in China. In compliance with our legal obligations and the principle of diligence and good faith, we have fully examined the incorporation, the present status and other related issues of Shenzhen Anytone Technology Co., Ltd. to make sure that there is no false description, misleading presentation and material omissions. After the examination of the documents and the relevant facts provided by Shenzhen Anytone Technology Co., Ltd., we hereby issue this legal opinion based upon the recognized service standards, the ethics of attorneys as well as our diligence:

1. Shenzhen Anytone Technology Co., Ltd. was incorporated in accordance with the Company Law of China, with good standing as of the date of this opinion. Shenzhen Anytone Technology Co., Ltd. currently operates and locates in Shenzhen. Anytone International (H.K.) Co., Ltd. is the parent company of Shenzhen Anytone Technology Co., Ltd. and Anytone International (H.K.) Co., Ltd. is a wholly-owned subsidiary of New Energy Systems Group) The acquisition of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. Has already been duly approved by the Board of Directors of Shenzhen Anytone Technology Co., Ltd.

2. Shenzhen Kim Fai Solar Energy Technology Co., Ltd. was incorporated in China in accordance with the Company Law of China. Shenzhen Kim Fai Solar Energy Technology Co., Ltd. is currently located operates in Shenzhen, China. As of the date of this opinion, Shenzhen Kim Fai Solar Energy Technology Co., Ltd.'s daily operations do not violate any laws. There are no court proceedings, arbitration, or fines pending against Shenzhen Kim Fai Solar Energy Technology Co., Ltd. There are no court proceeding, criminal liabilities, or administrative punishment procedure against any directors, supervisors or executives of Shenzhen Kim Fai Solar Energy Technology Co., Ltd.

3. The shares exchanged in connection with the acquisition of Shenzhen Kim Fai Solar Energy Technology Co., Ltd did not have any liens, pledges or attachment on them.

4. The shareholders of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. reached unanimous consent of the acquisition.

5. The share transfer agreement between Shenzhen Anytone Technology Co., Ltd. and the shareholders of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. was notarized by Shenzhen Notary Public Office, Guang Dong Province, PRC.

In conclusion:

1. We opine that the two parties of the acquisition have real, effective capacity as subjects of law to enter into the transaction. The content and the form of the relevant agreements related to the acquisition comply with Chinese laws. The transaction had the necessary authorizations and approvals. Therefore, the transaction was legitimate and effective. There were no legal obstacles to the implementation of the acquisition.

2. In addition, the transaction between Shenzhen Anytone Technology Co., Ltd. and Shenzhen Kim Fai Solar Energy Technology Co., Ltd does not constitute a related party transaction. The Company Law of the People's Republic of China Article 217(4) defines related party transaction as a transaction between the controlling shareholders, the actual controllers, directors, supervisors, senior managers and their directly or indirectly controlled enterprises, or any other relationship that would cause the transfer of the company's interest. According to the company registration certificates and business registrations of the Shenzhen Anytone Technology Co., Ltd and Shenzhen Kim Fai Solar Energy Technology Co., Ltd., there is no related party relationship between any shareholders (including previous shareholders before the share transfer) and the companies. Therefore, the acquisition of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. is not a related party transaction under Chinese laws.

3. In addition, the transaction between New Energy Systems Group and Shenzhen Kim Fai Solar Energy Technology Co., Ltd. does not constitute a related party transaction. The Company Law of the People's Republic of China Article 217(4) defines related party transaction as a transaction between the controlling shareholders, the actual controllers, directors, supervisors, senior managers and their directly or indirectly controlled enterprises, or any other relationship that would cause the transfer of the company's interest. According to the company registration certificates and business registrations of the New Energy Systems Group and Shenzhen Kim Fai Solar Energy Technology Co., Ltd., there is no related party relationship between any shareholders (including previous shareholders before the share transfer) and the companies. Therefore, the acquisition of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. is not a related party transaction under Chinese laws.

