SINOHUB INC (SIHI) research, news, and more from GeoInvesting

Company description

Fri, 01 Apr 2011 04:00:00 GMT

SinoHub, Inc. is a leading electronics company based in Shenzhen, PR China which services clients worldwide. The Company's integrated contract manufacturing (ICM) business unit is currently focused on providing custom, private label mobile phones to customers in developing countries. This fast growing ICM segment is capitalizing on a trend by carriers and distributors to offer their own brands with features and functionality targeted at their local markets, including 3G smart phones, at competitive price points. The Company's electronic component sales and services (ECSS) business unit provides procurement-fulfillment, spot component sales and supply chain management (SCM) services to manufacturers and design houses. The company's SCM services include warehousing, delivery, import/export, and give its customers total transparency into their supply chains by delivering SinoHub SCM, a proprietary, Web-based software platform the company has been using for almost ten years. For more information, visit the Company's Web site at www.sinohub.com and the B2B Chips Web site at www.b2bchips.com .

Reverse Merger Filing

Investor Alert

Mon, 24 Sep 2012 04:00:00 GMT

SHENZHEN, China, September 24, 2012 /PRNewswire/ -- SinoHub, Inc. ("SinoHub" or the "Company") (formerly NYSE MKT: SIHI), an electronics company whose main business is manufacturing and distributing custom, private-label mobile phones, announced today that on September 19, 2012 it received a letter from NYSE MKT (the "Exchange") informing the Company that the Exchange had rejected its plan of compliance, which addressed the actions the Company had taken, or would take, to bring the Company into compliance with Sections 134 and 1101 of the NYSE MKT Company Guide (the "Company Guide"), and moved to immediate delisting proceedings. Full release.

Investor Alert

Mon, 27 Aug 2012 04:00:00 GMT

SHENZHEN, China, August 25, 2012 /PRNewswire-Asia/ -- SinoHub, Inc. ("SinoHub" or the "Company") (NYSE MKT: SIHI), an electronics company whose main business is manufacturing and distributing custom, private-label mobile phones, announced today that on August 21, 2012 it received a delinquency letter from NYSE MKT (the "Exchange") informing the Company that its Form 10-Q for the quarter endedJune 30, 2012 had not been received and that timely filing of such report is a condition for the Company's continued listing on the Exchange as required in sections 134 and 1101 of the Exchange's Company Guide. In order to maintain its listing, the Company must submit a plan by September 4, 2012 advising the Exchange of action it has taken, or will take, that will bring the Company into compliance with Sections 134 and 1101 of the Company Guide no later than November 19, 2012 (the "Plan").

SinoHub is preparing a Plan to submit to the Exchange on or before September 4, 2012 and estimates that it will file its Form 10-Q for the quarter ended June 30, 2012 with the Securities and Exchange Commission on or about September 15, 2012 and that it will regain full compliance with the Exchange's continued listing rules.

Comments & Business Outlook

Tue, 21 Aug 2012 04:00:00 GMT

SHENZHEN, China, August 21, 2012 /PRNewswire-Asia/ -- SinoHub, Inc. ("SinoHub" or the "Company") (NYSE Amex: SIHI), an electronics company whose main business is manufacturing and distributing custom, private-label mobile phones, announced today that it is unable to file its quarterly report on Form 10-Q for the quarter ended June 30, 2012 within the five-day extended period afforded to it pursuant to the Notification of Late Filing on Form 12b-25 that SinoHub filed with the Securities and Exchange Commission on August 14, 2012. SinoHub is unable to timely file its quarterly report because of a delay in retrieving information requested by our auditors to confirm prior period sales associated with our electronic component sales (ECP) business. This information is not related to our operations in the quarter ended June 30, 2012. SinoHub estimates that it will file its quarterly report on or aboutSeptember 15, 2012.

Preliminary and unaudited results for the quarter ended June 30, 2012 are as follows:

Total revenue: $22.6 million
Net loss: $2.7 million
Net cash used in operating activities: $1.2 million
Net cash used in investment activities: $16.3 million
Net cash provided by financing activities: $16.8 million
Total assets: $190.0 million
Total liabilities: $107.9 million
Total stockholders' equity: $82.1 million

Additional details will be provided with the filing of the Form 10-Q for the three months ended June 30, 2012. SinoHub cautions that all of these results are preliminary and subject to change following the completion of our review process for our financial results for such period and the impact, if any, of the completion of such review on the financial statements for the second quarter, and that the above preliminary and unaudited financial information provided herein does not represent all of the information that would normally be included in a quarterly report on Form 10-Q with respect to SinoHub's financial results.

Investor Alert

Tue, 21 Aug 2012 04:00:00 GMT

Preliminary and unaudited results for the quarter ended June 30, 2012 are as follows:

Comments & Business Outlook

Wed, 16 May 2012 04:00:00 GMT

First Quarter 2012 Financial Highlights

Total net sales increased 62.7% year-over-year to US$61.8 million in the first quarter of 2012 compared toUS$38.0 million in the first quarter of 2011.
Gross profit was US$1.6 million compared to US$7.7 million in the same quarter in 2011. Gross margin was 2.6% compared to 20.3% in the first quarter of 2011.
Cash provided by operations was US$1.8 million, compared with US$4.4 million in the first quarter of 2011.
There was a net loss of US$2.2 million in the first quarter of 2012, compared to net income of US$3.5 million in the first quarter of 2011.
Net loss per basic and diluted share were both US$0.07, compared to net income of US$0.12 per basic and diluted share, in the first quarter of 2011.

Business Highlights:

Commenting on the results, Sino Hub's CEO, Mr. Harry Cochran said, "Our results for the quarter demonstrate both the continuing challenges that we face following the loss of our largest ICM customer in the second quarter of 2011 and the progress that we have made in the strategic repositioning of Sino Hub as a custom mobile device manufacturer operating on a global basis. Our top line grew significantly in the first quarter but our bottom line continued to be impacted by the lower-margin business we accepted in order to utilize our capacity in the wake of the loss of certain higher margin business we had originally expected. This continues to be a challenge for us. Market conditions in our ECSS business are also challenging as margins have continued to suffer from intense competition and fewer profitable arbitrage opportunities. With the growth in sales and the resulting growth in receivables in the first quarter in a challenging economic environment, we assessed our accounts receivable and increased our bad debt reserve, which was the primary contributor to our loss for the quarter. However, we are pleased to see the continued expansion of our ICM customer base and significant growth in ICM revenue. ICM accounted for approximately 77.6% of our total net revenues for the first quarter, a significant increase on a sequential and year-over-year basis. As we have previously announced, we are strategically realigning our business by de-emphasizing the ECSS business segment due to the long-term structural challenges in that market, while placing greater focus on the development of our ICM segment, the global market for which is expected to continue growing at a healthy rate. We believe that a key challenge for us is to generate sales opportunities and scale which will allow us to improve our margins.

"A key element of this strategic realignment is our planned expansion into new markets in Braziland the Americas. As previously announced, we signed a Joint Venture Agreement with Ciao Telecom, Inc. on February 13, 2012 to build a factory to manufacture mobile phones and tablets in Brazil. While our efforts to acquire all necessary approvals and secure funding for the factory project are ongoing, we have already commenced our marketing efforts in Brazil for imported mobile phones and tablets manufactured at our facility in Shenzhen, PRC and hope to generate sales in the coming months. We continue to work with our joint venture partner and the local government authorities in Brazil to move the manufacturing facility construction project forward, and are optimistic on the long-term prospects for this new initiative. At the same time, we are working to further expand our customer base in ICM, especially for higher margin custom mobile phones and tablets in our core markets in Southeast Asia. While we expect to face continuing near-term headwinds as we effectuate our strategic realignment and work to sign higher margin and higher value ICM customers, we believe that our competitive advantages in ICM and the growth in the worldwide market for white-box mobile devices present us with attractive opportunities to deliver increasing value to our shareholders over time."

