SSI (No1 Stock on ASX 30/6/2005) and GCN

[steve fleming]

GCN - Go Connect - got a mention on the HWW thread...

just thought i'd raise this little query with you share traders out there- would appreciate any feedback/answers

as Tommy correctly pointed out, GCN was one of the first free ISP's, since then it has develepod technology similar to Real Player which allows one to view movies/video content on Mobiles and other applications, and has a diverse number of other revenue streams....it has some pretty impressive relationships with Microsoft, O2, etc...etc....it has also recently appointed the son of one of Aus's wealthiest families as an executive director.( and no..not a Packer/Murdoch, luckily/and or otherwise)...anyway the talk is that this company has a lot of potential...slight problem in that at the moment its not making money and burning cash!!....but anyway.....

the thing is ...GCN has: 348mill share on issue
@.05 cents market cap = $17.5 million


now of these shares 188,000,000 (54.6%) are owned by its listed parent Sino Securities International Limited (SSI) = worth $9.5 million (sino.com.au)

You would think that the market would value SSI ( a little Melbourne- based investment banking co, been around for 15 or so years) at say about $12 - $15m, given its $10m interest in GCN(+ premium for control) and its other bits and pieces and value as a listed entity etc..etc.....


But no...SSI at 16cents is currently valued at $2mil....say you attribute a value of $1m to SSI's other interests (SSI has no debt...save trade payables)....then the market is only valuing its $10mill GCN investment at say $1million!!!!! ( rough estimations only)

which begs the questions:

1) CURRENTLY.... if you want exposure to GCN, why not just get it through SSI where you can effectively buy a GCN share for a tenth of the price, and for less risk? - ( ie if things go bad for GCN you still have SSI's other interests to fall back on ) ( the ultimate in Finance/CAPM theory - HIGHER returns for LOWER risk )!!!!

2) BUT!!!!!!! ......if things turn out well for GCN....say they reach the 60 cents that the broker's report ( 12 month price target ) on the GCN Website (goconnect.com.au)suggests MAY be possible....that would give GCN a market cap of $208million .......and SSI's 54.6% interest worth $114million .One wonders what impact (if any!!!) this may have on SSI"s market cap (which currrently stands at $2m) given that ( in the event that GCN does go reach 60 cents) it would have an investment in a subsidiary worth $114 million......? hmmmmmm.........



Am i too simple?....am i missing something?.why such a difference in value between SSi and GCN?...have i had a couple too many beers ( Jimmy Squires - sorry Robbo!!) in the city after a tough friday in the office? ....or am i just talking sh*t to myslef about two stocks that noone, cept me, gives a t*ss about? Most importantly, why i am still at home on a Friday night, typing out some post which is taking forever when i could be out drinking more jimmy squires?

Some wise man ....or could have been wise woman...just never know with these internet nicknames...anyway some wise person...., alot smarter than me, on another forum, sometime ago...once said about SSI, and i quote this wise person " SSI has to be the dodgiest stock on the ASX"( and that is one hella rap! i was most impressed).....because remember for every seller there is a buyer....remember for every buyer there is a seller.......remember there are TWO sides to every story......the question is...is the SSI/GCN story going to be a fairytale with the happiest of endings or everyones worst nightmare....who knows?.....only time will tell.......hmmmmm..........

Cheers

Steve

[tommy]

GCN is an interesting company STEVE and thanks for starting this thread!
Due to my mobile technology fetish, I have decided to put my two cents worth

For those not familiar with GCN, may I suggest you read:
http://www.goconnect.com.au/corporate/pdf/research.pdf

In my opinion, I think it will be TOUGH for this company to gain the critical mass required to turn cashflow positive... the only product/service/technology that appears to be a potential money maker is their mobile video offering, m-Vision.
I will NOT comment on their other stuff, as they face way too much serious competition within an already established market and do not appear to have a competitive edge against any of the current market leaders.

"m-vision" is "a unique media delivery platform for mobile devices that gives you the power of television on the go. m-Vision truly is mobile entertainment, available anytime, anywhere" (directly quoted from their website).
http://www.m-vision.tv/

m-vision seems like a good idea, and personally, I like it a lot. Unfortunately, however, that's got nothing to do with whether it will make enough money for GCN!