This legal opinion is based on current laws and regulations of China. It does not guarantee that the current legal basis of the legal opinion will not be amended, revised or replaced.

The legal opinion is issued in both Chinese and English. In the event that there are any discrepancies between the two versions, the version in Chinese shall prevail.

http://sec.gov/Archives/edgar/data/1144 ... /ex992.htm

New Energy Systems Group Announces Addition to Russell Microcap Index

SHENZHEN, China, June 30, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, today announced that it has been added to the Russell Microcap Index effective June 24, 2011.

Russell Investments, a leading financial services provider serving individual and institutional investors, rebalances its entire family of indexes every year to maintain true representation of global equity markets, capitalization and style. Companies are added and deleted from the various indices according to these changes. The Russell Microcap Index Fund had approximately $497 million of assets as of June 28, 2011.

New Energy Chairman Weihe Yu stated, "We are proud to be a part of an index that includes premier companies such as Orbitz Worldwide and Rosetta Stone. It signifies the progress New Energy has made in a short period of time. As we continue to execute our growth strategies in the years ahead, we will strive to deliver significant shareholder value."

http://finance.yahoo.com/news/New-Energ ... l?x=0&.v=1

Friday, May 20, 2011
Analyst Reports
Rodman and Renshaw on NEWN 5/20/2011

NEWN: 1Q11 Earnings Update

1Q11 Results: NEWN reported 1Q11 revenue, Non-GAAP earnings, and Non-GAAP diluted EPS of $27.1 MM, $6.4 MM, and $0.44, compared to our estimates of $31.5 MM, $5.9 MM, and $0.40, respectively. 1Q top-line grew by 20.6% y-o-y from $22.5 MM in 1Q10, driven by the contribution from acquired Kim Fai solar business, which generated ~$5.5 MM in revenue for the quarter.

Revenue Mix: By product segments, battery, battery components, and solar battery products each generated $20.05 MM, $1.52 MM, and $5.51 MM in revenue, accounting for 74%, 6%, and 20% of total sales. The top-line growth was primarily driven by solar segment’s contribution. Finished battery segment only grew by 3.4% while battery components segment declined by 50.3% y-o-y. Management attributed some revenue losses to counterfeiting issues, which they are in the process of now addressing.

Margins: Gross profit reached $9.4 MM for the quarter, representing a 34.9% margin, compared to 28.6% in 1Q10. The higher gross margin was mainly driven by the improved production efficiency and cost saving from the production switch within finished battery assembly segment, according to the company’s 10-Q filing. The battery components segment delivered a lower gross margin of 30.6% compared to 36.0% a year ago due to a higher raw material cost.

Share Repurchase Program: Management indicated during the conference call that it is now set up to execute the share re-purchase program. They expect to act on this in line with the restriction window opening up. We believe management is serious about this effort and should be expected to execute,

Expecting a New CFO Soon: On the call, management conveyed that NEWN is close to hiring a new CFO with the board is expected to make a decision shortly. Meanwhile, management stated that its current auditor, Goldman Kurland & Mohidin, LLP, will continue to be retained for the next few quarters until a new auditor (potentially larger) is finalized.

FY11 Guidance Reiterated: Management reiterated its FY11 guidance of $130 MM ~ $135 MM for top-line, $24.5 MM ~ $25.5 MM (adjusted), and $1.69 ~ $1.75 for diluted EPS (adjusted).

2Q11 Estimates: For 2Q11, we are now projecting $31.2 MM in total revenue, $5.5 MM in adjusted earnings, and $0.38 in diluted EPS. We are expecting 26.4% in gross margin and 20.4% in operating margin due to inflationary environment in China. For full year FY11, our estimates are $130.5 MM, $24.6 MM, and $1.69 per share, respectively.

