China Tracker - Details for Duoyuan Global Water (DGWIY)


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 Duoyuan Global Water
Shares Outstanding (MRQ): 24.33 mill
New Shares / Dilution (TTM): 6.94 mill39.94%
Cash (MRQ): 152.63 mill0.00%
Account Receivables (MRQ): 40.54 mill0.00%
Account Receivables (Q/Q): + 5.11 mill14.42% 
Long-Term Debt (MRQ): NO DEBT
Revenue Growth (Q/Q): 18.98% 
Revenue Growth (Y/Y): 35.11%
Net Income Growth (Q/Q): 21.59% 
Net Income Growth (Y/Y): 22.73%
EPS Growth (Y/Y): -12.30%
Net Margin (Q/Q): 26.5% (25.9%)0.60% 
Net Margin (Y/Y): 26.5% (29.2%)-2.70% 
EPS | P/E (2 MRQ Projection): $2.050.00 
CFPS | P/CF (2 MRQ Projection): $1.740.00 
Price/Sales (2 MRQ Projection): 0.00
Price/Book (MRQ): 0.00 
Auditor: Grant Thornton
 
 Forward Projections (Fiscal Year)
EPS | P/E (Estimates updated 2010-10-31): $1.400.00 
 Basic Facts and History (show more)
Reporting Type: Foreign Company (20-F Filings) 
Going Public: IPO on 2009-06-24 
IPO Price: $16.00 (-100.00% since IPO)

 Business Outlook

COVERAGE TERMINATED (Going Dark)
Recent Chain of Events:
2012-05-11 -- Last SEC Filing
2012-01-26 -- Delisting from NYSE
2011-04-06 -- Trading halted by NYSE
2011-04-04 -- CFO Resignation
2011-03-22 -- Last Quarterly/Annual Report: FY2010 ended December 31, 2010

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

As we move into 2011, our competitive position remains strong and we are poised for future growth supported by our trusted brand name and extensive distribution network. With this in mind, we expect to generate revenue of approximately RMB195 million in the first quarter of 2011.

(Source: PR Newswire, 2011-03-22)

As previously disclosed in September 2010, the Audit Committee retained advisors and commenced an internal review into whether the Company's internal controls and processes met the standards required of a NYSE-listed company. Provided that the Audit Committee and its advisors receive complete access to requested documents, the review can be concluded by the end of the second quarter of 2011. Accordingly, the Board of Directors is not in a position to approve or otherwise ratify the Company's presentation of the unaudited results for the fourth quarter and fiscal year ended December 31, 2010 at this time. The Company's unaudited results for the fourth quarter and fiscal year ended December 31, 2010 are subject to change pending the completion of the audit and the internal review.

(Source: PR Newswire, 2011-03-22)

    see all Business Outlook notes

 Analyst Coverage (show less)
2011-05-05Rodman & RenshawDowngradeTerminatedn/a
 

Effective immediately, we are terminating coverage on Duoyuan Global Water Inc. to better allocate resources within our coverage universe. Our last rating for DGW was Under Review / Speculative Risk. Investors should not rely on our previously published financial projections.

2011-04-06Rodman & RenshawDowngradeUnder Reviewn/a
 

We revised our rating on DGW on March 23rd 2011 after the 4Q10 earnings release based on the fact that the third party review has been further delayed to the end of 2Q11. The stock has been trending lower since then. We are removing our financial projections for DGW and putting the company Under Review until we get further clarity on the third party review.

2011-04-05Piper JaffrayDowngradeSuspendedn/a
2011-03-23Rodman & RenshawDowngradeMarket Performn/a
 

We are revising our rating on DGW from Market Outperform to Market Perform. We believe the stock will remain in limbo until the Skadden led internal review is complete. When the review was initiated (at the end of September 2010) the expected timeline for completion was one to four months. Management now expects the review to only be complete by end of 2Q11. Though the company continues to report healthy operational execution we believe the stock will only reflect this in the form of an appropriate multiple once Skadden reports its findings. We will revisit our rating upon the completion of the internal review.

