Archive | November, 2011

EastBridge (EBIG): Capitalizing on China’s Education Sector

EastBridge (EBIG): Capitalizing on China’s Education Sector

EastBridge Investment Group Corp (OTCBB: EBIG), a provider of financial services designed to help emerging companies access U.S. capital markets, is poised to capitalize on China’s rapidly growing education sector. Its clients, Tsingda and Wonder Education, operate alongside companies like Global Education & Technology Group (NASDAQ: GEDU), which has more than doubled since it agreed to be acquired, and Chinacast Education Corporation (NASDAQ: CAST), which has been trading 30% higher amid M&A talks, last week.

China’s Enormous Education Market

China has approximately 400 million students in its educational system and a 99% attendance rate to primary school. With more than 70,000 private schools opening since the 1980s and significantly higher spending on education as a percentage of income than the United States, the country has become a great opportunity for for-profit educational institutions.

The growth in the market can be clearly seen in the results of some larger companies in the space. For instance, the industry’s largest publicly traded company, New Oriental Education, saw revenues that grew from $132 million to more than $557 million between 2007 and 2011, while its net income more than tripled from 20 cents to 65 cents per share.

Cottage industries surrounding this vast educational industry are also rapidly growing. For example, after school programs are far more popular in China than the U.S., while vocational schools have been soaring in popularity as a quick way to gain an education and find a job without spending years in a traditional university.

Wonder and Tsingda Offer Great Exposure

EastBridge Investment Group owns approximately 3.4 million shares of Wonder Education and more than 2 million shares of Tsingda Education, according to regulatory filings made with the SEC. These two companies represent strong and rapidly growing companies within the booming for-profit education market in China, making them very valuable for EBIG shareholders.

Tsingda Education is a leading provider of online educational services in China, offering classes through pre-recorded lessons and in real-time via its virtual internet classroom. As of December of last year, the company operated 2,346 learning centers across the country, including 21 company-owned and 2,325 franchised locations.

Wonder Education has been named one of China’s ten major brands in computer education for several years by the Ministry of Information Industry, the Ministry of Labor and Social Security and Computer World. The company’s seven vocational schools have relationships with more than 20 provinces and municipalities and serve more than 12,000 students.

A Great Investment Opportunity

EastBridge Investment Group unlocks value for shareholders in several ways. First, the company offers equity dividends to its shareholders. Second, the remaining equity is held on its books as a valuable liquid asset. And finally, any stock that is sold is booked as revenues and net income that help drive growth moving forward.

Meanwhile, earnings multiples for China’s education sector continue to look strong with several recent buyouts. The average P/E in the education industry stands at about 22x, which is the highest in the country and compares favorable to the 16.3x average. And with an average market capitalization of $621.8 million, it’s also one of the most valuable industries.

The company’s stakes in Tsingda Education and Wonder Education could unlock significant value in its shares. Despite some market issues during the past few months,, the company is moving forward towards listing Tsingda and Wonder on a U.S. exchange, while both companies look for opportunities  to grow its business. With these near-term catalysts in mind, investors may want to take a closer look at EastBridge.

To learn more about EastBridge, see the following links:

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Cantronic to Provide Kaili City Video Surveillance System for $2.6 Million

Cantronic to Provide Kaili City Video Surveillance System for $2.6 Million

Cantronic Systems Inc., (“Cantronic” or the “Company”) (TSX VENTURE:CTS)(PINK SHEETS:CRIXF) announced today that it has been awarded a contract by the local China Unicom (one of the three main telecom operators in China) to provide an expansion of the city-wide networked video surveillance system (“Safe City”) to Kaili city which is located in China’s Guizhou province and subsequent maintenance service totaling RMB 16 million (approximately Canadian $2.6 million). Cantronic will supply and install complete solutions that will network together 200 new surveillance cameras with 1,463 cameras already installed in banks, gas stations and public schools with Kaili city’s existing Safe City video surveillance system. Kaili city’s existing Safe City system was originally supplied and installed by Cantronic in 2009 and this is its first of many possible expansions. Cantronic would receive payments against deliveries of cameras and software and then progress payments to a total of 90% of the supply and installation contract value of RMB13.4 million (C$2.2m) at completion of installation, expected in about 3 months. The award also includes maintenance service valued at RMB2.6 million ($0.4m) for the 5 years after installation.