Business Outlook

SinoHub remains focused on the expansion of its ICM business segment by broadening and deepening its customer base in Southeast Asia and by entering new markets (primarily North and South America). The Company continues to work on the development of its joint venture Ciao Hub in Brazil, and intends to build a factory there to produce mobile phones and tablets, subject to receipt of sufficient financing. In the meantime, the Company will continue its ongoing marketing efforts in Brazil with its partner Ciao Telecom for imported mobile phones manufactured by Sino Hub in China.

Comments & Business Outlook

Fri, 30 Mar 2012 04:00:00 GMT

FOURTH QUARTER 2011 FINANCIAL HIGHLIGHTS

Total net sales increased year-over-year to US$65.3 million in the fourth quarter of 2011 compared toUS$58.5 million in the fourth quarter of 2010.
Gross profit was US$5.7 million compared to US$13.0 million in the same quarter in 2010. Gross margin was 8.7% compared to 22.2% in the fourth quarter of 2010.
Cash provided by operations was US$7.2 million, compared with US$4.2 million in the fourth quarter of 2010.
There was a net loss of US$0.5 million in the fourth quarter of 2011, compared to net income ofUS$6.8 million in the fourth quarter of 2010.
Net loss per basic and diluted share were both US$0.01, down from net income of US$0.24 per basic and diluted share, in the fourth quarter of 2010.

"In 2011, we faced a challenging environment in our ECSS segment due to a number of structural issues. While the overall fragmented nature of the market for electronics components in China provides a business opportunity for SinoHub, the increasing maturity of the 2G chip set market, which better enables potential customers to match supply and demand, and the lack of a clear market leader in the 3G chip set market has resulted in limited arbitrage opportunities and thereby constrained our ability to grow revenue in the ECSS segment. This contrasts with the plentiful arbitrage opportunities that existed in the past in the 2G market when MediaTek had a dominant position and the technology was changing very rapidly. In addition, our planned transition of the ECSS business to a brokerage model was impacted by the intense competition in the market. We will continue to work to align this business segment with the prevailing market environment inChina in an effort to build a more stable and profitable model going forward. This will mean a decrease in investment in ECSS in favor of placing more focus on ICM.

"As we look ahead to 2012, we remain cautiously optimistic about our prospects to regain our growth momentum based on the continuing demand for our ICM products. We are pleased with the progress we have made in transitioning SinoHub into a mobile device communications company, and we believe the significant investments we have made in support of this effort have helped us to build a more sustainable and growth-oriented platform.

"For the full year 2011, our business mix was 46% ICM and 54% ECSS as compared to 31% ICM and 69% ECSS in 2010, which is in line with our strategy to develop the ICM segment into our primary growth driver. We expect ICM to provide a significant majority of our revenue in 2012. We continue to see significant growth opportunities in our core markets in developing markets in Asia, and we are working towards creating new revenue streams with our planned Brazil joint venture business. While we continue to face a challenging operating environment in the near term, we believe our competitive advantages and the underlying growth in demand for private label mobile communication devices on a worldwide basis present us with an attractive opportunity to deliver increasing shareholder returns in the coming years."

BUSINESS OUTLOOK

SinoHub is focused on expanding our ICM business segment by gaining new customers in Southeast Asiawhere we started and by entering new markets (primarily North and South America). We have formed a joint venture company, CiaoHub, in Brazil and, subject to receipt of sufficient financing by CiaoHub, CiaoHub will be building a factory there to produce mobile phones and tablets, which we expect will be open this year. In the meantime, we have already commenced sales efforts in Brazil of mobile communication devices made inChina working with our joint venture partner, Ciao Telecom.

We are is still working toward fielding our own "house brand" of mobile phones and tablets in China which we intend to sell on an opportunistic basis without any significant investment of capital in our brand unless and until we gain meaningful customer traction.

Joint Venture

Tue, 14 Feb 2012 05:00:00 GMT

SHENZHEN, China, February 14, 2012 /PRNewswire-Asia/ -- SinoHub, Inc. ("SinoHub" or the "Company") (NYSE Amex: SIHI), an electronics company whose main growth driver is manufacturing and distributing custom, private-label mobile phones, announced today that it has entered into a Joint Venture Agreement (the "Agreement") with Ciao Telecom, Inc. ("Ciao Telecom"), a global provider of telecommunications products and services with headquarters in the U.S., to manufacture and market mobile communications devices in Brazil. Brazil is currently one of the largest, fastest growing mobile communication device markets in the world, with 276 million active mobile phones expected by year end 2012, representing an annual growth rate of 14%. Through this joint venture, SinoHub and Ciao Telecom will seek to capitalize on these growth trends by manufacturing and marketing high quality mobile phones and tablets.

Pursuant to the Agreement, the joint venture will organize a Brazilian corporation to be named CiaoHub, S.A. ("CiaoHub"), which will conduct operations in Brazil. SinoHub and Ciao Telecom will each own 47% of the new company, with the remaining 6% to be equally divided among the six directors of CiaoHub. CiaoHub will develop plans to construct a 9,000 square meter factory in Vila Velha, Espirito Santo, Brazil for the production of mobile communication devices including mobile phones, smart phones, tablets and mobile device components. The factory is expected to be modeled on SinoHub's manufacturing facility located in Shenzhen, PR China, and will be managed by SinoHub. Construction of the factory is expected to be completed by October 2012, assuming the timely completion of site acquisition and initial funding for the factory and operations. SinoHub will be responsible for the production of CiaoHub's products, and Ciao Telecom will be responsible for the distribution of the mobile communications devices CiaoHub manufactures.

CiaoHub will seek to raise capital to build the initial factory, purchase equipment, hire and train the required staff, purchase initial inventory and market its products. Current plans call for total capital of approximately US$15 million. Discussions with various debt capital sources are underway although funding commitments have not yet been secured. Assuming completion of a factory on the scale currently envisioned, in its startup year of 2013, CiaoHub expects to manufacture and sell approximately 1.3 million mobile phones and tablets in Brazil and to end 2013 with approximately 380 employees.

Commenting on the announcement, Mr. Harry Cochran, Chairman and Chief Executive Officer of SinoHub said, "I am excited to announce this joint venture agreement, which marks an important step toward implementation of SinoHub's strategy to make SinoHub into a multinational company. Since the launch of our integrated contract manufacturing (ICM) business segment in 2010, we have gained a wealth of experience in the design and production of a wide range of mobile communication devices. We believe our experience, our innovative joint-design model and our proven ability to deliver high quality devices in flexible order quantities and with limited lead times positions us to succeed in the rapidly expanding Brazilian and international markets. We are pleased to be joined in this venture by Ciao Telecom, a multinational telecommunication services provider with operations in the United States, Brazil, Europe and the Middle East. Ciao Telecom has especially deep knowledge of the Brazilian market and close connections with many organizations in Brazil."

