China Tracker - Details for China Valves Technology (CVVT)


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 China Valves Technology
 Business Outlook

Recent Chain of Events:
2012-09-21 -- Delisting from NASDAQ
2012-09-11 -- Last SEC Filing
2012-07-16 -- Trading halted by NASDAQ
2012-07-09 -- Auditor Resignation
2012-05-08 -- Last Quarterly/Annual Report: Q2/FY2012 ended March 31, 2012

(Source: Trading China, 2012-09-30)

On July 12, 2011, China Valves Technology held an annual meeting of its shareholders at which a majority of the Company's shareholders approved the appointment of Frazer Frost LLP to serve as the Company's independent registered public accounting firm for 2011.

(Source: 8-K Filing, 2011-07-15)

China Valves Technology today announced that the Company has signed a strategic cooperation agreement with Sinopec International Petroleum Service Corporation. Under the agreement, the Company would supply various valve products for Sinopec Petroleum Service's international projects. The Agreement is a general cooperation agreement and is valid from June 16, 2011 to June 15, 2013, and can be further extended for another two years by negotiation between two parties. Both parties agreed that they would sign specific contracts for specific projects under the general cooperation framework. Depending on the specific project, Sinopec Petroleum Service would buy all valve products directly from China Valves or act as a sales agent of China Valves through its more than 35 subsidiaries in the world.

(Source: PR Newswire, 2011-06-16)

The Company's current priority is improving the efficiency of internal operations through streamlining of manufacturing practices and consolidating sales and procurement efforts of its different subsidiaries. The Company expects the petrochemical, oil and gas industry to drive sales in 2011, in addition to demand from domestic thermal power and water supply markets. While China's nuclear valve market faces heightened safety standards following the nuclear disaster in Japan in March, the Company expects nuclear power to remain a long-term growth driver. The Company is currently focused on bidding for larger projects, which it expects will improve profitability going forward. As of March 31, 2011, backlog of firm orders was $100 million.

"We are pleased with a strong start to the year and remain comfortable with our target revenue growth rate of 25%-28% for 2011. We expect to maintain our position as an industry leader in a number of our end-user markets through our focus on innovation, new product introductions and technical excellence. We maintain our target revenue growth rate of 25%-28% for 2011. Due to inflationary pressures, we maintain our gross margin expectation of around 41%-42% for the next few quarters. As we complete the integration efforts of our subsidiaries and recognize manufacturing and sourcing efficiencies, we would expect to see this result in improved margin performance. Account receivables remain a challenge, as we are adjusting to the customer bases of our newest subsidiaries. In order to improve cash flow, we are gradually introducing more centralized payment terms and collection procedures and expect to update our investors as we make progress on this important issue. We believe that our cash position and available debt facilities provide us with sufficient resources to execute our growth strategy."

(Source: PR Newswire, 2011-05-10)

In 2011, the Company expects to improve production and sales efficiency through consolidation of manufacturing practices at its subsidiaries, bidding for large-scale projects though its Shanghai-based sales office, and further diversification of end-user industries. The Company expects the petrochemical, oil and gas industry to remain a strong growth driver in 2011, supported by the demand from domestic thermal power and water supply markets. The Company also intends to continue its long-term efforts to become a significant valve supplier to the nuclear power market in China.

"Looking forward, we remain confident in the growth opportunities with our end-user markets and in our position as an industry leader. The localization trend in the thermal power industry is an encouraging sign of a shift towards domestic valves in increasingly demanding applications and one we hope will transfer to other key applications as well. Consequently, we target 25%-28% revenue growth for 2011 excluding any additional acquisitions. Following higher labor and raw material costs in line with higher inflation in China, we expect gross margin around 41%-42% for the next few quarters. The increased consolidation efforts to improve manufacturing efficiencies may increase the profitability of our new subsidiaries in the future. However, the larger number of subsidiaries and broader product portfolio impacts product mix, which may lead to quarterly fluctuations in our gross margin."

