Highpower Intl (HPJ) research, news, and more from GeoInvesting

Company description

Mon, 27 Apr 2009 04:00:00 GMT

HPJ was formed via a share exchange transaction on November 2, 2007.

Hong Kong Highpower develops, manufacturers and markets rechargeable Nickel Metal Hydride (Ni-MH) and Lithium-ion (Li-ion) batteries and related products for use in a variety of electronic devices. The majority of Hong Kong Highpower’s products are distributed worldwide to markets in the United States, Europe, China, Hong Kong, Southeast Asia and Taiwan.

Reverse Merger Filing

Comments & Business Outlook

Mon, 14 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

Net sales for the third quarter ended September 30, 2011 totaled $28.1 million, a year-over-year increase of 1% compared with $27.8 million for the third quarter ended September 30, 2010.
Loss from operations for the third quarter of 2011 was $839,000, as compared with income from operations of $1.7 million for the third quarter of 2010.
Net loss for the third quarter of 2011 was $665,000, or ($0.05) per diluted share, based on 13.6 million weighted average shares outstanding. This compares with third quarter 2010 GAAP net income of $1.4 million, or $0.11 per diluted share, based on 13.7 million weighted average shares outstanding.

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

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

Outlook

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

Auditor trail

Fri, 07 Oct 2011 04:00:00 GMT

NEW YORK, NY and SHENZHEN, CHINA--(Marketwire - Oct 6, 2011) - Highpower International, Inc. (NASDAQ: HPJ), a developer, manufacturer and marketer of nickel-metal hydride (Ni-MH) and lithium batteries and related products, today announced that it has engaged Marcum Bernstein & Pinchuk (MarcumBP) as the Company's new independent registered public accounting firm replacing Highpower International's previous independent auditor, Dominic K.F. Chan & Co.

The change in the independent registered public accounting firm is effective as of September 30, 2011. There were no disagreements between Highpower International and Dominic K.F. Chan & Co. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.

"We believe MarcumBP has the strong local resources and auditing expertise required to ensure that our financial reports continue to be prepared with the highest level of accuracy and integrity, and they possess the scale required to accommodate our auditing needs as we continue to mature as a larger public company," said Mr. George Pan, Chairman & CEO of Highpower International. "At Highpower, we are committed to providing our shareholders with the highest level of transparency, financial reporting standards, and corporate governance."

Comments & Business Outlook

Thu, 11 Aug 2011 04:00:00 GMT

Second Quarter 2011 Financial Results

Net sales for the second quarter ended June 30, 2011 totaled $29.7 million, a year-over-year increase of 2.5% compared with $29.0 million for the second quarter ended June 30, 2010, and up sequentially 10% from $27.0 million in the first quarter of 2011. The increase in sales for the second quarter was primarily driven by increased demand for our Li-ion batteries.
Net income for the second quarter of 2011 was $0.1 million, or $0.01 per diluted share, based on 13.8 million weighted average shares outstanding. This compares with second quarter 2010 net income of $1.6 million, or $0.12 per diluted share, based on 13.7 million weighted average shares outstanding. As previously mentioned, the 2011 second quarter's results were negatively impacted mainly by commodity prices and the timing of pricing increases to customers.

Outlook

Based on our current expectations for global demand for the rechargeable battery market in 2011, the outlook for our key raw material input prices and our planned increased investment in sales and marketing and research and development, we are updating our financial guidance for 2011. We expect net sales to be between $120 million and $125 million. We expect net income to be in the range of $2 million to $3 million.

Analyst Reports

Mon, 27 Jun 2011 04:00:00 GMT

Rodman and Renshaw on HPJ 6/27/2011

HPJ: Share Buyback Program Announced

$5.0 MM Stock Repurchase Program: HPJ announced a stock repurchase plan to buyback up to $5.0 MM of common shares from open market. The timing and exact amount will be dependant on market conditions. The repurchase program does not require the Company to acquire a specific number of shares, and the repurchase program may be limited or terminated at any time without prior notice.

Key Takeaways: In the current environment, we view this is as a pro-active effort by management to boost investors’ confidence and repurchase shares at depressed levels. On a YTD basis, HPJ shares has been down 48.0% amid the overall negative sentiment toward US listed Chinese companies, even though both top-line and bottom-line have been growing. We believe this program should provide support to HPJ stock depending on the manner in which it is executed.