Comments & Business Outlook

Mon, 14 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

Total net sales declined year-over-year to US$52.0 million in the third quarter of 2011 compared to US$55.8 million in the third quarter of 2010.
Net income per basic and diluted share were both US$0.08, down from US$0.21 per basic and diluted share, in the third quarter of 2010.

Commenting on the results, SinoHub's CEO, Mr. Harry Cochran said, "Our results for the third quarter were largely in line with our expectations, as we continued to be impacted by the decline in ICM revenue following the cut back in orders from a major customer in the second quarter. While we have not yet replaced all of the revenue lost from this key customer, our results have stabilized thanks to our progress on the business development front. In fact, we have successfully broadened our base of smaller ICM customers placing higher margin orders, which led to an improvement in our ICM gross profit margin from the low in the previous quarter. We have also made significant inroads with a number of large developing market mobile phone operators. For example, Philippine Long Distance Telephone Company (PLDT), owners of Smart Communications, Inc, the leading wireless services provider in the Philippines, recently added SinoHub to their List of Accredited Suppliers for Mobile Phones (Private label) for a three year period. This marks a significant step in the sales process with one of the largest mobile phone operators in Southeast Asia, and while we have not yet secured any orders, we are working hard to move this relationship to the order phase.

"The process to shift the electronic component sales part of our ECSS segment to a brokerage model is ongoing, and we expect to make further progress here in the fourth quarter of 2011. This transition is necessary as we continue to focus our resources on developing our ICM business segment.

"Looking ahead, we remain committed to our long-term strategy to deepen penetration of the mobile device market in developing nations and in other international markets, including North and South America. We believe that our joint design process and our track record of delivering high quality phones with minimal lead times and flexible order quantities continue to provide us with clear competitive advantages. While we may continue to face near-term pressure in the short term, we remain confident that our rate of growth in the ICM business segment will rebound in the year ahead."

Full-year 2011 Revenue Guidance

The Company reiterates its sales outlook of approximately 2.5 million mobile phones in 2011, and its full-year 2011 revenue guidance of approximately $195 million. The forecasts reflect the Company's current and preliminary view, which is subject to change.

Analyst Reports

Tue, 16 Aug 2011 04:00:00 GMT

Rodman and Rensahw on SIHI 8/16/2011

SIHI: 2Q11 Earnings Update; Lowering Rating to Market Perform

Lowering Rating To Market Perform: We are lowering our rating on SIHI to Market Perform from Market Outperform. Our lowered rating is driven by 1) a significant miss in 2Q11 results relative to our expectations 2) substantial revision in revenue guidance and 3) limited progress in branded phones and tablet initiatives.

2Q11 Missed: SIHI reported 2Q11 revenue and net income of $40.9 MM and $1.04 MM, with diluted EPS of $0.02, significantly lower than our expectations of $50.2 MM, $4.4 MM, and $0.26, respectively. Total revenue declined by 6.7% Y-o-Y from $43.9 MM in 2Q10 but up 7.8% sequentially from $38.0 MM in 1Q11. Gross margin dropped to 10.8% from 17.3% in 2Q10 due to a more aggressive pricing reduction in SIHI’s ICM segment in order to win new customers to mitigate the loss. Net income declined by 64.1% Y-o-Y to $1.04 MM, implying a net margin of 2.5% for the quarter.

Unexpected Pullback from the Largest ICM Customer: By business segments, ECSS and ICM each contributed $31.7 MM and $9.2 MM in revenue, representing 3.6% and (30.8%) y-o-y change. The sharp drop in ICM segment was mainly driven by SIHI’s largest ICM customer unexpectedly pulling back its orders due to its inventory issues with some other suppliers. Management expects this situation may turnaround again in 4Q. Additionally in ECSS segment, SIHI is switching its business model from a ‘purchase and sales model’ to a brokerage model, in which the company only books the commission as its revenue, compared to book the entire component sales value as revenue and the mark-up as gross profit. This business model shift is expected to result in lower revenue amount and higher gross margin.

Lowering FY11 Guidance: Given the uncertainty in its ICM business and change in revenue recognition in the ECSS segment (due to the business model shift), the company lowered its FY11 revenue guidance significantly to $195 MM from previously issued guidance of $255 MM for FY11. Management expects SIHI to ship 2.5 MM phones in FY11, compared to 3 MM of projections announced before.

Revising Estimates: We are lowering our estimates for 3Q11 revenue, net income, and diluted EPS to $54.7 MM, $2.19 MM, and $0.06, respectively. For full year FY11, we are expecting the company to generate $192.3 MM, $9.8 MM, and $0.28. We are projecting $61 MM in revenue from ICM and $131.3 MM from ECSS. For FY12, our estimates are $161.47 MM for the top-line, $14.43 MM for bottom-line, and $0.38.

Valuation: At current levels SIHI is trading at a P/E multiple of 2.4x and 2.0x to our new FY11 and FY12 earnings estimate. The unexpected revenue shortfall seen in 2Q11 has come at a time when the stock was already under pressure.

Risks: (1) Market Competition (2) Customer Concentration (3) Risks Associated With Accounts Receivable (4) No Long-Term Contract (5) Labor Cost Headwind

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member SIPC.
Member FINRA.

Comments & Business Outlook

Mon, 15 Aug 2011 04:00:00 GMT

SECON QUARTER 2011 FINANCIAL HIGHLIGHTS

Total net sales declined year-over-year to US$40.9 million in the second quarter of 2011 versus US$43.9 million in the second quarter of 2010.

Gross profit was US$4.4 million compared to US$7.6 million in the same quarter in 2010. Gross margin was 10.8% compared to 17.3% in the second quarter of 2010.

Cash used in operations was US$12.3 million, compared with US$2.0 million in the second quarter of 2010.

Net income was US$1.0 million, down from US$3.4 million in the second quarter of 2010.

Net income per basic and diluted shares were both US$0.03, down from US$0.12 per basic and diluted share, in the second quarter of 2010.

"Despite the temporary setback in the second quarter, we remain committed to executing our strategy to deepen our penetration in the white box mobile phone market. As part of that strategy, we have decided to shift the electronic component procurement (ECP) portion of our ECSS segment to a brokerage model from our current model where we take ownership of components. While this will lead to a decrease in ECSS revenue because only commissions on components brokered by SinoHub will be recorded as revenue instead of the full price of the components, the revenue we do generate will carry a higher gross margin. Additionally, the brokerage model will allow for a more efficient use of cash and lower capital requirements, while increasing resources to focus on development of the ICM segment and establishment of the Company's recently announced Topolo™ line of branded mobile phones. We believe that this approach will allow us to generate more sustainable long-term growth and ultimately deliver increasing shareholder value."

Full-year 2011 Revenue Guidance

As announced, the Company experienced a significant reduction in revenue in the second quarter due to the fact that its largest ICM segment customer experienced inventory issues with another supplier which caused the customer not to purchase products from the Company during the second quarter. In addition, the Company expects to generate lower ECSS segment revenues moving forward as a result of its strategic decision to shift the electronic component procurement (ECP) portion of its ECSS segment to a brokerage model. Finally, although the Company believes its ICM business model is now proven, it has not been able to expand its customer base as quickly as planned. As a result of the foregoing, the Company now expects to sell approximately 2.5 million mobile phones in 2011, down from its previous estimate of 3 million, and it expects full-year 2011 revenue of approximately $195 million, unchanged as compared to the full-year 2010. This compares to the Company's previously issued guidance of $255 million for the full-year 2011.