Valuation: At current levels NEWN is trading at P/E multiples of ~2.3x to our FY11 Non-GAAP earnings estimates. This multiple is well below the peer group. We are comfortable maintaining a $12.00 price target for NEWN, which translates into P/E multiples of 8.2x to our Non-GAAP earnings estimates for FY11.

http://geoinvesting.com/companies/newn_ ... &item=7946

New Energy Systems Group Announces Management Buyback Update
PR Newswire
SHENZHEN, China, July 13, 2011



SHENZHEN, China, July 13, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, today announced that the Company's senior management team has purchased approximately $300,000 of stock of the Company to date with personal funds.

On April 1, 2011, the Company's senior management team (including its Chairman, CEO and CFO) announced their intentions to purchase approximately $1 million of the Company's common stock in the open market. Through July 13, 2011, Mr. Yu has purchased approximately $200,000 of stock at an average price of $3.45 per share. Junfeng Chen, our CFO, has purchased approximately $100,000 of stock at an average price of $3.39 per share.

Currently, the purchase of additional shares of stock of the Company by Mr. Yu and other members of the senior management team is subject to the Company's black-out period while the Company prepares its second quarter 2011 financial filings. The Company's black-out period will terminate at the end of the first full trading day after the Company reports its second quarter results in mid-August.

"I remain extremely confident in our future growth prospects," said New Energy Chairman Weihe Yu. "That is why I am using my personal funds, along with other executives on the management team, to purchase our stock at compelling prices. Over time, I believe more investors will realize the significant investment opportunity in our stock. In the meantime, our management team remains focused on executing our growth strategy."
http://pressrelated.com/press-release-n ... pdate.html

Beginning in 2011, through a business switch with NewPower, NewPower took over E’Jenie’s finished battery pack business and transferred its battery cell business to E’Jenie. This transition will complete the transformation of E’Jenie as a complete battery component manufacturer which produces battery shells, caps, and cells. We anticipate that the original customers of NewPower for battery cells will become E’Jenie’s customers.

New Energy Systems: Powerful Possibilities

New Energy Systems (NEWN) is a vertically integrated lithium-ion battery company that is leveraging its design capabilities to facilitate extended usage of portable electronic gadgets such as mobile phones. The company has come into its current state through a series of transformative acquisitions allowing it to span across the entire li-ion battery value chain to include capabilities in design, manufacturing and distribution.

Consumer markets are the core focus of New Energy, particularly users of Apple mobile devices and all major brands of cell phones, laptops, digital cameras, MP3s, etc.

New Energy Systems is not a traditional export ODM (original design manufacturer), rather a leading developer of products with in house marketing and design. Finished and unfinished batteries plus battery component manufacturing expertise keeps New Energy connected with leading mobile device manufacturers, such as Apple (AAPL).

China's electronics industry growth has been driven by a combination of factors that include domestic and international demand, strong government support, and a favorable business climate for attracting foreign investment and technologies.

With rising incomes and improved living conditions especially in China's urban areas, demand for personal computers, mobile phones, LCDs, home appliances, multifunctional chips, and newly emerging electronic technologies such as FPD's has grown rapidly and continues to do so. Likewise, China's inexpensive consumer electronics have attracted increasing demand from abroad.

NEWN should benefit from the growing portable electronics market in China. The increased focus on international expansion with the launch of MeePower mobile power sources in the U.S. and solar mobile chargers in Europe is expected to further stimulate growth in revenues and margins. The addressable market for li-ion batteries is expanding.

Market research firm Frost estimated the global market for li-ion batteries is expected to grow at a CAGR of 13% to reach $38 billion in 2015. New Energy can leverage its low-cost production capabilities and its branded products to capture a slice of this vast market. The Chinese li-ion battery market is highly competitive and fragmented, with numerous players targeting the OEM, domestic, and export markets.

Company Background

-Incorporated on March 27, 2001 in the State of Nevada as Jasmine's Garden, the company changed its name to China Digital Communication Group in September 2004 and to New Energy Systems Group (NEWN) during September 2009.

-On November 15, 2004, NEWN acquired Billion and its operating subsidiary Shenzhen E'Jenie Technology Development Co. The company manufactures and distributes lithium battery shells and related products through E'Jenie, mainly in China.