Valuation: At current levels HPJ is trading at P/E multiples of 7.9x and 4.5x to our FY11 and FY12 EPS estimates. These multiples compare to industry averages of 12.1x and 9.5x for FY11 and FY12 consensus earnings. Our price target of $4.00 translates into a P/E multiple of 9.9x to our estimates for FY12. We maintain our Market Outperform rating.

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.

Notable Share Transactions

Mon, 27 Jun 2011 04:00:00 GMT

NEW YORK, NY and SHENZHEN, CHINA--(Marketwire - Jun 27, 2011) - Highpower International, Inc.(NASDAQ: HPJ), a developer, manufacturer and marketer of nickel-metal hydride (Ni-MH) and lithium-ion (Li-ion) batteries and related products, today announced that its Board of Directors has authorized the implementation of a share repurchase plan to repurchase up to $5.0 million outstanding shares of the Company's common stock in open market purchases, with block trades being permitted, from time to time in the discretion of the Company's management and as market conditions allow. The timing of purchases and the exact number of shares to be purchased will depend upon market conditions. The repurchase program does not require the Company to acquire a specific number of shares, and the repurchase program may be limited or terminated at any time without prior notice.

The Company intends to effect the share repurchases in compliance with the Rule 10b-18 under the Securities Exchange Act of 1934. Stock repurchases may be made through a wholly-owned subsidiary of the Company. The acquired shares will be retired and cancelled upon repurchase.

The Board of Directors believes that a share repurchase program at this time is in the best interests of the Company and its stockholders, and will not impact the Company's ability to execute its growth plans.

George Pan, Chief Executive Officer of the Company, commented, "The Board's authorization of the share repurchase program reflects our confidence in our company's future and the fundamental strength of our business. We remain committed to maximizing long-term stockholder value and believe that the stock repurchase program is in the best interests of our stockholders and is a prudent use of our cash, especially given our current share price."

Analyst Reports

Fri, 13 May 2011 04:00:00 GMT

Rodman and Renshaw on HPJ 5/13/2011

HPJ: Lowering Price Target On Margin Pressure

1Q11 Results: HPJ reported 1Q11 revenue and net loss of $27.0 MM and $(0.46 MM), with diluted EPS of $(0.03) based on diluted share count of 13.8 MM, compared to our expectations of $24.1 MM, $1.4 MM, and $0.10, respectively.

Lowering PT to $4.00: We are lowering our gross margin expectations for HPJ from 19%-20% levels to 17.00% to account for higher raw material prices. This change results in our EPS expectations for 2011 to drop from $0.44 to $0.23. In line with this we are lowering our price target from $7.00 to $4.00. However we continue to maintain our Market Outperform rating as we believe the longer term outlook remains relatively positive with the company’s move into the lithium ion battery business. We will be looking for the company to follow through on re-negotiating customer contracts / pricing and improve on raw material inventory / purchase management. At current levels HPJ is trading at P/E multiples of 11x and 6.3x to our FY11 and FY12 EPS estimates. These multiples compare to industry averages of 13.1x and 10.1x for FY11 and FY12 consensus earnings. Our new price target of $4.00 translates into a P/E multiple of 9.9x to our estimates for FY12. We justify this by pointing investors to the company’s low PEG ratio of 0.30 at these multiples.

Lithium-ion Momentum Strong: Revenue came in stronger than we expected, with Li-ion battery sales growing by 50.7% y-o-y, much faster than 9.5% for Ni-MH batteries. While HPJ remains a leader in Ni-MH space, with over 10% plus market share, we believe Li-ion should continue to be the major growth driver in the foreseeable future. On a going forward basis, management expects Li-ion battery sales to continue growing at a faster pace compared to Ni-MH.

Rising Commodity Price Continues To Weigh On Margins: Gross margin declined significantly from 21% a year ago to 14.8%, driven by rising nickel price and related rare earth materials. During the first quarter, the LME Nickel spot price had been volatile, rising by 16.6% from $25,110/ton on January 4 to $29,281/ton on February 21, and then declined to $26,075/ton on March 31, 2011. Management stated that it is renegotiating pricing with its major customers, in order to at least partially pass on the higher costs, and it expects to see the gross margin to improve steadily as the negotiation moves forward for the rest of 2011.