BUSINESS OUTLOOK

SinoHub has begun a strategic initiative to develop its own mobile phone brand in China, the world's largest mobile phone market. As announced in June 2011, the Company has received an application acceptance notice from the Trademark Office of the State Administration for Industry and Commerce of the PRC for the use of the Topolo™ brand name and logo in China, which SinoHub has selected as the brand name for its self-branded line of mobile phones to be sold in the China. The Company is currently in the process of securing a sales license to sell Topolo™ branded mobile phones in China, and expects to begin initial marketing efforts upon approval of its application for a sales license. While the branded mobile phone market presents strong long-term growth opportunities, the Company is proceeding with this initiative in a prudent and deliberate manner, and does not expect a significant contribution from this business opportunity in the current fiscal year.

Analyst Reports

Tue, 17 May 2011 04:00:00 GMT

Rodman and Renshaw on SIHI 5/16/2011

SIHI: Components Shortage Weighs On 1Q11; Revising Price Target To $5.50

1Q11: SIHI reported 1Q11 revenue and net income of $38.0 MM and $3.54 MM, with diluted EPS of $0.12, compared to our expectations of $47.6 MM, $4.0 MM, and $0.10, respectively. Total revenue declined by 1.6% Y-o-Y from $38.6 MM in 1Q10 and 35.1% sequentially from $58.5 MM in 4Q10. The y-o-y decrease of revenue was primarily due to a 33.2% decline in ECSS revenue caused by electronic components shortage from the Japan tragedy. In comparison ICM segment posted stronger sales growth of 157.5% from a year ago. ICM and ECSS each accounted for 43.3% and 56.7% of total sales.

Higher Margin; But Uncertainty Remains: In spite of lower top-line numbers, the gross margin for the quarter was up by 180 bps to 20.2%, partially due to a higher portion of sales contributed by ICM, which carries richer margin relative to ECSS. However, we believe the current inflationary environment in China may put pressure on the company’s gross margin going into the second half due to some signs of labor cost and raw material cost issues.

Branded Phones: Management stated that the company is currently working on introducing branded phone but it is too early to make concrete conclusions. We haven’t factored in any branded phone sales for this year, but we believe in the mid/long-term, this could be an important catalyst for the stock.

Outlook: Management acknowledged that 1Q is historically slow due to the holiday season and the company has seen some effects of Japan’s earthquake, which has caused the business to be slightly behind what was originally expected. However they stated that last year 1Q was also slightly weaker but subsequent quarters came in much stronger than expectations.

Our Estimates: We remain optimistic on SIHI’s business model and growth in their ICM segment. However, we are being slightly conservative with our projections going forward driven primarily by the dropping ECSS business. We are expecting gross margins to remain steady as contribution from ICM increases. For 2Q11, we are now projecting $50.2 MM for top-line, $4.4 MM for bottom-line, and $0.12 per diluted share. This compares to our previous estimates of $57.4 MM, $5.7 MM, and $0.15. For full year FY11, our projections are $217.3 MM, $20.2 MM, and $0.56 per diluted share, respectively.

Revising Price Target To $5.50: At current levels SIHI is trading at a P/E multiple of 2.5x to our new FY11 earnings estimate. This is significantly below the peer group. We are now revising our price target on SIHI to $5.50 from $7.00 driven by lowered projections for 2011. Our new price target of $5.50 for SIHI translates into P/E multiple of 10x to our earnings estimates for FY11, still implying a discount compared to a 22.8x multiple for its peer group listed in China, and 18x for the US listed comparables. We believe these are very reasonable multiples for an emerging company that is growing its market position, introducing new products and improving its margins. We maintain our Market Outperform rating.

Notice Regarding Privacy and Confidentiality:

Rodman & Renshaw, LLC reserves the right to monitor and review the content of all e-mail communications sent and/or received by its employees.

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Comments & Business Outlook

Mon, 16 May 2011 04:00:00 GMT

FIRST QUARTER 2011 FINANCIAL HIGHLIGHTS

Total net sales declined slightly year-over-year to US$38.0 million in the first quarter of 2011 versus US$38.6 million in the first quarter of 2010.
Gross profit was US$7.7 million compared to US$7.1 million in the same quarter in 2010. Gross margin was 20.3% compared to 18.4% in the first quarter of 2010.
Cash used in operations was US$4.4 million, compared with US$38,000 in the first quarter of 2010.
Net income was US$3.54 million, representing a slight increase from US$3.45 million in the first quarter of 2010.
Net income per basic and diluted shares were both US$0.12, down from US$0.13 per basic share and unchanged from US$0.12 per diluted share, in the first quarter of 2010.

BUSINESS HIGHLIGHTS:

Commenting on the results, SinoHub's CEO, Mr. Harry Cochran said, "We are pleased with the continued growth of our ICM business and improving gross margins. As the Company evolves, it is important to maintain focus on the evolution of the mobile device market and on our ability to deliver on orders for new products and in new geographies. As such, we continued to strategically shift our focus to the long-term development of the ICM business. Our top-line performance was impacted by a decrease in sales from our ECSS business segment related to our strategic shift towards a greater ICM focus, and a challenging year-over-year comparable as the first quarter of 2010 was uncharacteristically strong. The startup year for our factory (April 2010 – April 2011) went well, but we still recorded losses for that subsidiary, resulting in increased income tax expense compared to the first quarter of 2010. This impact is a function of the investments made in support of our new growth initiative, and a normal part of starting up a manufacturing operation. More importantly, the strong growth of our ICM business confirms the value of our business model to deliver custom designed mobile phones to distributors and operators that give them a competitive advantage in their local markets using our joint design process. In 2011, to further capitalize on growth opportunities from our ICM segment, we plan to begin production of our own brand of mobile phones for sale in China."

BUSINESS OUTLOOK

SinoHub has begun a strategic initiative to develop its own mobile phone brand in China, the world's largest mobile phone market. There are several examples of companies, the most notable being Tianyu in Beijing, that have executed this strategy successfully. The Company will continue to make and sell private label, custom design mobile phones for distributors and operators elsewhere. We believe the strategy to create our own brand in China, where a marketable brand name is necessary for success, combined with our strategy of using our joint design process to create mobile devices that give our customers competitive advantage in their local markets, will expand our market opportunity, help drive margin improvement and create a more defensible position for our Company.

Liquidity Requirements

Mon, 16 May 2011 04:00:00 GMT

In light of the strong growth opportunities in SinoHub's ICM business segment and its strengthened working capital position as a result of its recently reported $11 million equity raise and existing bank facilities, SinoHub remains confident in the Company's fundamentals, strategy, and prospects. At March 31, 2011, the Company’s working capital was $64.3 million, increased from $52.1 million at December 31, 2010. The Company does not expect it will require further equity financing for the foreseeable future. As of March 31, 2011, the Company had approximately $5 million available to borrow under its credit facilities.

Comments & Business Outlook

Fri, 08 Apr 2011 04:00:00 GMT

SHENZHEN, China, April 8, 2011 /PRNewswire-Asia/ -- SinoHub, Inc. (NYSE Amex: SIHI), an electronics company whose major growth driver is manufacturing and distributing custom, private-label mobile phones, today announced that it has added three substantial new mobile phone design houses as supply chain management ("SCM") customers, namely, Tianlong Shenzhen, Gaophone Shanghai and Henzong Hong Kong. These new customers are expected to generate additional profits for the electronic sales and services ("ECSS") business segment. Transactions with these new customers will strengthen the Company's robust database of information available to support electronic component purchasing in its ECSS and integrated contract manufacturing ("ICM") business segments. Furthermore, SinoHub will have the opportunity to seek to engage these new SCM customers as suppliers of new reference designs for mobile phones in the ICM segment. These new clients are major Chinese design houses, similar to SinoHub's largest SCM client, Huaqin, which is now also an ICM supplier.