First, they need to make available a wide variety of high quality content on m-vision platform, as aptly pointed out in the above report. No one is going to download their software and subscribe to their pay service if the content is not compelling. But who is going to invest more to improve the content if there isn't a big audience on this platform? I assume they are going to have to outsource the majority if not all of the content production to content providers, but content providers are going to be reluctant to invest a lot of money in a yet-to-be-established media platform. Unfortunately I do not understand m-vision's business model in terms of content strategy in association with revenue streams so I hope someone can enlighten me... (licensing and subscription? commission from content providers?)

Secondly, they need more partnerships and licensing arrangements with hardware manufacturers/mobile carriers so that their software can be preinstalled in mobile devices and mobile phones. The fact that it's dedicated to Microsoft is great, but whether that alone is enough to gain critical mass is highly questionable IMHO. They are also taking a huge risk by basically isolating themselves from the non-Microsoft league, namely, those operating Palms (in the PDA market) and Symbian (mobile phone OS). You have to remember that Microsoft is essentially an OS and software company for PCs and has only recently entered the field of hardware (game console= Xbox) and mobile devices (OS: Pocket PCs). It may take quite some time for Microsoft to establish dominance (if ever) in the mobile arena, especially because they are going to have to compete against Sony/Ericsson, Panasonic, Toshiba, Samsung, Nokia and other such heavyweight hardware manufacturers with a global presence which are not necessarily Microsoft-friendly (despite their piecemeal alliances in some business segments).

Interest shown by Motorola and O2 Malaysia is encouraging but far from compelling in this extremely competitive field. Approaching mobile carriers like Telstra (for upcoming i-mode on 2.5G and eventually FOMA on 3G) may be a good idea, but perhaps Singtel (Optus), Hutchison ("3") and Vodafone may be better considering that they operate in more than one country... it would be absolutely brilliant if they can get endorsement by Japanese mobile carrier DoCoMo who now has i-mode operating in Europe as well. If GCN can persuade these companies to endorse the m-vision platform, they will gain the exposure and subscriber base they need internationally. Without such alliances, m-vision might just disappear before decent content is provided, before it is really given a chance.

One technology company that is already aggressively experimenting in this mobile content technology field is Macromedia, see http://www.macromedia.com/mobile/.
Strategically, GCN can learn a lot from them.

In terms of mobile video, NTT DoC

[steve fleming]

Hey Tommy,

some very good points you raised about GCN... you obviously are very knowledgeable in this area.... i couldn't agree with you more about the fact that GCN needs good content and critical mass before it has any chance of being profitable...however i note that the company is concentrating on these areas ....in this regard they have recently negotiated with the ABC to display content. ....but until you start to see the cash coming through the door the company is going to remain very speculative......

That said....and i note your comments concerning the possibility of being taken over by Microsoft...in fact the chairman sorted hinted at such at the AGM ...."Any major media company eyeing the mobile media market will find that a strategic alliance with GCN or “ownership” of GCN’s m-Vision platform will provide the early mover advantage to secure a substantial portion of the mobile media market."

Now....and this is where SSI comes into the picture......

if a "major media company" was looking at buying into GCN, the first port of call would be to GCN's major shareholder, SSI , essentially a venture capitalist.....who would be pretty happy to liquidate their investment...one would imagine!!!

Now ..... hypothetically lets say this "major media company" offered SSI 5c per GCN share ( ie the 12 month low price of GCN!!) ....then SSI would receive $9.5 million cold hard $$$$'s....not bad for a company which at the moment only has a market cap of $2 million......realistically though say they offered 10 cents share ....this would give SSI $19 million cold hard $$$$'s......not bad for a company which at the moment only has a market cap of $2 million

so essentially i am saying that there MAY POSSIBLY be some upside in SSI ...should one be willing to take the risk......

And of course, should SSI hold on to their stake, and GCN is succesful.......well....hmmmmmm....but of course one must take into account the risks that you have raised in your post

anyway mate...good stuff.....hope you keep that mobile technology fetish under control!!!!

Cheers

Steve

[tommy]

Not much happening with GCN lately, no rumours or hypes either... perhaps not surprising considering m-vision's poor penetration so far?

Look at how many people have downloaded m-vision from PocketGear,com: 9,331

http://www.pocketgear.com/software_detail.asp?id=14955

and PDAtopsoft.com: 1794

http://tungsten.pdatopsoft.com/softw...dex.php?ss=88&

Far from becoming a mobile platform... at least for the time being.