-On June 29, 2006, NEWN acquired Galaxy View and its wholly owned operating subsidiary Sono Digital Electronic Technologies Co. (―Sono‖), incorporated under the laws of the People's Republic of China on May 29, 2001.

-On April 24, 2007, the company disposed off Galaxy View and its 100% subsidiary Sono by transferring a 40% stake in Sono to Wang Feng and a 60% stake to Liu Changqing for $3 MM. The company had a 10-to-1 reverse stock split on July 13, 2009.

-On December 7, 2009, the company completed the acquisition of Anytone International Co. Ltd. (―Anytone International‖) and its wholly owned operating subsidiary Shenzhen Anytone Technology Co. Ltd. (―Shenzhen Anytone‖).

-On January 12, 2010, the company acquired Shenzhen NewPower Technology Co. Ltd. (―NewPower‖). The company’s subsidiary, E’Jenie, acquired NewPower, under a share exchange agreement.

-On November 10, 2010, NEWN announced the acquisition of Kim Fai Solar Energy Technology Co. Ltd. ("Kim Fai Solar"). The company’s subsidiary Anytone acquired Kim Fai Solar under a share swap deal.

Catalysts

The 2009 acquisitions of Anytone and NewPower moved NEWN into higher margin businesses, with precence across the entire li-ion battery value chain. Anytone brings significant R&D expertise and has expanded NEWN's offerings to include end-user branded products.

The latest press release confirms that Anytone can leverage its strong R&D capabilities to innovate new products to meet changing market needs, which can support NEWN's penetration into the direct-to-consumer market.

Last year NEWN entered into a distribution agreement with A-Solar, a European developer and distributor of solar-powered products for charging mobile electronics; this could be a catalyst for more international business opportunities.

During August 2010, the company announced the launch of MeePower. The success of this brand in the U.S. will further strengthen the company's international expansion.

Because of China's highly competitive and fragmented lithium battery industry I expect M&A activity in the li-ion battery space will gain momentum during the upcoming years, which will be beneficial for New Energy Systems. The company has demonstrated its ability to acquire and integrate, thereby expanding its business lines to become a bigger and more profitable enterprise.

Valuation

Management is reiterating its 2011 guidance as follows:

Revenue:
$130 to $135 million

Adjusted Net Income:
$24.5 million to $25.5 million

Adjusted EPS:
$1.69 to $1.75

With a stock price of $3.47 the company's P/E is below 3. By expanding its distribution and growing its brand recognition I believe NEWN can grow its revenues by at least 20% on a yearly basis.

New Energy has a healthy balance sheet with more than $10 million in cash, $95 MM shareholder equity and almost no long-term debt as of March 31, 2011.

The company deserves a higher multiple, even at a P/E multiple of 5 the target price is the double than their current level.

http://seekingalpha.com/article/281309- ... sibilities

Net Revenue


Net revenue for the three months ended June 30, 2011 was $23.09 million compared to $23.41 million for the comparable period of 2010, a decrease of $0.32 million, or 1%. The decrease was primarily due to (1) the entire battery industry being depressed; (2) the fact that we integrated the business section in each subsidiary, and as a result, reduced the production and sales of batteries and battery shells and covers; (3) the fact that we lowered certain products’ selling price to keep competitive as a result of piracy products in the market, including our products, which Management is rigorously combating. Sales of our battery decreased by $5.26 million, compared to $20.93 million in the second quarter of 2010. We have been able to integrate the industry chain, optimize the internal and external resources to improve our productivity and increase our market share. Accordingly, from the beginning of 2011, we switched the battery production of E’Jenie with the battery cell production of Newpower to improve production efficiency and cost saving. The acquisition of Kim Fai in November 2011 brought us $6.16 million in solar panel sales during the second quarter of 2011.


