wow, almost no news out today.... must be the holiday season.
GZGT had news though
Guangzhou Global Telecom Reports Q3 Result
Wednesday November 21, 8:30 am ET
GUANGZHOU, China, Nov. 21 /Xinhua-PRNewswire/ -- Guangzhou Global Telecom Inc. (OTC Bullion Board: GZGT), a mobile phone handset and pre-paid calling card distributor and mobile handset value-added services provider in the PRC, announced that the company reported revenue of $6.4 million in the third quarter of 2007, representing a 1,728% increase compared to the same period of 2006. The revenue during the nine months ended September 30, 2007 was 15 million, representing 116% increase compared to the same period of 2006.
The gross profit increased from $125,473 during the three months ended September 30, 2006 to $403,156 in the same period of 2007. The increase of gross profit is mainly resulted from increase in revenue. Meanwhile, the gross margin dropped from 35% during the three months ended September 30, 2006 to 6% for the same period of 2007. The decrease is mainly due to the reason that China Mobile Guangzhou Branch changed its sales model which left thinner margin for agencies but took certain marketing function itself. In addition, certain rebate for the previous periods of 2006 was received and recorded in the three months ended September 30, 2006. Therefore, the gross margin in 2006 is comparatively high.
Selling, general and administrative expenses were $295,261 during the three month period ended September 30, 2007 as compared to $105,792 for the same period ended in 2006, an increase of $189,469 or 179%. This increase is mainly due to the interruption of two months' operation during the three months ended September 30, 2006.
Operating income recorded $165,792 during the nine months ended September 30, 2007, as compared to $164,603 during the same period of 2006. The slight increase in operating income is mainly due to the increase of revenue, while certain expenses related to expansion into other cities absorbed certain income from normal operations.
Other expenses were $487,556 during the nine months ended September 30, 2007, which mainly included the non-recurring financing cost of $376,000 related to the convertible debt and the continuing interest expenses of $110,607. The financing cost included investment banker fee, lawyer fee, due diligence fee, etc. The interest expenses of $110,607 included interest of convertible debt, amortization of discount on the convertible debt, amortization of the fair value of granting financial instruments.
Net loss recorded $400,982 during the nine months ended September 30, 2007, as compared to gain of $128,367 during the same period of 2006. The decrease of net profit is mainly due to the other expenses relating to the convertible debt.
"The 1,728 percent increase in sales is a symbol of our aggressive development in our business. With the fund we raised in the earlier of August, we were able to expand our business into other provinces to achieve more aggressive targets. As of September 30, 2007, we have successfully expanded our operations in Zhengzhou, Wuhan, Beijing and Macau. We will enhance the operation there and expand into other cities as more as possible," said Li Yankuan, President and CEO of Guangzhou Global Telecom.