Updated Guidance: Management reiterated its full year revenue guidance at the range of $125 MM $135 MM, while lowering the net income guidance to $3 MM $4 MM from previously announced $6 MM $7 MM.

Our Estimates: For 2Q11, we are now projecting revenue and net income of $35.4 MM and $1.14 MM, with diluted EPS of $0.08. For full year FY11, our estimates are $130.5 MM, $3.25 MM, and $0.23 per share, respectively. Additionally we are introducing the FY12 estimates of $150.6 MM for top-line, $5.9 MM for bottom-line, and $0.40 for diluted EPS, implying a 15.6% top-line growth and 82% bottom-line growth.

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.

Comments & Business Outlook

Thu, 12 May 2011 04:00:00 GMT

First Quarter Results:

Net sales for the first quarter ended March 31, 2011 totaled $27.0 million, a year-over-year increase of 33.3% compared with $20.2 million for the first quarter ended March 31, 2010
Net loss for the first quarter of 2011 was $0.5 million, or $(0.03) per diluted share, based on 13.8 million weighted average shares outstanding. This compares with first quarter 2010 net income of $1.6 million, or $0.12 per diluted share, based on 13.6 million weighted average shares outstanding.

GeoTeam® Note: First Quarter 2011 vs. 2010 Adjusted EPS was $0.02 vs. $0.12.

Based on our current expectations for global demand for the rechargeable battery market in 2011, the outlook for our key raw material input prices and our planned increased investment in sales and marketing and research and development, we are updating the following financial guidance for 2011. We are reaffirming that we expect net sales to be between $125 million and $135 million. However, due to volatile commodity prices, we are updating our guidance for net income, which we expect will now range between $3.0 million and $4.0 million for the year ended December 31, 2011.

"During the first quarter, our margins were negatively affected by substantial increases in raw material prices, including nickel and rare earth materials," said Mr. George Pan, Chairman and Chief Executive Officer of Highpower International. "Despite these headwinds, we still experienced strong end market demand and significant growth for both our Ni-MH and Lithium-ion batteries. We grew Li-ion sales by 51% year-over-year and Ni-MH sales by almost 10%."

Corporate Governance

Sat, 30 Apr 2011 04:00:00 GMT

On April 25, 2011, Chao Li resigned as a member of the Board of Directors of Highpower International, Inc., a Delaware corporation (the “Company”) including his positions on the Company’s Audit Committee, Compensation Committee and Nominating Committee, effective April 30, 2011. Mr. Li’s resignation is for personal reasons and is not due to any disagreement with the Company.

Liquidity Requirements

Thu, 14 Apr 2011 04:00:00 GMT

Based upon our present plans, we believe that cash on hand, cash flow from operations and funds available under our bank facilities will be sufficient to fund our capital needs for the next 12 months.

Analyst Reports

Tue, 29 Mar 2011 04:00:00 GMT

Rodman and Renshaw on HPJ 3/28/2011

HPJ: 4Q10 Earnings Update

4Q10 Results: HPJ reported 4Q10 revenue and net income of $27.9 MM and $1.4 MM, with diluted EPS of $0.11 based on diluted share count of 13.7 MM, compared to our expectations of $24.3 MM, $1.5 MM, and $0.11, respectively. Top-line grew by 23.8% Y-o-Y and 0.38% sequentially. Gross profit was $6.3MM or 22.4% in margin, compared to $4.3 MM or 19.3% in margin in 4Q09 and $5.9 MM or 21.2% in margin in 3Q10. HPJ generated $1.7 MM in EBIT for the quarter, implying an EBIT margin of 6.0%, in line with 6.2% in the last quarter but higher than 4.33% in 4Q09. Net income was $1.4 MM, or 5.2% in net margin, an increase of 233 bps 4Q09’s 2.84%. HPJ ended the quarter with $8.5 MM in cash and $10.15 MM in working capital, accounts receivable and inventory stood at $20.9 MM and $13.5 MM, respectively.