For our major business, the sales of Anytone’s branded products for the three months ended June 30, 2011 was $9.71 million compared to $11.43 million for the 2010 period, a decrease of $1.72 million, or 15%. The decrease was due to (1) the entire battery industry being depressed; and (2) the impact of piracy products in the market, including our products, which Management is vigorously combating.


Our existing battery shell and cover business generated net revenue of $1.25 million during the three months ended June 30, 2011, compared to $2.47 million for the comparable period of 2010, a decrease of $1.22 million, or 49%. The decrease in our sales in this segment was mainly due to the rearrangement of our sales strategy and production plan on certain products and decreased demand from the market.


Cost of Revenue


Cost of revenue for the three months ended June 30, 2011 was $16.62 million, or 72% of net sales, compared to $17.26 million, or 74% of net sales, for the comparable period of 2010, a decrease of $0.64 million, or 4%.

Cost of revenue for the battery assembly and distribution business segment was $10.96 million, or 70% of the total battery revenue for the three months ended June 30, 2011, compared with $15.51 million, or 74% for the comparable period of 2010, a decrease of $4.55 million, or 29%. The percentage decrease in cost of revenue was mainly due to the decrease of sales and switching of our battery production of E’Jenie with the battery cell production of Newpower to improve production efficiency and cut cost.

Cost of revenue for our existing battery shell and cover business during the three months ended June 30, 2011 was $1.0 million, or 79% of sales compared to $1.75 million for the comparable period of 2010, or 71% of sales. The increase in our percentage cost of revenue for battery shell and cover business resulted from an increase in the cost of materials, especially the price of the steel and aluminum.


Cost of revenue for our new production line of solar products for the three months ended June 30, 2011 was $4.68, or 76% of sales.

http://yahoo.brand.edgar-online.com/dis ... -11-002212

sssjjjj เขียน:ดู Comment สุดท้าย ใน SeekingAlpha บทความที่ คุณ Tok มาโพส ผมว่า น่ากลัวนะครับ ถ้าเค้าไม่ได้ตัดต่อภาพนะ Author ของบทความถึงกับไม่เถียงต่อเลย

The potential fraud is in that they are buying companies from themselves and over paying. And by the way, the Kim Fai PR about the difference between AnySolar and Kim Fai was a joke. The chairman most likely lied.

For example:

http://www.szaic.gov.cn/wsbs/ its the official site for Schenzhen to check company records.

On this official Chinese gov website, the official address of AnySolar is:

4/F, A2 Building, Xinjianxing Industrial zone, Fengxin Road, Guangming

Kim Fai's official address on the official Chinese gov website is:

Shenzhen Meihua Road, Futian District, Shenzhen China Technology Industrial Park, Building 1, Level 6, East 6C1

Why on the NEWN website: http://www.newenergysystemsgroup.com

where you can download PDF's about the factory information of the subsidiaries does NEWN say Kim Fai's factory address is AnySolar's official address:

4/F, A2 Building, Xinjianxing Industrial zone, Fengxin Road, Guangming

And if AnySolar's official address listed on the official Chinese website is a Factory, why did Jack Yu say in his PR:

"Anysolar was, and is, primarily a sales agent which markets solar panels and equipment to select customers in China. Anysolar is not a manufacturer and thus outsources its Anysolar-branded original equipment and original design solar products to a number of third party manufacturers."

If Anysolar is not a manufacturer, why is their address a factory?

And why does every website for AnySolar on the internet say it is a manufacturer? http://www.36077.tradebig.com/

This is very confusing.

Also, in the PR about the NEWN acquisition, it says "Neither Mr. Cheng, nor any of Mr. Cheng's employees or advisors of Anysolar were, at any time, shareholders of Kim Fai."