This current expansion is a part of the new regional sky net crime prevention video surveillance monitoring system (“Sky Net”). The local Sky Net system is an expanded Safe City program to allow each city’s Safe City systems in the South Eastern region of Guizhou Province to be networked together as well as to integrate new and existing cameras in key commercial facilities such as banks, gas stations, schools, hotels, office buildings and residential complexes throughout the region. In this regional Sky

Net system, Cantronic’s video networking platform and management software is the key to network such a great number of cameras over such a large area together.

“This project award reflects our experience in providing sophisticated city-wide networked video surveillance systems for China’s expanding Safe City and now Sky Net programs. We were initially approached by the local police bureaus to take on this expansion in the beginning of the year which they want to pay us in 3-5 years after completion. We declined to take on the mandate due to payment term issues and finally were able to convince them to work through China Unicom as the primary contractor and financing partner for this project. This allows us to be paid very quickly by China Unicom and have the resources to take on many more such projects together with a key telecom operator in the region. With this new project arrangement model as well as Kaili city being the capital and largest city of the South Eastern region of Guizhou province, we believe we will have the ability to carry on further expansions of this Sky Net program to other 14 cities and counties in the region without the constraints of working capital. There are more than 70 cities in China using Cantronic software solutions with expansion opportunities such as this amounted to $13 billion over the next 9 years,” said James Zahn, President and CEO of Cantronic Systems Inc.

About Cantronic Systems Inc.

Cantronic Systems Inc., based in Coquitlam, British Columbia, Canada, manufactures, distributes, and provides training and services in the fields of IP-based networked video security surveillance technologies, specializing in networked video management software and video analytics, IP cameras, speed dome cameras, high definition video surveillance cameras and night vision surveillance systems for demanding security and surveillance applications.

Cantronic, through its China subsidiaries Cantronic Security Systems (China) Co. Ltd (“CSSC”), Beijing Advanced Videoinfo Technology Co. Ltd. (“AVINFO”), and Actiontop Electronics (Shenzhen) Co. Ltd. (“Actiontop”) provides high-speed and digital networked video surveillance solutions to government and corporate customers in China.

Cantronic is a Tier 1 issuer on the TSX-V exchange, trading under the symbol CTS. For further information about Cantronic, please visit our website atwww.cantronicsecurity.com.

Forward-looking statements

This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Cantronic Systems Inc. and the markets in which it operates. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Cantronic to be materially different from any future results, performance or achievements expressed or implied by said forward-looking statements.

Forward-looking statements include, but are not limited to: the completion of the Proposed Transaction, anticipated share capital following completion of the Proposed Transaction, expectations, opinions, forecasts, projections and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved.”

Readers are cautioned not to place undue reliance on such forward-looking statements. Forward- looking information is provided as of the date of this news release, and Cantronic Systems Inc. assumes

no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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Highpower International, Inc. Reports Third Quarter 2011 Financial Results

Highpower International, Inc. Reports Third Quarter 2011 Financial Results

Highpower International, Inc. (NASDAQ: HPJ), a developer, manufacturer and marketer of nickel-metal hydride (Ni-MH) and lithium batteries and related products, today announced financial results for the third quarter ended September 30, 2011.

Business Highlights

  • Net sales were $28.1 million for the third quarter of 2011, an increase of 1% over the third quarter of 2010; net sales for the nine months ended September 30, 2011 were $84.8 million, an increase of 10% over the first nine months of 2010
  • Lithium battery net sales were $6.1 million for the third quarter of 2011, an increase of 33% over the third quarter of 2010; lithium-ion battery net sales for the nine months ended September 30, 2011 were $15.9 million, an increase of 43% over the first nine months of 2010
  • Marcum Bernstein & Pinchuk (MarcumBP) engaged as Highpower’s new independent registered public accounting firm

Management Commentary

“We were pleased with the performance of our lithium-ion business during the quarter as this segment continued to show strong sales and volume traction, resulting in lithium battery revenues being up 43% year-to-date,” said Mr. George Pan, Chairman and Chief Executive Officer of Highpower International. “Highpower’s lithium battery business line, which produces cleaner, greener, rechargeable batteries, is a key area of focus for our management team. We believe opportunities in the lithium battery space will serve as a major growth catalyst for our business in 2012 and beyond. As a trend, more and more customers are demanding higher capacity and cleaner battery options and we are clearly making strong inroads in capturing market share.”