In light of the strong growth opportunities in SinoHub's ICM business segment and its strengthened working capital position as a result of its recently reported $11 million equity raise and existing bank facilities, SinoHub remains confident in the firm's fundamentals, strategy, and prospects. The Company has thus far not seen any significant impact on its business as a result of the recent earthquake in Japan and, as such, reaffirms its 2011 full year revenue guidance of 30% growth to $255 million as well as its target of producing and selling 3 million mobile phones for 2011, representing year-over-year growth of 160% in terms of handsets sold. SinoHub does not expect it will require further equity financing for the foreseeable future.

Analyst Reports

Wed, 06 Apr 2011 04:00:00 GMT

Rodman and Renshaw on SIHI 4/06/2011

SIHI: Fundamental Story Remains Unchanged; Maintain Market Outperform

Call With Management: We spoke with SIHI’s management to get an update on the company after a non news driven pullback in the stock yesterday. We don’t believe there has been any new developments in the company’s operations to drive the weakness in the stock.

Key Takeaways: 1) Management is emphasizing on design house customers in the SCM business ( 4% on revenues) to help drive volume, increase component sales and get access to reference designs 2) tablet orders continue to be pursued 3) use of proceeds from recent raise to go towards supporting growth in ICM business, maintain inventory and allow procurement flexibility 4) management confident about auditing and accounting controls 5) 1Q11 has tracked in line with historical seasonality seen in first quarter

Maintain Market Outperform: At current levels SIHI is trading at a P/E multiple of 2.3x to our FY11 earnings estimate. This is significantly below the peer group. We are comfortable maintaining the $7.00 price target for SIHI, which translates into P/E multiple of 10.5x to our earnings estimates for FY11, still implying a discount compared to a 22.4x multiple for its peer group listed in China, and 15.6x for the US listed comparables. We believe these are very reasonable multiples for an emerging company that is growing its market position, introducing new products and improving its margins.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Analyst Reports

Fri, 01 Apr 2011 04:00:00 GMT

trong 4Q10 Beat: SIHI reported 4Q10 revenue and net income of $58.5 MM and $7.2 MM, with diluted EPS of $0.25, beating our expectations of $54.3 MM, $4.8 MM, and $0.17, respectively. Total revenue grew by 36.7% Y-o-Y from $42.8 MM in 4Q09 and 4.9% sequentially from $55.8 MM in 3Q10.

Rodman on SIHI:

Full Year Results: On a full year basis, the company generated $196.7 MM in revenue, $19.1 MM in earnings, and $0.67 in diluted EPS, compared to our estimates of $192.5 MM, $16.7 MM, and $0.58, respectively.

Margin Expansion Continues: 4Q10 gross margin reached 22.2%, improving from 15.0% in 4Q09 and 18.3% in 3Q10. Management attributed the overall margin expansion to continued strength in demand for Sinohub’s handsets with more higher-margin phones shipped during the quarter. As the revenue contribution from ICM increases, management expects margin to continue to improve throughout FY11.

Tablets in Place: During 4Q10, the company started producing its first batch of low-end tablet products. Management disclosed that these new products are normally made at a cost of $70 and sold at a minimum of $90, yielding 20% plus in gross margin. Tablet products are expected to generate meaningful revenue in FY11 and should be viewed as a potential upside driver on both top-line and bottom-line.

FY11 Guidance & Estimates: Management is guiding for revenue of $255 MM for FY11, representing a 30% y-o-y growth from FY10. We are revising our estimates accordingly. For 1Q11 we expect the company to generate $47.6 MM in revenue, $4.0 MM in earnings, and $0.10 in diluted EPS. For the full year, we are projecting $255.3 MM, $25.3 MM, and $0.67, respectively. Our margin estimates may prove conservative if ICM momentum in relation to smart phones continues.

$11 MM Capital Raise: On March 21, 2011, the company completed a registered direct offering by issuing 4.8 MM shares of common stock at $2.30 per share and warrants to purchase up to 1.4 MM shares at $3.00. Total gross proceeds were $11 MM. The company expects to use the proceeds to support its working capital and cash flow. We have adjusted our financial projections based on the increased share count after the transaction.

Valuation: At current levels SIHI is trading at a P/E multiple of 2.8x to our new FY11 earnings estimate. This is significantly below the peer group. We are comfortable maintaining the $7.00 price target for SIHI, which translates into P/E multiple of 10.5x to our earnings estimates for FY11, still implying a discount compared to a 22.1x multiple for its peer group listed in China, and 18x for the US listed comparables. We believe these are very reasonable multiples for an emerging company that is growing its market position, introducing new products and improving its margins.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Investor Presentations

Thu, 24 Mar 2011 04:00:00 GMT

On March 23rd, 2011, the Company issued an investor presentation. View it here.

Deal Flow

Tue, 22 Mar 2011 04:00:00 GMT

SHENZHEN, March 22, 2011 /PRNewswire-Asia/ -- SinoHub, Inc. today announced that it completed its previously announced registered direct offering of 4,791,097 shares of common stock and warrants to purchase up to 1,437,329 shares of common stock with a select number of institutional investors. The common stock was sold at a negotiated purchase price of $2.30 per share, and each purchaser received a warrant to purchase 0.3 shares of common stock for each share of common stock that it purchased in the offering. The warrants are non-exercisable for six months and have a term of exercise of thirty months from the date of issuance and an exercise price of $3.00. The Company received gross proceeds from the offering of approximately $11 million, before deducting placement agents' fees and estimated offering expenses. The Company intends to use the net proceeds from the sale of the shares and warrants pursuant to this offering for general corporate purposes and working capital.

Deal Flow

Wed, 16 Mar 2011 04:00:00 GMT

SHENZHEN, China, March 16, 2011 /PRNewswire-Asia-FirstCall/ -- SinoHub, Inc. today announced that it has entered into definitive agreements with a select number of institutional investors to sell 4,791,097 shares of common stock and warrants to purchase up to 1,437,329 shares of common stock in a registered direct offering. The common stock will be sold at a negotiated purchase price of $2.30 per share, and each purchaser will receive a warrant to purchase 0.3 shares of common stock for each share of common stock that it purchases in the offering. The warrants shall be non-exercisable for six months and have a term of exercise of thirty months from the date of issuance and an exercise price of $3.00. The Company expects to receive gross proceeds from the offering of approximately $11 million, before deducting placement agents' fees and estimated offering expenses.

GeoTeam® Note: We had just indicated that SIHI would tap the equity markets in our blog.

SIHI has been one of the bigger surprises this earnings season. Their cell phone product business model seems to be taking hold, fueled by the smart phone craze and new relationships with high profile customers, such as China Unicom and HT Mobile in Indonesia. The Company issued revenue guidance of $255 million vs. street estimates of $244 million, but gave no net income guidance. Applying current margins, this guidance implies 2011 EPS range of $0.87 to $1.09, which is much higher than street estimates of $0.73. Unfortunately, SIHI will likely attempt to tap the capital markets to expand its business, which renders these implied EPS estimates somewhat unreliable.