In the official government records on http://www.szaic.gov.cn/wsbs/ 龚巍 (Gong Wei)was listed as the general manager of AnySolar, meaning he was an employee. He was also a shareholder of Kim Fai and he was also the president of Kim Fai. So this directly contradicts the statement from Yu that ""Neither Mr. Cheng, nor any of Mr. Cheng's employees or advisors of Anysolar were, at any time, shareholders of Kim Fai." So why the need to make up stuff in the PR?

http://seekingalpha.com/article/281309- ... sibilities

MeePower.com.cn & anysolar.cn Connection

The following are the registration details for the domain names meepower.com.cn, anysolar.net and anysolar.cn. Can be found with a simple whois domain name search lookup.

Domain Name: meepower.com.cn
Registrant Name: 余维江 (translated to Yuwei Jiang, not sure who that is)
Administrative Email: [email protected]
Registration Date: 2010-05-31 16:05


Domain Name: anysolar.cn
Registrant Name: 成凤 (translated as Feng Cheng, one of the shareholders of Kim Fai)
Administrative Email: [email protected]
Registration Date: 2010-05-26 17:02

Domain name: anysolar.net

Registrant Contact:
yujiang yu
yu weijiang
+86.75526500128 fax: +86.75526500128
F5F ,No.5 Qiongyu RD, Nanshan district, Shenzhen
shenzhen guangdong 518057
[email protected]
Created: 2009-09-16


1. Please notice the address for the registered domain of anysolar.net in 2009. It lists Anytone's address. This is before it supposedly had no connection to Anytone.

2. As you can see, both the meepower and anysolar domains have the same administrative emails. I really don't know what to make of it other than it is another detail that supports the theory that Kim Fai/AnySolar had some connection with NEWN/Anytone before the acquisition. But who knows, it could maybe be proven insignificant.

3. Both the meepower domain and anysolar.cn were registered within a couple days of each other. Not that big of a find, but is worth it to note.


Please take all of this for what its worth. I am not trying to jump to any conclusions, but just presenting some new interesting things I have found and maybe you guys can make more of it.

oh wow, not sure how I didn't notice that, but yu weijiang was Anytone's Chairman.

http://www.articleblast.com/Business_and...

Turning to the concept of product development when Anytone Chairman Mr. Yu Weijiang bluntly: The company vision is to create easy, convenient mobile life! Within three months, we can in all major airports, stations, terminals, bus stations, tourist attractions, chain of shopping malls, supermarkets to buy Anytone's "with emergency power."

So he registered the anysolar.net name in 2009.

He also registered anytone.net in 2009 as well but they don't use that domain anymore.

Domain Name : anytone.net
Creation Date : 2009-02-12 16:19:11
Registrant:
Organization : yu weijiang
Name : yu weijiang
Address : Nanshanqu
City : Shenzhen
Province/State : guangdong
Country : cn
Postal Code : 518057
Email: [email protected]

We could maybe assume as well that [email protected] is Yu Weijiang's email address as well. Starts with "yw."

If I recall, some bloggers identified a link on Anytone's website to Anysolar. They claim the date on the related Anysolar website pre-dated the Kim Fai acquisition. NEWN management received a lot of inquiries and responded:

http://finance.yahoo.com/news/Chairman-W...

The whole explanation can be summed up in this excerpt:

"We recognize that the companies cooperated and co-marketed together on several occasions however they are two separate businesses. New Energy's acquisition of Kim Fai was at arm's length and did not constitute a related party transaction."

http://messages.finance.yahoo.com/Stock ... =590&frt=2

New Energy Systems Group Announces Senior Executive Changes
Chairman Mr. Weihe Yu will assume CEO position
Mr. Junfeng Chen will remain interim CFO

SHENZHEN, China, Aug. 19, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, announced that Mr. Paul Li, who was scheduled to become the new Chief Financial Officer on August 16th, will not join the Company due to personal reasons. Mr. Junfeng Chen, who was slated to step down from the Chief Financial Officer position on the same day Mr. Li started, will continue to serve as the Company's interim CFO until a permanent CFO is secured.

Separately, the Company's Chief Executive Officer, Mr. Nian Chen, announced his resignation effective August 19, 2011 due to poor performance by the Company. The Board of Directors ("the Board") has accepted Mr. Chen resignation and appointed Mr. Weihe Yu, New Energy's Chairman, to the CEO position. The Board will evaluate Mr. Yu's performance at the end of 2011 and determine whether any changes are warranted.