[steve fleming]

Anyone have any thoughts on this announcement:....or is it just another dodgy SSI offering?


-------------------------------------------------

SINO SECURITIES INTERNATIONAL LIMITED
ABN 99 006 620 739

23 March 2005 No of pages: - 1 -
(including this page)
Australian Stock Exchange
Company Announcements Platform
Dear Sir/Madam
Re: Mandate to manage listing of China Gaming Holding Ltd
We are pleased to advise that Sino Investment Services Pty Ltd, a wholly owned subsidiary of Sino Securities International Ltd (“SSI”), has been awarded a mandate to manage the listing of China Gaming Holding Ltd (“CGH”) on major Western stock
exchanges, including the ASX. CGH will be the first gaming business in China to be listed on any major stock exchange which international investors can participate in.

CGH has already a working relationship with ASX listed SSI subsidiary, GoConnect Ltd (“GCN”) in developing mobile gaming in China, making use of GCN’s mobile gaming application, Mobile8888. An Initial Public Offering (“IPO”) will be made with exclusive entitlements to invest in CGH on a one for one basis going to
shareholders of SSI and GCN. Shareholders of SSI and GCN will need to have a minimum number of shares in either company in order to qualify for the exclusive entitlement offer. Further details of the entitlement offer and that of the IPO will be provided at a later stage.
Yours faithfully
Richard Li
Managing Director

[dieter]

No body,or very few people recgnize what the above means. Simply put GCN/SSI shareholders will get a free ride to a gambling venture in CHINA---THE WORLDS CAPITAL OF GAMBLING....When HK investors wake up we will see sever tpwards action...

Steve Fleming, Richard Li is he the one that sucked Ziggy & Telstra in.

[steve fleming]

quote:Originally posted by ENIGMA

Steve Fleming, Richard Li is he the one that sucked Ziggy & Telstra in.

Enigma...this should clear things up---

Monday, April 8, 2002
The other Richard Li

LACHLAN COLQUHOUN

Before Australians had heard of Richard Li Tzar-kai, son of Li Ka-shing, they knew about Richard Li, the stockbroker from Melbourne company Sino Securities.

Like the Pacific Century CyberWorks chief, Melbourne's Richard Li was born in Hong Kong, but went to Australia at the age of 19 to study and it has been his home since.

After 30 years in Australia, Mr Li has built up a profile in the business world as an investment banker and venture capitalist through his role as managing director of Sino Securities, one of Australia's first listed investment houses.

Mr Li, 49, jokingly lays claim to the title of the "real" Richard Li.

"I must be the original Richard Li - the other one is just a spring chicken," he said.

The age difference, however, has not stopped the Australian press from frequently confusing the two men, to the extent that photographs have been mixed up erroneously on articles about their various business activities.

"There was a big article in one of the local newspapers about the other Richard Li, with my photograph, saying I had lost a billion dollars," Mr Li said.

"I had some friends who rang me and said I should be suing the paper, but I thought that if I could afford to lose a billion there must be something good about me - it was good press."

While Hong Kong's Richard Li is by far the more celebrated and widely known of the two, Melbourne's has some significant business achievements of his own, even if - a market capitalisation of about A$10 million (HK$41.3 million) - his company is playing in a different league.

Beginning his career as a fund manager for National Mutual, which is now AXA Asia Pacific, Mr Li went to work for Australian investment house Ord Minnett before founding Sino Securities, which listed on the Australian Stock Exchange (ASX) in 1987, six months before the market crash of that year.

In its earliest incarnation, Sino Securities was known as Australia's main "Chinese connection", as Mr Li brought mainland and Hong Kong companies to Australia for listing on the Australian exchange.

These were the days when so-called "China concept" companies were lured to Australia for listing as part of the ASX's plan to spread its sphere of influence into the Asia-Pacific, and as an opportunity for Australian investors to have access to what was then a boom in China stocks.

It even led to the creation of a "China Index" for these companies listed on the ASX, but all that was swept away by the Asian crisis of 1997-98 and the increasing globalisation of share trading across borders.

Sino has been involved with about 10 floats over the years and they have not all been without controversy.

In 1996, Mr Li had his most concentrated burst of publicity when the Australian float of Guangdong Corp, which Sino underwrote, became ensnared in politics in his home state of Victoria.