2010-11-17Rodman & RenshawReiterationOutperform$24.00
 

DGW reported 3Q10 revenue and GAAP net income of $51.5 MM and $13.5 MM, with diluted Earnings Per ADS of $0.55, compared to our expectations of $47.9 MM, $11.3 MM, and $0.46, respectively. On a non-GAAP basis, which excludes a share-based compensation of $0.14 MM, net income and earnings per ADS should be $13.7 MM and $0.55, compared to our estimates of $11.4 MM and $0.46. Top-line grew by ~37.8% Y-o-Y and 18.9% sequentially. Gross profit stood at $23.7 MM or 46.1% gross margin, compared to $18.5 MM or 49.5% in 3Q09 and $20.7 MM or 47.8% in 2Q10. GAAP-net income was $13.5 MM, compared to $10.8 MM in 3Q09. Diluted EPS was $0.55, while Non-GAAP net income and diluted EPS were $13.7 MM and $0.55, respectively. The company ended the quarter with $152.6 MM in cash while accounts receivable and inventory stood at $40.5 MM and $8.6 MM.

CCTV Campaign Ended: After a third-party analysis, the company decided to terminate the CCTV advertising campaign in September 2010. This decision has reduced the selling expenses by 22.2% Y-o-Y, due to a RMB 6 MM refund upon the termination of the CCTV contract. Going forward, management expects selling expenses to be in the range of 5%~7% of total revenue.

CapEx Plan Raised: Management has raised its goal of capital spending for 4Q10 and FY11. For 4Q10, management expects a total CapEx of RMB 233 MM ($34.8 MM), of which $23 MM will be used for building construction, $5 MM for licensing expense, and $6.8 MM for equipment purchases. For FY11, total CapEx is expected to reach $92 MM. Management also indicated that guidance for the aggregate CapEx for the next two year has been raised to $209 MM from $165 MM issued previously.

Near-Term Growth Drivers: We believe near-term growth drivers should include (1) acceleration of China's demand for water treatment equipment imposed by the upcoming 12th Five-Year Plan. (2) additions of new distributors across China. (3) New product launches and new licensing agreement signed.

Guidance & Estimates: Management maintained 4Q10 revenue guidance of RMB 210 MM, or ~$31.3 MM, implying a 29% Y-o-Y growth for the full year. We are now projecting 4Q10 revenue, net income, and diluted EPS of $34.2 MM, $8.6 MM, and $0.35, leading to full year estimates of $152.6 MM, $37.2 MM, and $1.52. For FY11, our projections are $178.3 MM, $40.3 MM, and $1.61, respectively.

Valuation: At current levels DGW is trading at P/E multiples of ~8.4x and ~7.9x to our FY10 and FY11 estimates. These multiples are well below industry averages of 17.6x and 16.6x. We believe DGW should be trading, at a minimum, in line with the industry given the growth opportunity associated with it. We are comfortable maintaining a $24.00 price target for DGW, which translates into P/E multiples of 16x and 15x to our estimates for FY10 and FY11 EPS. 


    see all Analyst Ratings

 Recent Financings
2010-01-29Priced$104.58 mill3.55 mill shares$29.50
DGWIY
Waste & Water Treatment

COVERAGE SUSPENDED OR TERMINATED
 
READ: Score Cards Explained
SAFETY/RISK SCORE
EXTREME RISK
DETAILS: Safety/Risk Model for DGWIY
Current Price:  n/a
F10k Day (2009-06-24): -100.00%$21.87
2009 Close: -100.00%$35.78
2010 Close: -100.00%$12.77
High (2012-02-17): -100.00%$1.00
Low (2012-05-30): -100.00%$0.18
Exchange:
Market Capitalization: n/a
Total Shares: 24.33 mill
Float: n/a
Avg Volume: n/a
Last Quarter: 2010-09-30
Revenue (MRQ): 51.52 mill
Net Income (MRQ): 13.66 mill
Op. Cash Flow (MRQ): 10.80 mill
all financial data provided without warranty