According to the employment agreement signed by Mr. Li and the Company on June 20, 2011, Mr. Li would become New Energy's permanent Chief Financial Officer effective August 16, 2011. However, due to personal reasons that arose subsequent to June 20, 2011, Mr. Li has decided not to join the Company. There were no disagreements between Mr. Li and the Company or any officer or director of the Company which led to Mr. Li's resignation.

New Energy Chairman, Mr. Weihe Yu said, "We regretfully accept Mr. Li's and Mr. Chen's resignations and wish them the best. The board will start the search for a new permanent CFO shortly. In the interim, we have the utmost confidence that Mr. Chen will continue to help us maintain sound financial and operating controls."

Chairman, Mr. Yu continued, "My primary focus as Chairman and CEO will be to reinvigorate profitable growth in our Anytone® batteries business. While we have already taken aggressive measures to reverse the negative impact from counterfeit products, we will redouble our efforts in product development, sales and marketing and quality controls to ensure this is a healthy and growing business."

http://finance.yahoo.com/news/New-Energ ... l?x=0&.v=1

Just spoke with Mark Flather at MZ-HCI. John Mattio, the NEWN rep was not available so Mark was willing to provide his insight and what information he had from John. I gave Mark a list of questions which he will forward to John.

CFO resignation - The new CFO had a serious illness in his family which made him unable to perform his duties as CFO.

CEO resignation - Chairman Yu was apparently dissatisfied with Chen's handling of the product counterfeiting issue.

MZ-HCI is aware of the poor timing of the announcements but in the case of the CFO was unavoidable and in the case of the CEO potentially beneficial.

Management share buyback - Mark agrees that it is important for NEWN to continue with the buyback program. He will follow-up with John to see if there is any additional information.

General information not directly related to NEWN - Mark mentioned that MZ-HCI has been advising their China based clients to initiate or supplement their management share purchase program in addition to some form of dividend program. From Mark's perspective these are key factors for an investment firm to consider before initiating/increasing a position in a China based company. Some of the companies indicate that the short term effect of increasing the share price is not enough to justify the large tax liability associated with these programs. However, MZ-HCI's response is that the long term benefits of these programs far outweigh the associated cost. If a company is not willing to implement these types of programs to bolster investor confidence, MZ-HCI is recommending the company consider going private as an alternative.

I'll post an update if I receive any further information.

http://messages.finance.yahoo.com/Busin ... &mid=17323

I had a follow-up discussion yesterday with John Mattio. Here's a summary of the topics discussed:

CFO - Did leave due to personal reasons. At his request the PR release didn't give specific details. NEWN is going to continue the CFO hiring process, but if Paul Li is able to get his personal affairs in order before another candidate has been hired, he will still be considered for the position.

CEO - No immediate plans for a new CEO. Jack Yu is personally handling the counterfeiting issue and will initiate CEO hiring once the problem is resolved.

Stock buyback - NEWN has been advised to complete the remaining $700k purchase in one shot and as soon as possible.

Dividend - A dividend program has been discussed but most likely will not be initiated until 2012/2013.

US distributor - NEWN has made contact with several US distributors at the 2011 CES show in LV. No finalized deals are expected to be announced until the counterfeiting issue has been resolved. The products offered will be from the MeePower line.

Direct sales web site - Still in process.

Investment firms - HCI has several large investment firms interested in NEWN and other Chinese companies they represent. They are waiting for stock repurchase plans to be finalized and auditor upgrades before opening large positions. The small positions opened for companies like NEWN are most likely for the firms' personal clients.

2010 SAIC filing. The filing is complete but no timeline for when it will be available on the corporate website.

Auditor upgrade - Still planned but nothing firm until CFO issue is resolved.

http://messages.finance.yahoo.com/Stock ... rt=2#17535