Volume Growth Strong: HPJ reported 18% y-o-y growth in total volume for FY10, of which Li-ion battery products grew by 89% and Ni-MH products grew by 18% from FY09. ASPs for Li-ion and Ni-MH were up by 17% and 2% for the year, leading to revenue growth of 49%. New Materials increased from $1.0 MM in FY09 to $12.6 MM in FY10.

Margins: 4Q margin came in strong at 22.4%, higher than 19.3% in 4Q09 and 21.2% in 3Q10. The improved 4Q margin was primarily driven by a faster increase in ASP than COGS. ASP in 4Q10 increased by 15% y-o-y while COGS per unit was up by 9%. Full year gross margin of 20.8% was slightly lower than 21.4% in FY09, due to higher cost incurred in Li-ion battery capacity ramp-up and a greater contribution from the lower-margin New Materials business.

Liquidity: The company ended the year with cash balance of $8.5 MM. Operating cash flow generated in FY10 was $2.8 MM, compared to $3.3 MM in FY09. HPJ currently had bank borrowing of $22.5 MM, with $38.7 MM available as unused credit facility.

FY11 Guidance: HPJ is guiding for revenue and net income of $125 MM $135 MM and $6.0 MM $7.0 MM. The company also expects a higher cost of raw materials and human capital as the company continues to expand its international sales and marketing team.

Revising Estimates: For 1Q11, we are now expecting revenue and net income of $24.1 MM and $1.4 MM, with diluted EPS of $0.10. For full year FY11, our projections are in line with guidance at $127.6 MM, $6.2 MM, and $0.44, respectively. Our gross margin and EBIT margin are projected to be 19.1% and 6.1%.

Valuation: At current levels HPJ is trading at P/E multiples of 7.8x to our FY11EPS estimates. These multiple is well below current industry averages of 8.8x for FY11 consensus earnings. Our $7.00 price target translates into a P/E multiple of 16x to our estimates for 2011. We justify this by pointing investors to the company’s low PEG ratio of 0.30 at these multiples.

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.

Comments & Business Outlook

Mon, 28 Mar 2011 04:00:00 GMT

Fourth Quarter and Year End Results:

Net sales for the fourth quarter of 2010 increased 24% to $27.9 million
Net sales for the year ended December 31, 2010 increased 49% to $104.9 million
Gross profit margin for the fourth quarter of 2010 was 22.4% as compared with 19.3% in the fourth quarter of 2009
Gross profit margin for the year ended December 31, 2010 was 20.8% as compared with 21.4% for the year ended December 31, 2009
Net income for the fourth quarter of 2010 increased 126% to $1.4 million
Net income for the year ended December 31, 2010 increased 36% to $6.0 million
Fully diluted EPS for the fourth quarter increased by 100% to $0.10
Fully diluted EPS for the year increased by 36% to $0.44

"We are proud of the growth in revenues and profits that we achieved in the fourth quarter and the full year of 2010," said Mr. George Pan, Chairman and Chief Executive Officer of Highpower International. "We grew our volumes by 18% in 2010, which was driven by a growing global demand for our products as we gain traction in placing our batteries in many next generation consumer electronics products. In addition, our net income increased by 36% in 2010 despite a challenging raw materials cost environment. Our focus on cost containment efforts and execution proved invaluable in helping us achieve these strong results."

Based on our current expectations for global demand for the rechargeable battery market in 2011, the outlook for our key raw material input prices and our planned increased investment in sales & marketing and research & development, we are providing the following financial guidance for 2011. We expect net sales to be between $125 million and $135 million and net income to be between $6.0 million and $7.0 million for the year ended December 31, 2011.

"While we expect to continue to experience strong revenue growth for 2011, our growth in net income will be impacted by key investments that we are making today to position us for increased profitability in 2012 and beyond. In addition, we expect that our gross margins in 2011 will be impacted by higher raw material costs and higher labor costs, which will be partially offset by product price increases that we are in the process of implementing." said Mr. Henry Sun, Chief Financial

Comments & Business Outlook

Mon, 07 Mar 2011 05:00:00 GMT

For the fourth quarter of 2010, the Company expects

revenue to be in the range of $27.5 to $28.0 million
net income to be in the range of $1.3 to $1.5 million.

At the midpoint of the range, this represents a 23% increase in revenue and a 119% increase in net income as compared to the fourth quarter of 2009.