Liquidity Requirements

Tue, 15 Mar 2011 04:00:00 GMT

SinoHub’s strategic plan is focused on the growth of our ICM business segment. In 2011 the Company will focus on mobile phone sales in Indonesia and India. This will require investment in inventory for ICM orders, and, depending on our growth, additional investment in our manufacturing and assembling facilities. As a result of the working capital investments necessary to support these plans, the Company will continue to require cash and financing resources to meet and exceed its objectives. The Company’s cost of capital from equity sales increased to 8.8% with the private financings we closed in March 2010 due to market conditions and the participation of an investment bank as placement agent. Our cost of capital with China Construction Bank, Industrial Bank, Hangzhou Bank and Bank of Ningbo was approximately 5.4% at December 31, 2010. Some of the working capital the Company intends to raise in the near to medium term is expected to come from Chinese banks, which, to date, have not been affected by the global credit crisis nearly as much as the US and European banks although the credit available through banks in China could be affected by Chinese monetary policies. We will also seek to raise additional capital from multinational banks and in public or private equity offerings.

We believe SinoHub’s new integrated contract manufacturing business can grow rapidly with the expansion of our manufacturing facility and with additional inventory. Additional working capital would enable us to purchase more electronic components from our suppliers, which should lower our costs, and thus enhance our profitability. We believe increased volume would also likely enable the Company to receive payment terms from suppliers (we are currently mainly buying from suppliers on a C.O.D. basis) which would lessen our need for additional financing from third parties. Accordingly, if SinoHub is unsuccessful in raising additional working capital and does not obtain payment terms from suppliers, the Company’s growth may be adversely affected.

We intend to raise additional funds through the sale of additional equity or debt, long-term debt financings, and operating cash flows.

Comments & Business Outlook

Mon, 14 Mar 2011 04:00:00 GMT

Summary Financials

Fourth Quarter 2010 Results (USD) (unaudited)
(three months ended December 31)	Q4 2010	Q4 2009	CHANGE
Sales	$58.5 million	$42.8 million	+37%
Gross Profit	$13.0 million	$6.4 million	+103%
Net Income	$7.2 million	$3.7 million	+95%
Diluted EPS	$0.25	$0.13	+88%

2010 Calendar Year Results (USD) (audited)
(year ended December 31)	2010	2009	CHANGE
Sales	$196.7 million	$128.4 million	+53%
Gross Profit	$37.8 million	$22.4 million	+69%
Net Income	$19.1 million	$12.4 million	+54%
Diluted EPS	$0.67	$0.48	+40%

Full-year 2011 Revenue Guidance

For full fiscal year 2011, SinoHub is providing revenue guidance of $255 million, representing anticipated year-over-year growth of 30% over 2010.

Business Outlook for 2011

In April 2010, SinoHub commenced operations at its new 104,400 sq. ft. manufacturing facility located in the Bao'an district of Shenzhen, China, to launch its new custom design mobile phone business unit. By operating its own manufacturing facility, the Company has been able to manage product quality more efficiently, enable the timely delivery of phones for both initial and rush orders, and generate higher operating margins.

SinoHub produced approximately 1.15 million mobile handsets in 2010. The Company recently expanded its production facility from 4 assembly lines, adding four more in the third quarter of 2010 for a total of 8 lines with annual output capacity of approximately 3.6 million handsets, or 300,000 handsets per month, to support future growth. The Company started with 3 high speed surface mount (SMT) lines and added four in the fourth quarter of 2010, ending the year with 7 high speed lines with production capacity of over 630,000 mobile phone motherboards per month.

During its first year of operations, the ICM business generated $61.2 million of revenues, with gross margins of 18.9%. Management expects ICM margins to benefit as it makes further improvements in operating efficiencies and product mix, including increased smart phone production, while decreasing contract printed circuit board assembly production work in favor of utilizing motherboard production for its products. We also expect that over time, and in product cycles, these benefits may be offset somewhat by competitive pricing pressures.

"During the past year I have led the sales efforts for our ICM business and am convinced that we entered the market at an opportune time," stated President Lei Xia. "With a higher handset replacement rate in developing countries and private label phone manufacturers continuing to gain market share, we believe we are well positioned to participate in the robust growth currently taking place in the emerging markets. Securing our first smart phone orders was a significant milestone and provides us the opportunity to fully leverage the online joint design capabilities we developed for our clients, while producing higher priced, higher margin phones. We secured orders from customers such as China Unicom, which had 166 million subscribers, including 12.8 million 3G subscribers, at the end of 2010, and HT Mobile in Indonesia, which sells between 500,000 and 600,000 phones per month, which we believe validates our business model and puts us on a path to secure much larger orders and drive incremental growth during 2011."

Comments & Business Outlook

Tue, 01 Feb 2011 05:00:00 GMT

SHENZHEN, China, Jan. 31, 2011 /PRNewswire-Asia/ -- SinoHub, Inc. (NYSE Amex: SIHI), a rapidly-growing electronics company in the People's Republic of China, engaged in private label, custom design mobile phone manufacturing and sales (VCM), electronic component sales (ECP) and supply chain management (SCM) services, today announced that it sold approximately 1.15 million mobile phones in 2010, its first full year of operations with this fast growing mobile phone manufacturing and sales business unit. In order to align the name with its business operations, the Company also renamed its mobile phone manufacturing and sales business to "Integrated Contract Manufacturing (ICM)."

Comments & Business Outlook

Mon, 31 Jan 2011 05:00:00 GMT

SHENZHEN, China, Jan. 31, 2011 /PRNewswire-Asia/ -- SinoHub, Inc. today announced that it sold approximately 1.15 million mobile phones in 2010, its first full year of operations with this fast growing mobile phone manufacturing and sales business unit. In order to align the name with its business operations, the Company also renamed its mobile phone manufacturing and sales business to "Integrated Contract Manufacturing (ICM)."

SinoHub is also introducing to customers its new online reference design selection system which enables a reference design to be selected as a starting point for its unique joint design process based on the desired hardware platform, appearance, chipset and software platform. Having a turnkey solution for the entire design process will make it significantly easier and more efficient for customers to work with SinoHub to create handsets with features and functionality targeted at their local markets. The company will be adding about twenty new reference designs each month that will be deemed best-of-breed from products made by its design house suppliers.

SinoHub has built up substantial capacity in its ICM factory in anticipation of increased sales in 2011. From a starting point of four assembly lines in April 2010, the company added four more assembly lines in Q3 2010. Each assembly line is capable of producing 37,500 phones per month on average, giving SinoHub the capacity to manufacture 300,000 phones per month. After installing its first three high-speed surface mount technology (SMT) lines to make motherboards and a medium-speed line that is primarily used for setup and testing in July 2010, SinoHub added four more high-speed SMT lines in the fourth quarter of 2010. Each high-speed SMT line is capable of producing approximately 90,000 motherboards per month, thus giving the company the capacity to produce over 630,000 motherboards per month.

"We are seeing tremendous growth in our mobile phone manufacturing and sales business", said Harry Cochran, CEO of SinoHub. "Our ability to provide strategic support through our online joint design process and our online order tracking is extremely appealing to a wide variety of customers. The new name for this division more precisely portrays the value proposition we offer. With an established customer base that is purchasing more phones, the recent contracts we have announced and a growing pipeline of new customers, we expect growth in our ICM business to accelerate from the second quarter through the end of 2011. We expect to sell approximately 3 million phones in 2011, a 160% increase over last year."