(Source: PR Newswire, 2011-03-16)

China Valves Technology today announced it has approved to replace Frazer Frost LLP with one of Big Four audit firms as its new independent auditor. Frazer Frost LLP continues to serve as the Company's auditor until Form 10-K for the fiscal year 2010 is filed. The decision to change the Company's independent auditor was recommended, authorized and approved by China Valves' board of directors on December 27, 2010. In addition to making progress with the shift to one of Big Four audit firms, the Company has committed to improving its internal controls by strengthening its internal audit and financial reporting function by hiring two qualified financial personnel with Big Four auditing background. The Company has met and received proposals from select Big Four audit firms, and is in advanced stages of negotiation with one of them. Both parties are proceeding with signing the letter of engagement in due course.

"We are committed to establishing the highest standards of financial transparency and believe that a transition to a Big Four audit firm is a required next step for us. We fully appreciate the professional services rendered by the audit team of Frazer Frost LLP in the past. As disclosed before, we just hired a new CFO with rich experience in overseas listed companies. I believe Dr. Wei will make a great contribution to the communication with the new audit firm to improve our transparency in the investing community."

(Source: PR Newswire, 2010-12-27)

The Company expects to improve sales efficiency through consolidation of sales of its subsidiaries, cross-regional promotion, and further diversification of end-user industries. In the upcoming months, the Company expects to see a growing contribution from Hanwei Valve in sales in the petrochemical, oil and gas sectors. As of September 30, 2010, the Company's backlog was around RMB 500 million (approximately $73 million), of which it expects to realize RMB 300 million (approximately $44 million) in the fourth quarter of 2010. As such, the Company expects to generate approximately $11 million in net income for the fourth quarter of 2010.

"Given the strong performance of our new subsidiaries, we expect to outperform our previous guidance of $40 million in net income for 2010 by approximately $7 million. Looking forward towards 2011, we remain confident in the growth opportunities with our end-user markets and in our position as an industry leader. We expect to further strengthen the performance of our new subsidiaries as we continue to integrate sales practices and improve manufacturing efficiency of our companies. As a result, we target around 30% revenue growth for 2011 excluding any additional acquisitions."

(Source: PR Newswire, 2010-11-10)

The Company's backlog at the end of July 2010 is around RMB 600 million (approximately $87.9 million), which it expects to realize by the end of this year. The Company reiterates its net income guidance of $40 million for fiscal year 2010. "Although we passed the midpoint of our guidance six months into the year and have a solid backlog, we choose to remain conservative at this time and will continue to provide regular updates to investors on our business."

(Source: PR Newswire, 2010-08-10)

So far in 2010, we have a number of milestones to celebrate as we continue executing our growth strategy. The acquisition of Hanwei Valve is an important step towards diversifying our product portfolio by adding sophisticated products and patented applications. It will improve our position in key end-user markets such as the petrochemical industry, help us enter new end-user markets such as bioengineering, and strengthen our distribution network in our core end-user markets in water supply and power generation sectors. Moreover, we believe that increased collaboration between our different subsidiaries in combination with our trailblazing products will make 2010 a highly successful year for China Valves. The Company reiterates its net income guidance of $40 million.

(Source: PR Newswire, 2010-05-13)

In addition to China Valves benefiting from the government stimulus plans, which have included significant allocations to infrastructure, and which encourage the use of domestically produced materials, our strong sales are driven by our success in integrating our completed acquisitions and our research and development efforts, allowing us to secure orders from significant projects and diversify our customer base. We remain confident that the Company is well positioned to meet its guidance to generate $40 million in net income in fiscal year 2010.

(Source: PR Newswire, 2010-04-23)
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Current Price:  n/a
F10k Day (2009-04-23): -100.00%$2.76
2009 Close: -100.00%$9.24
2010 Close: -100.00%$10.48
2011 Close: -100.00%$2.13
High (2012-02-08): -100.00%$3.12
Low (2012-09-21): -100.00%$0.40
Exchange:
Market Capitalization: n/a
Total Shares: 35.68 mill
Float: n/a
Avg Volume: 198.00 k
Short Interest: 3.10 mill
Short Ratio: 15.33%15.6 d
Last Quarter: 2011-03-31
Revenue (MRQ): 41.95 mill
Net Income (MRQ): 6.66 mill
Op. Cash Flow (MRQ): -10.42 mill
all financial data provided without warranty