Felicity Kennett, the wife of then-Victoria premier Jeff Kennett, was allegedly allocated shares in Guangdong after the 1993 float had closed oversubscribed.

Mr Li always steadfastly rejected the claims of political favouritism which sprang from the incident, but for many Australians this unwanted publicity was Mr Li's 15 minutes of fame.

Away from that spotlight, Mr Li concentrated on his business, which at that time was largely based around using his Chinese connections to set up business opportunities linked to his network of investors in Australia.

But after the good years of the early and mid 1990s, the 1997-98 crisis prompted a major change of strategy.

"The Asian crisis hit that market for Chinese companies very hard, so back in 1998

[steve fleming]

quote:Originally posted by dieter

No body,or very few people recgnize what the above means. Simply put GCN/SSI shareholders will get a free ride to a gambling venture in CHINA---THE WORLDS CAPITAL OF GAMBLING....When HK investors wake up we will see sever tpwards action...

Dieter, i hope you are right, my friend,... I hope you are right.

An SSI price increase is way overdue.

Another micro-cap security which is fundamentally way underpriced in my opinion.

[dieter]

quote:Originally posted by steve fleming

quote:Originally posted by dieter

No body,or very few people recgnize what the above means. Simply put GCN/SSI shareholders will get a free ride to a gambling venture in CHINA---THE WORLDS CAPITAL OF GAMBLING....When HK investors wake up we will see sever tpwards action...

Dieter, i hope you are right, my friend,... I hope you are right.

An SSI price increase is way overdue.

Another micro-cap security which is fundamentally way underpriced in my opinion.

Found on that other site--usefull background
and ssi ---a new deal


SSI and GCN have announced that they are soon to JV in China in mobile gameing so I trhought I would share this and show how gaming stocks with Macau interest, a place with 200,000 people, can be so very hot. Then what about the place with 1.3 billion people who China Gaming Holding will service. Afterall, Macau concept stock frenzy is due to the concept that it is close to the 1.3 billion people who may gamble there, but what about the place where the 1.3 billion actuallly reside???

These stocks have gone up by 10 to 30 times in the past 12 months. How many times should the proposed new listing to be handled by SSI go up by?

SSI and GCN shareholders will get entitlements to this.



The article I found was this


WSJ's Heard on the Street: Macau casinos may be good bet Wednesday, February 23, 2005

By Craig Karmin, The Wall Street Journal

Global investors are placing a big bet on Chinese gambling.


Shares of Las Vegas Sands Corp., which operates a lucrative casino in China's Macau territory, have soared 64 percent on the New York Stock Exchange since the company's initial public offering of stock in December. Wynn Resorts Ltd., which is poised to open its own Macau casino in 2006, has jumped 105 percent over the past 52 weeks in Nasdaq Stock Market trading.


But money managers eager to double down their bets are playing two Chinese companies with the most direct exposure to Macau's gambling, hotels, transportation and tourism: Shun Tak Holdings and Melco International Development. Both stocks are listed only in Hong Kong, but U.S. investors can buy them through certain brokers, usually with an additional fee.


Analysts say it is only a matter of time until Macau surpasses Las Vegas as the world's largest and most-profitable gambling and convention center. The former Portuguese colony is just 40 miles from Hong Kong and is the only place on mainland China where casinos are permitted.


"This is a real long-term growth story," says Alexander Muromcew, portfolio manager with TIAA-CREF. The big pension fund -- formally known as Teachers Insurance and Annuity Association-College Retirement Equities Fund _ owns shares of Shun Tak, Melco, and Far East Consortium, a Hong Kong-based property company that is developing Macau casinos.


With Chinese enthusiasm for gambling and the territory's boomtown prospects, there is little doubt these stocks offer a chance to hit the jackpot. But since these stocks already have had a big run and with questions over investor protections _ the odds may be longer than many investors think.


There already are concerns about overdevelopment as new operators rush in hoping to lure the world's high-rollers, many of them Asians, away from Las Vegas. Goldman Sachs warns that the number of Macau gambling tables is poised to rise to 3,700 by 2008 from 845 at the end of last year. That compares with about 2,500 tables currently on the Las Vegas strip. "If demand fails to meet the new supply, this could lead to declining returns in Macau's gaming sector," Goldman says.


Me