For the fiscal year ended December 31, 2010, the Company expects

revenue to be in the range of $104.5 to $105.0 million
net income to be in the range of $5.9 to $6.1 million.

At the midpoint of the range, this represents a 49% increase in revenue and a 35% increase in net income as compared to the fiscal year ended December 31, 2009.

"We are proud of the strong results that we achieved in the fourth quarter and fiscal year of 2010," said Mr. George Pan, Chairman and Chief Executive Officer of Highpower International. "We are benefiting from increasing global demand for rechargeable batteries and our success in selling our batteries into an increasing number of next generation consumer electronics products. We remain focused on expanding our sales and marketing efforts worldwide and advancing our position as a leading provider of clean energy solutions for consumer products and alternative energy applications."

CFO Trail

Sat, 08 Jan 2011 05:00:00 GMT

On January 3, 2010, Highpower International, Inc. appointed Henry Sun as its Chief Financial Officer and Corporate Secretary. Mr. Sun replaces Henry Ngan, who resigned on January 3, 2010.

Analyst Reports

Mon, 03 Jan 2011 05:00:00 GMT

Rodman & Renshaw on HPJ 01/03/2011

HPJ: New CFO Appointed

Appointment: HPJ announced that it has appointed Henry Sun to replace Henry Ngan as the company’s new CFO. Before joining HPJ, Henry Sun served as CFO at Zoomlion Concrete Machinery Company (a subsidiary of Zoomlion Heavy Industry Science & Technology Development Co., Ltd, 000157-SHG, Not Rated), where he was in charge of accounting and finance, strategic planning, corporate finance, as well as investor relations. Prior to that, he was the Finance Director at Yasheng Group (YHGG, Not Rated) and was responsible for corporate finance and investor relations. Sun graduated from School of Global Management at Thunderbid.

Key Takeaways: We believe this was a mutually agreed upon separation between Henry Ngan and HPJ driven by contract expiry.

Valuation: At current levels HPJ is trading at P/E multiples of 7.4x and 5.4x to our FY10 and FY11estimates. These multiples are below current industry averages of 11.2x and 10.9x for FY10 and FY11 consensus earnings. Our $7.00 price target translates into a P/E multiple of 11.4x to our estimates for 2011. We justify this by pointing investors to the company’s low PEG ratio of 0.30 at these multiples.

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

Wed, 24 Nov 2010 05:00:00 GMT

Rodman & Renshaw on HPJ

Overview: HPJ reported 3Q10 revenue and net income of $27.8 MM and $1.4 MM, with diluted EPS of $0.10 based on diluted share count of 13.73 MM, compared to our expectations of $24.2 MM, $1.5 MM, and $0.11, respectively. Top-line grew by 31.9% Y-o-Y but declined 4.15% sequentially. Gross profit was $5.9 MM or 21.2% in margin, compared to $5.2 MM or 24.8% in margin in 3Q09 and $5.4 MM or 18.6% in margin in 2Q10. HPJ generated $1.7 MM in EBIT, implying an EBIT margin of 6.2%, lower than 8.8% and 6.6% in 3Q09 and 2Q10. Net income was $1.4 MM, down from $2.4 MM in 3Q09. Diluted EPS was $0.10 based on 13.73 MM of diluted shares, compared to $0.18 in 3Q09 and $0.12 in 2Q10. HPJ ended the quarter with $5.4 MM in cash and $8.7 MM in working capital, accounts receivable and inventory stood at $19.5 MM and $14.8 MM, respectively.

Healthy Top-Line Growth: Revenue for the quarter was $27.8 MM, a Y-o-Y increase of 31.9% from $21.1 MM in 3Q09. This was primarily driven by an improvement in ASP of battery products and the revenue contribution from New Material business, which generated approximately $2.7 MM, or 10% of total sales. Management expects 4Q10 to be an inflection point for its Lithium-ion battery products, which should grow decently into 2011. During 3Q10 HPJ produced a total of 1.2 MM units of Lithium-ion battery products.

Margin Volatility: Gross margin was 21.2% for the quarter, compared to 24.8% in 3Q09 and 18.6% in 2Q10. The volatility was mainly driven by the price movement in raw materials including Nickel and Lithium. For the near-term, management anticipates a similar level of raw material cost to the past few quarters, and expects gross margin to be maintained at the current level.