“Although our lithium battery segment has strengthened, we have faced a tough global macro operating environment this year, which has certainly impacted our Ni-MH segment growth and profitability. Despite the lower sales volume and increasing raw material and labor costs, we remain committed to our mission of creating a world-class, international clean battery company. To that end, we are expanding our global sales team to pursue growth opportunities in both our Ni-MH and lithium segments. These investments today in our business, staffing, and infrastructure, will position us for growth, profitability, and increased shareholder returns in 2012,” concluded Mr. Pan.

Mr. Henry Sun, Chief Financial Officer of Highpower International, added, “Through the first nine months, we have faced headwinds from uncertain global demand, raw material price swings and pricing pressure. We continue to work with our major customers on price increases to reflect our existing cost structure, as well as our supply chain to secure longer-term contracts and we expect much of this margin pressure to be alleviated in the next few quarters. In addition, we have focused on reorganizing our management structure and have dedicated more attention on employee training to enhance efficiency.”

Third Quarter 2011 Financial Results

Net sales for the third quarter ended September 30, 2011 totaled $28.1 million, a year-over-year increase of 1% compared with $27.8 million for the third quarter ended September 30, 2010. The slight increase in sales for the third quarter was primarily due to an increase in both unit volume and average selling price of our lithium battery units, but was offset by a decrease in the number of Ni-MH battery units sold. In addition, our new materials business had revenues of $3.8 million for the third quarter of 2011, an increase of $1.1 million over the prior year period.

Third quarter 2011 gross profit decreased to $3.9 million, as compared with $5.9 million for the third quarter of 2010. Gross profit margin was 13.8% for the third quarter 2011, as compared with 21.1% for the third quarter of 2010. The year-over-year decrease in gross profit margin for the third quarter of 2011 was primarily due to a rise in raw materials prices, primarily for nickel and rare earth materials and the resulting increase in cost of sales for our Ni-MH and to a lesser extent our lithium batteries. In addition, the increase in revenues in our materials business, which has lower gross profit margins than our other business segments, contributed to the lower overall gross profit margin for the quarter.

Selling and distribution costs, including non-cash stock-based compensation, were $1.5 million for the third quarter of 2011, as compared with $1.1 million for the comparable period in 2010.

General and administrative expenses, including non-cash stock-based compensation, were $2.2 million, or 8.0% of net sales, for the third quarter of 2011, as compared to $2.2 million, or 7.8% of net sales, for the third quarter of 2010.

Loss from operations for the third quarter of 2011 was $839,000, as compared with income from operations of $1.7 million for the third quarter of 2010. Included in these results were non-cash stock-based compensation expenses of $335,000 and $17,000, respectively.

Net loss for the third quarter of 2011 was $665,000, or ($0.05) per diluted share, based on 13.6 million weighted average shares outstanding. This compares with third quarter 2010 GAAP net income of $1.4 million, or $0.11 per diluted share, based on 13.7 million weighted average shares outstanding.

Net loss for the nine months ended September 30, 2011 was $415,000 or ($0.03) per diluted share, based on 13.6 million weighted average shares outstanding. Included in this loss was $612,000 of non-cash stock-based compensation.

Balance Sheet

At September 30, 2011, Highpower International had cash, cash equivalents and restricted cash totaling $23.8 million, total assets of $90.9 million, and stockholders’ equity of $29.2 million. Bank credit facilities totaled $89.9 million at September 30, 2011, of which $38.6 million was utilized and $51.3 million was available as unused credit.

Outlook

Based on our current expectations for global demand for the rechargeable battery market in 2011, the outlook for our key raw material input prices and our planned increased investment in sales and marketing and research and development, we are updating our financial guidance for 2011. We expect net sales to be between $110 million and $120 million. We expect net income to be approximately break-even on a GAAP basis, which includes non-cash stock-based compensation expenses.

Conference Call and Webcast

The Company will host a conference call today at 7:00 a.m. Pacific time/10:00 a.m. Eastern time to discuss these results and answer questions.

Individuals interested in participating in the conference call may do so by dialing 888-549-7750 from the U.S. or 480-629-9722 from outside the U.S. and referencing the reservation code 4485472. Those interested in listening to the conference call live via the Internet may do so by visiting the Investor Relations section of the Company’s Web site at www.highpowertech.com or www.InvestorCalendar.com.

About Highpower International, Inc.

Highpower International, Inc. develops, manufactures and markets powerful, efficient, and environmental rechargeable nickel-metal hydride (Ni-MH) and lithium batteries and related products for use in a variety of devices and equipment including wireless communications, electronics, lighting, backup power, electric tools, and transportation, etc. Highpower International’s products are distributed worldwide to markets in the Americas, Europe, China, and Southeast Asia. For more information, visit http://www.highpowertech.com.

