Saturday, December 25, 2010
Harbin Electric (HRBN)
Wow, it's been a long time since I looked at this one. Currently trading at $17.62.
Latest 10-Q
Nevada Corporation, but operating in Harbin (ha1 er3 bin1) 哈尔滨, China.
Period ending Sept 30, 2010
31.2 million shares on Nov 5, 2010
Current assets are mostly AR, inventories, and cash.
Large goodwill and intangibles. Advance on non-current assets.
Solid balance sheet
31% gross margin
20% operating margin
16% net margin
Some gains from currency translation.
Earned 57 cents per share diluted for the q, share count has been increasing, issued massive amount of stock at $16 last year, pretty much doubled the equity.
Operating cash flow looks pretty good (last year looks a bit odd)
What's the story on the SG&A? Also the capital structure.
The big drop in net income is due to 1) a big interest expense, 2) loss on a currency hedge, 3) change in fair value of warrant.
They started paying taxes in 2008.
Issued a bunch of stock in 2008 for $14.13 per share and again in 2009 for $16. Share count has been fairly stable since.
A lot of this is tricky due to a minority interest in what looks like one of their subsidiaries.
Cash flow shows a gigantic "payment to original shareholders for acquisition" and the huge cash inflow from selling stock.
The stock is selling for over $17, so I don't see any reason to continue with this.
Latest 10-Q
Nevada Corporation, but operating in Harbin (ha1 er3 bin1) 哈尔滨, China.
Period ending Sept 30, 2010
31.2 million shares on Nov 5, 2010
Current assets are mostly AR, inventories, and cash.
Large goodwill and intangibles. Advance on non-current assets.
Solid balance sheet
31% gross margin
20% operating margin
16% net margin
Some gains from currency translation.
Earned 57 cents per share diluted for the q, share count has been increasing, issued massive amount of stock at $16 last year, pretty much doubled the equity.
Operating cash flow looks pretty good (last year looks a bit odd)
Big capex
Acquired Xi'an Tech Full Simo Motor Co (est 1955, state-owned) in Oct 2009. They've got a bunch of subsidiaries in China, 1.5 in 上海.
STOP ON PAGE 7
Let's back up to the 10-K:
Calendar 2009
Year ended December 31, | ||||||||||||||||||||
2009(a)(b)(c) | 2008(b) | 2007(d) | 2006(e) | 2005 | ||||||||||||||||
Revenue | $ | 223,234,394 | $ | 120,820,302 | $ | 65,402,864 | $ | 40,415,777 | $ | 23,643,664 | ||||||||||
Cost of revenue | (146,622,220 | ) | (73,343,521 | ) | (32,967,887 | ) | (20,754,282 | ) | (12,083,957 | ) | ||||||||||
Gross profit | 76,612,174 | 47,476,781 | 32,434,977 | 19,661,495 | 11,559,707 | |||||||||||||||
Selling, R&D general and administrative expenses | (20,764,873 | ) | (13,083,604 | ) | (8,723,685 | ) | (5,667,260 | ) | (1,595,443 | ) | ||||||||||
Income (loss) from operations | 55,847,301 | 34,393,177 | 23,711,292 | 13,994,235 | 9,964,264 | |||||||||||||||
Net Income attributable to controlling interest | $ | 19,646,781 | $ | 25,378,699 | $ | 16,902,684 | $ | 18,438,512 | $ | 10,000,158 | ||||||||||
Basic earnings per share attributable to controlling interest | $ | 0.77 | $ | 1.25 | $ | 0.99 | $ | 1.11 | $ | 0.67 | ||||||||||
Diluted earnings per share attributable to controlling interest | $ | 0.77 | $ | 1.19 | $ | 0.91 | $ | 1.01 | $ | 0.66 | ||||||||||
Dividends declared per share | — | — | — | — | — | |||||||||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||
Basic | 25,568,936 | 20,235,877 | 17,082,300 | 16,600,451 | 14,934,667 | |||||||||||||||
Diluted | 25,672,420 | 21,323,660 | 18,634,739 | 18,306,569 | 15,143,891 | |||||||||||||||
What's the story on the SG&A? Also the capital structure.
The big drop in net income is due to 1) a big interest expense, 2) loss on a currency hedge, 3) change in fair value of warrant.
They started paying taxes in 2008.
Issued a bunch of stock in 2008 for $14.13 per share and again in 2009 for $16. Share count has been fairly stable since.
A lot of this is tricky due to a minority interest in what looks like one of their subsidiaries.
Cash flow shows a gigantic "payment to original shareholders for acquisition" and the huge cash inflow from selling stock.
The stock is selling for over $17, so I don't see any reason to continue with this.
// posted by Bruce @ 10:48 AM 