Growth Drivers For FY11: Going into 2011, the company expects the growth to be driven by (1) increase in shipment volume for Ni-MH products (2) stronger momentum in Lithium-ion products. (3) New Material business; should continue to grow and generating profits, also potentially enable HPJ to secure lower cost / high quality raw materials. HPJ should be able to fulfill additional demand by adding capacity at its existing facility located in Shenzhen. Construction of its facility in Huizhou is expected to be completed in 2011 and begin production in 4Q11.

4Q10 & FY11 Estimates: For 4Q10 we are maintaining our estimates for revenue and net income at $24.2 MM and $1.5 MM, with fully diluted EPS of $0.11. This implies a full year revenue, net income, and EPS of $101.3 MM, $6.1 MM, and $0.44, respectively. For FY11, our estimates are now $116.6 MM, $8.7 MM, and $0.61.

Valuation: At current levels HPJ is trading at P/E multiples of 8.8x and 6.4x to our FY10 and FY11 estimates. These multiples are below current industry averages of 11.2x and 10.3x for FY10 and FY11 consensus earnings. Our $7.00 price target translates into a P/E multiple of 11.4x to our estimates for 2011.

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

Based upon our present plans, we believe that cash on hand, cash flow from operations and funds available under our bank facilities will be sufficient to fund our capital needs for the next 12 months

Comments & Business Outlook

Wed, 10 Nov 2010 05:00:00 GMT

Third Quarter 2010 Financial Results

Net sales for the third quarter ended September 30, 2010 totaled $27.8 million, a year-over-year increase of 32% compared with $21.1 million for the third quarter ended September 30, 2009.

Third quarter 2010 gross profit increased 13% to $5.9 million, compared with $5.2 million for the third quarter 2009. Gross margin was 21.1% for the third quarter 2010, compared with 24.8% for the third quarter 2009.

Net income for the third quarter of 2010 was $1.4 million or $0.11 per diluted share, based on 13.6 million weighted average shares outstanding. This compares with a particularly strong third quarter 2009 net income of $2.4 million, or $0.18 per diluted share, based on 13.6 million weighted average shares outstanding.

"The third quarter proved to be another strong quarter of year-over-year revenue growth," said Mr. George Pan, Chairman and Chief Executive Officer of Highpower International. "We also accomplished an important corporate branding milestone this quarter by changing our name to Highpower International. Our new name helps position us for further worldwide growth in the years ahead. Highpower International better reflects our global initiatives to continue to expand our sales and marketing efforts worldwide and advance our position as a leading, profitable, eco-friendly focused solution provider of green energy."

Mr. Henry Ngan, Chief Financial Officer of Highpower International, added, "We are pleased with the continued revenue strength we saw in the third quarter. We remain optimistic that these revenue trends will continue throughout the end of the year. Despite our net income being down year-over-year in the third quarter, will still anticipate that our overall profitability in FY 2010 will exceed the record profitability levels we saw in 2009, which remains consistent with our commentary from earlier this year."

Comments & Business Outlook

Thu, 12 Aug 2010 04:00:00 GMT

Financial and Business Highlights:

Recorded $28.9 million in net sales for second quarter 2010, a 88% increase year-over-year, and 43% increase sequentially;
Achieved gross profit of $5.4 million for second quarter 2010, compared to $3.1 million in second quarter 2009;
Earned net income of $0.12 per diluted share for second quarter 2010, a 71% increase over the second quarter of 2009;
Debt-to-capital ratio remained healthy consistent with prior quarter;
Formed Springpower International, a research & development unit for advanced high performance battery materials and clean energy materials.

"Our business trends in the second quarter clearly indicate that the overall level of demand for our battery products remains healthy," said Mr. George Pan, Chairman and Chief Executive Officer of Hong Kong Highpower Technology. "Our ability to deliver strong second quarter results in the face of a slow and gradual macro economic recovery signifies that we are taking the right steps and executing well on our strategy to be a leading, profitable, eco-friendly focused, world battery player."