To be added to the Company’s email distribution for future news releases, please send your request to HPJ@finprofiles.com. Company news can also be found at http://www.highpowertech.com/InvestorNews.aspx?type=FinancialRelease.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and the Company’s future performance, operations and products. Such statements involve known and unknown risks, uncertainties and other factors that could cause the Company’s actual results to differ materially from the results expressed or implied by such statements. For a discussion of these and other risks and uncertainties see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s public filings with the SEC. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward-looking information contained in this press release.

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EastBridge (EBIG) Releases AREM Pacific Investor Factsheet

EastBridge (EBIG) Releases AREM Pacific Investor Factsheet

EastBridge Investment Group Inc. (OTCBB: EBIG), a provider of financial services to emerging companies looking to go public on U.S. exchanges and those looking to form joint ventures, recently released an investor factsheet on client AREM Pacific Corporation. AREM Pacific is Chinese luxury resort developer similar to companies like Jinling Hotel Corporation Ltd. (SHA: 601007) and Shanghai Jinjiang International Hotels Development (SHA: 900934).

AREM Pacific Business Overview

AREM Pacific Corporation began as an Australian winery and small marine leisure boat manufacturer in China, but has since become the first U.S. company setting up exclusive air-water-land resort and convention centers in China. Bringing together houseboats, aerochutes, seaplanes, and water recreation facilities, the company plans on offering a wide range of activities in many locations around six premium lakes and two ocean front locations. AREM Pacific offers a diversified investment opportunity in hotels, food & beverage, and other hospitality elements.

Recent financial results include:

  • Revenue 2008 :  $103,754  ,  Net Income: ($7,825) (audited)
  • Revenue 2009 :  $121548,  Net Income: $4,111 (audited)
  • Revenue 2010 : $100,821, Net Income: $4,437 (audited)

AREM Pacific Market Overview

China is the world’s third most visited country in the world. The number of overseas tourists was 55.98 million in 2010. As for the domestic demand, there are over 100 million Chinese whose incomes are commensurate with the incomes of the developed countries; yet, they have not had an opportunity to access these high end integrated resort facilities, because these facilities do not exist thus far in China. As a result, AREM believe there is a strong pent up demand.

AREM Pacific’s highlights within this market include:

  • Signed several master water front leaseholds at below market rates
  • When finished, these will be show case air-water-land resort & convention centers in China
  • Subleasing the land to the hospitality operators, who will build and operate their own sites
  • Low capital requirement and high ROI in a short time

AREM Pacific’s Recent Achievements

  • Signed a 40-year master leasehold on a lake front shore line with a total land area of 285 acres in Hunan, China. The lease cost is at a substantial discount to the market price, and the land will be developed into an air-water-land resort & convention center. A prominent hotel has already signed a sublease to use a parcel of the land to build and run a hotel on site for retail customers. AREM will put in a convention and resort center for conventioneers, together with private villas on the site.
  • Master leaseholds on five lakes and two ocean front land properties in China are being negotiated. AREM will also sublease these spaces out to the hospitality operators.
  • Exclusive distribution agreements in China for the aerochutes, sky cars, private hydro planes, houseboats and yachts from Australia have been signed. These vendors are ready to provide equipment at substantially reduced costs to AREM.

AREM Pacific Competitive Overview

AREM Pacific is the first and only company that introduces an integrated air-water-land leisure and provides high end hospitality services to China. These services include holiday resorts, conference / exhibition centers, marine facilities offering houseboats, seaplanes, hot air balloons, skycars, aerochutes and private planes.

Similar listed companies include:

  • Jinling Hotel Corporation Ltd. Nanjing provides guest rooms, restaurants and bars, meeting and events services, health and recreation services.
  • New Taohuayuan Culture Tourism Co., Ltd. owns and operates the Taohuayuan Inn hotel and resort, Xi’an offers hotel rooms only.
  • Shanghai Jin Jiang International Hotels Development Co. Ltd. is principally engaged in management and operation of hotels and restaurants.

About EastBridge Investment Group

EastBridge Investment Group focuses on high-growth companies in Asia, offering IPOs, Joint Ventures and Merchant Banking services. The Company targets industries in the education, internet, energy, mining and service sectors. To learn more about EastBridge Investment Group go to our web site: www.EbigCorp.com. To receive EBIG’s email alert, send a blank email to info@EbigCorp.com. Join us on Facebook at the following link: http://www.facebook.com/ebigcorp.

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