Analyst Reports

Mon, 31 Jan 2011 05:00:00 GMT

Rodman and Renshaw on SIHI 01/31/2011

SIHI: VCM Segment Renamed; Handset Shipment to Reach 3 MM in 2011

Segment Name Change: Sinohub changed its VCM (Virtual Contract Manufacturing) segment’s name to ICM (Integrated Contract Manufacturing), which better reflects its unique business model that includes integrated electronic components sourcing, supply chain management, and design house relationships. The company also launched a new online design selection system which leverages its relationships with various customers in the mobile phone value chain and provides its distributors with customized designs specifically targeted to their local buyers.

Handset Shipment to Hit 3 MM in 2011: The company expects to sell approximately 3 MM phones in 2011, a 160% y-o-y growth from 2010, helped by a strong order pipeline. The company expanded capacity in 2H10, and is no capable of producing up to 300,000 phones and 630,000 motherboards each month. This is largely in line with our projections and we maintain our financial forecasts of $259.2 MM in revenue, $24.3 MM in net income, and $0.84 in diluted EPS.

Valuation: At current levels SIHI is trading at P/E multiples of 4.8x and 3.3x to our FY10 and FY11 earnings estimates. These multiples are below the peer group. We are comfortable maintaining our $7.00 price target for SIHI, which translates into P/E multiples of 12.0x and 8.3x to our earnings estimates for FY10 and FY11, still implying a discount compared to 28x and 23x multiples for its peer group listed in China, and 18.2x and 15.1x for the US listed comparables. We believe these are very reasonable multiples for an emerging company that has substantial growth opportunities ahead, a strong market position and a healthy balance sheet.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Deal Flow

Mon, 10 Jan 2011 05:00:00 GMT

From time to time, we may offer up to $30,000,000 of any combination of the securities described in this prospectus, either individually or in units. We may also offer common stock upon conversion of preferred stock, or common stock or preferred stock upon the exercise of warrants or stock purchase contracts. Such securities may be offered and sold by us in one or more offerings with a total aggregate principal amount or initial purchase price not to exceed $30,000,000.

Analyst Reports

Fri, 07 Jan 2011 05:00:00 GMT

Rodman & Renshaw on SIHI 01/07/2011

SIHI: China Unicom 3G Order Received

Order from China Unicom: Sinohub announced its first domestic 3G handset order from China Unicom (762-HKG, Not Rated) for 20,000 to be delivered in 1Q11. SIHI will supply one dual-mode (WCDMA and GSM) handset model for China Unicom owned retail branches in China, and these phones will be labeled under “China Unicom” brand. This initial order will be delivered with a license purchased from a 3^rd party, while management is in the process of obtaining an official license from regulators for domestic sales, hopefully by the end of 2011.

Key Takeaways: We are very encouraged by this news. This 3G order should enable the company to be better positioned to win some share in China’s 3G market. Although the volume of 20,000 units is not significant enough to have a material impact on its margin and bottom-line, we do believe this is a trial for China Unicom before it extends a bigger order. In our opinion, the sluggish uptake of 3G subscriptions in China during 2010 will be addressed by the carriers though introduction of lower priced white-label 3G handsets. Overall, domestic 3G handset producers should be well positioned for 2011.

Valuation: At current levels SIHI is trading at P/E multiples of 3.9x and 2.7x to our FY10 and FY11 earnings estimates. These multiples are below the peer group. We are comfortable maintaining our $7.00 price target for SIHI, which translates into P/E multiples of 12.0x and 8.3x to our earnings estimates for FY10 and FY11, still implying a discount compared to 29.4x and 25.1x multiples for its peer group listed in China, and 19.0x and 15.8x for the US listed comparables. We believe these are very reasonable multiples for an emerging company that has substantial growth opportunities ahead, a strong market position and a healthy balance sheet.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Deal Flow

Mon, 03 Jan 2011 05:00:00 GMT

On December 28, 2010, SinoHub Shenzhen entered into a new $7 million credit line with the Shenzhen Branch of Ningbo Bank, which carries forward the $3.1 million balance under and terminates the Original Credit Line.

Analyst Reports

Fri, 19 Nov 2010 05:00:00 GMT

Rodman & Renshaw on SIHI

Overview: SIHI reported 3Q10 revenue and net income of $55.8 MM and $5.5 MM, with diluted EPS of $0.19, beating our expectations of $52.3 MM, $4.7 MM, and $0.16, respectively. Total revenue grew by 54.1% Y-o-Y from $36.2 MM in 3Q09 and 27.1% sequentially from $43.9 MM in 2Q10. The company generated gross profit of $10.2 MM, representing a gross margin of 18.3%, compared to $6.4 MM or 17.8% in 3Q09 and $7.6 MM or 17.3% in 2Q10. Operating profit reached $7.5 MM or 13.4% in EBIT margin, compared to 13.0% and 9.9% for 3Q09 and 2Q10, respectively. Net income rose by 55.3% Y-o-Y to $5.5 MM, implying a net margin of 9.9% for the quarter. The company ended the quarter with a total of $5.4 MM in cash, $46.3 MM of accounts receivable, $8.7 MM of inventory, and $16.4 MM of bank borrowing.

VCM Business Continues To Drive Top-Line Growth: By business segments, ECP, VCM and SCM business each contributed $35.3 MM, $19.0 MM, and $1.5 MM in revenue, accounting for 63.3%, 34.1%, and 2.6% of total sales for the quarter. VCM business continues to be the major growth driver for SIHI’s top-line growth, given that ECP and SCM only grew by 2.9% and a minus (23.6%) Y-o-Y. VCM segment grew by 43.0% sequentially from $13.3 MM in 2Q10. Total production volume of handsets reached 320,000 units in 3Q10, compared to 250,000 units in 2Q10, aided by the strong order flows from emerging Asian including Indonesia and India. We also expect the company to start shipping smart phones to the local distributors in those markets, which should help improving the gross margin.

Key Takeaways: We remind investors that SIHI is filling an important gap in the electronics and mobile phone supply chain associated with smaller volume orders. There are numerous small players in Asia who do not have the volumes to be able to engage the likes of Foxconn (2038-HKG, Not Rated). SIHI provides strategic one stop shop service that we believe will be valued by smaller players in the market. The company now appears to have sufficiently scaled the learning curve on the VCM side to provide consistent operating results and provide investors with good visibility. We believe headlines surrounding handset sales in China and Asia will continue to support investor interest in the story.

Guidance Raised: Management raised its 2010 revenue guidance to $192 MM from $180 MM, based on the strong momentum in VCM business. Now for 4Q10 we are expecting revenue and net income of $54.3 MM and $4.8 MM, with diluted EPS of $0.17. This implies a full year revenue, net income, and EPS of $192.5 MM, $16.7 MM, and $0.58, respectively. For FY11, our estimates are $230.7 MM, $20.9 MM, and $0.73.

Valuation: At current levels SIHI is trading at P/E multiples of 4.5x and 3.6x to our new FY10 and FY11 earnings estimates. These multiples are below the peer group. We are comfortable maintaining the $7.00 price target for SIHI, which translates into P/E multiples of 12.0x and 9.6x to our earnings estimates for FY10 and FY11.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Liquidity Requirements

Mon, 15 Nov 2010 05:00:00 GMT

The Company’s strategic plans include continued expansion and support of our SCM Platform (consisting of SinoHub SCM, key service centers in Hong Kong, Shenzhen, and Shanghai, and a supply chain management service team providing real time support), growth in our electronic component and mobile device sales businesses, including growth of our VCM business, investment in inventory for both procurement-fulfillment and VCM orders, and investment in the manufacturing facility for our VCM business. As a result of the working capital investments necessary to support these plans, the Company will continue to require cash and financing resources to meet and exceed its objectives. The Company’s cost of capital with China Construction Bank, Industrial Bank, Hangzhou Bank, Jiangsu Bank and the Shenzhen branch of the Ningbo Bank was approximately 3.67% at September 30, 2010. Chinese banks to date have not been affected by the global credit crisis nearly as much as the US and European banks although the credit available through banks in China could be affected by Chinese monetary policies.

Although there can be no assurance, we believe SinoHub’s new VCM business can grow rapidly with the addition of more Surface-mount technology (SMT) lines and assembly lines in our manufacturing facility and with additional inventory. Additional working capital would enable us to purchase more electronic components from our suppliers, which we expect would lower our costs, and thus enhance our profitability. We believe increased volume would also likely better position the Company to negotiate payment terms from suppliers (in lieu of the C.O.D. basis on which we currently pay most of our suppliers) which would further reduce our need for additional financing from third parties. Accordingly, if SinoHub is successful in raising additional working capital, management believes that such capital can be utilized to generate positive revenue growth in the near term.

Comments & Business Outlook

Fri, 12 Nov 2010 05:00:00 GMT

Third Quarter 2010 Results (USD) (unaudited)
	Q3 2010	Q3 2009	CHANGE
Sales	$55.8 million	$36.2 million	+54.1%
Gross Profit	$10.2 million	$6.4 million	+58.1%
Net Income	$5.5 million	$3.5 million	+55.3%
Fully diluted EPS	$0.19	$0.13	+46.2%

"Our strong third quarter sales results were led by record shipments and revenue from our custom design mobile phone contract manufacturing business. We produced approximately 320,000 handsets for the third quarter, up from 250,000 in the second quarter, with sales being strongest in Indonesia and India. With growing adoption of our unique new business model which allows us to provide strategic support for handset distributors, we are optimistic in maintaining our positive momentum in VCM," said Harry Cochran, Chief Executive Officer of SinoHub. "We are also very pleased that ECP experienced growth as business volume increased and, more importantly, the gross margin in ECP improved substantially to 15.6% from 12.2% in the second quarter of 2010."

Full year 2010 Guidance

Based on the strong results through the first nine months of 2010, Management is raising FY 2010 revenue guidance to $192 million from the prior guidance of $180 million, representing anticipated year-over-year growth of approximately 50% over 2009.

Comments & Business Outlook

Thu, 12 Aug 2010 04:00:00 GMT

Total revenues for second quarter 2010 grew 39.9% to $43.9 million from $31.4 millionfor the second quarter of 2009.
Net income for the second quarter of 2010 fell 9.4% to $2.9 million, or $0.10 per fully diluted share, compared to $3.2 million, or $0.13 per fully diluted share, in the second quarter of 2009, based on 28.8 million and 25.2 million weighted average, diluted shares outstanding, respectively.

"We are pleased to report a solid first half of the year, as sales from our new virtual contract manufacturing (VCM) business exceeded our expectations. We produced about 250,000 handsets in the second quarter, up from roughly 200,000 during the first quarter, while our sales pipeline continues to improve. As we bring on additional capacity to support our fast growing VCM business, we expect this segment to contribute meaningfully to top and bottom line growth during the second half of the year. Revenues from our ECP business unit were up 31% year to date and we expect measured growth for the balance of the year as we expand our customer base and overall volumes," said Harry Cochran, Chief Executive Officer of SinoHub. "While margins were impacted by the product mix during the quarter, we expect our relationships with large design houses to boost overall volume and growth rates within our ECP business."

Full-year 2010 Revenue Guidance

For full fiscal year 2010, SinoHub reaffirmed revenue guidance of $180 million, representing anticipated year-over-year growth of 40% over 2009. Guidance includes approximately $50 million in anticipated sales from its virtual contract manufacturing (VCM) business.

Comments & Business Outlook

Tue, 18 May 2010 04:00:00 GMT

We are pleased with our strong financial results for the first quarter of 2010, as sales from our recently launched virtual contract manufacturing (VCM) business exceeded our expectations and contributed to gross margin expansion over fourth quarter 2009, and as we generated continued strong growth in our electronic component purchasing (ECP) business unit," said Harry Cochran, Chief Executive Officer of SinoHub. "While sales declined for our SCM business, this unit remains pivotal to our overall business model as we leverage proprietary information gained through our SCM software platform to add new ECP and VCM customers, and as our world-class SCM solutions benefit electronics manufacturers in the growing China marketplace by substantially decreasing their production cycles and inventory levels while improving their working capital position."

For full fiscal year 2010, SinoHub reaffirmed revenue guidance of $180 million, representing anticipated year-over-year growth of 40% over 2009. 2010 guidance provided assumes a substantial increase in sales from its new virtual contract manufacturing (VCM) business.

Research

Mon, 17 Aug 2009 04:00:00 GMT

On August 13, 2009 the GeoTeam® indicated that it considered placing Sinohub on the GeoSpecial or GeoBargain list. The Company reported strong 2009 second quarter financial results.

Revenues increased 137.9% to $31.4 million.
Earnings per share increased 333.3% to $0.13.

This marks the second quarter of superb growth in sales and comes on the heals of earnings per share increasing nearly 100% in 2008 to $0.41. Fully tax-adjusted trailing earnings per share is approximately $0.45 putting the P/E at 8.64.

Why is the stock selling at such a low P/E with consistent EPS growth?

The GeoTeam® believes that investors may be wary due to the possibility of future dilutive events:

'We believe the SinoHub’s procurement-fulfillment and electronic component sales business can be expanded with additional funds depending, in part, on how quickly we can build out new infrastructure and hire additional staff. This is because the electronics business in China is very large relative to the size of the Company’s business. Additional working capital would enable us to purchase more electronic components from our suppliers, which should lower our costs, and thus enhance our profitability. Increased volume would also likely enable the Company to get more favorable terms from suppliers which would lower our need for additional financing from third parties. Moreover, the addition of warehouse space to support the Company’s growth will require capital investment. Accordingly, if SinoHub is unsuccessful in raising additional working capital, the Company’s growth will be adversely affected.

We intend to raise these funds through the sale of additional equity or debt, long-term debt financings, and operating cash flows.' (Source: 10Q, pg. 23)

The GeoTeam® needs to better understand this issue before making a definitive determination on how to code Sinohub. It initially appears that raising capital will enhance the Company's profitability. However, the earnings per share comparisons will be much tougher in the second half of the year. More details will be provided if warranted.

Liquidity Requirements

Sun, 12 Apr 2009 04:00:00 GMT

We believe that SinoHub’s procurement-fulfillment and electronic component sales business can be expanded with additional funds depending on how quickly we can build out new infrastructure and hire additional staff. This is because the electronics business in China is very large relative to the size of the Company’s business.

Additional working capital would enable us to purchase more electronic components from our suppliers, which should lower our costs, and thus enhance our profitability. Increased volume would also likely enable the Company to get favorable terms from suppliers which would lower our need for additional financing from third parties. Moreover, the addition of warehouse space to support the Company’s growth will require capital investment.

Accordingly, if SinoHub is unsuccessful in raising additional working capital, the Company’s growth will be adversely affected.

Source: SEC Form 10K (For the fiscal year ended December 31, 2008. Page 42)