Mr. Henry Ngan, Chief Financial Officer of Hong Kong Highpower Technology, added, "We produced another solid quarter of results. We are now six months through FY 2010, and our sales and profitability are tracking well ahead of 2009 levels. Therefore, we remain optimistic that we can achieve greater levels of sales and profitability in FY 2010 in comparison to last year's full year results."

GeoBargain Notes

Thu, 12 Nov 2009 05:00:00 GMT

Hong Kong Highpower Tech (NYSE AMEX:HPJ), GeoSpecial

As suggested in our “Hidden Clues Yield Opportunities” article on November 2, 2009, HPJ came through and crushed third quarter analyst EPS estimates.

Article excerpt:

Although one of our prime concerns is the estimated decline in revenues, a clue pointing towards opportunity lies in Highpower's September 21, 2009 press release. The Company mentioned that revenues for the first two months of its 2009 third quarter were up 8% to $13.3 million. The GeoTeam® is speculating that HPJ will exceed estimates due to this information.

The following table illustrates these thoughts:

Year Ends December	3rd Quarter 2009	3rd Quarter 2008	Period Change	Analyst Estimate
GAAP Revenue	$21.1million	$20.5 million	2.8%	$18.5
GAAP EPS	$0.18	$0.02	800.0%	$0.09

We are recoding HPJ to a GeoBargain from a GeoSpecial. Please note that we would prefer a higher current ratio, which currently stands at around 1.2 to 1.

See HPJ news release

Research

Mon, 02 Nov 2009 05:00:00 GMT

Hidden Clues Yield Opportunities

The GeoTeam® continually scours press releases and SEC filings to uncover clues on which companies will outperform expectations. Two companies that may fit this bill are Amcon Distributing (NYSE AMEX:DIT) and Hong Kong Highpower Technology (NYSE AMEX:HPJ)

The first company is Amcon Distributing, a leading wholesale distributor of consumer products including beverages, candy, tobacco, groceries, food service, frozen and chilled foods, and health and beauty care products. The Company also operates health and natural product retail stores.

Amcon has posted nine straight quarters of solid quarterly EPS gains, a large reason why we have owned the Company's stock for a some time. Annual EPS has grown from $1.33 in 2006 to $6.56 in 2008. For the 2009 nine month period, EPS has grown 67% to $7.47. Revenue gains have not been as strong, which may be part of the reason why the stock sells at a modest trailing P/E of 6.6.

Can this EPS trend continue? We haven’t had success scheduling an interview with management so we need to search for clues that will guide us.

1. Insider buying- Management has been buying stock rather routinely over the past year, even as the stock attains new 52-week highs. We view this as a strong signal from management about near term growth prospects.

2. Today, the company announced that it will acquire a wholesale distribution firm boasting $60 million in revenues and over 300 customers. We don’t have any details on the growth trend or margins of the firm to be acquired. Using Amcon's current margins, $60 million in revenues would equate to additional $0.74 EPS. Also, keep in mind that the Company can now push its own products through this new customer base.

3. On October 29, 2009, Amcon announced that it increased its quarterly dividend by 80%.

4. Amcon recently paid down $8.6 million in debt.

5. The third and fourth quarters are Amcon's strongest periods.

6. The Company has just seven retail operations, leaving room for expansion.

Of course, these are only clues and we need to be aware of certain risks:

At $60.00 DIT has performed extraordinarily with a 52-week low of $13.43.
DIT has a tiny float of about 400 thousand shares.
Not being able to interview the Company also adds an element of risk.
Amcon is a $1 billion company which could make top line growth challenging.
The wholesale distribution business is in a mature, highly competitive industry
While Amcon does have some recession resistant product categories such as food and tobacco, its customers are highly susceptible to a weak economy.
Although Amcon has reduced its long-term debt, it still stands at $5.2 million on the books, with a debt to equity ratio over 20% (higher than we prefer). This combined with razor thin margins will likely place a cap on P/E expansion.

The Second company Hong Kong Highpower Technology Inc (HPJ), a manufacturer of rechargeable Nickel Metal Hydride (Ni-MH) and Lithium-ion (Li-ion) batteries.

The GeoTeam® is pondering the Company's ability to meet or exceed analyst 2009 third quarter estimates.

	3rd Quarter 2009 Estimate	3rd Quarter 2008 Reported	Period Change
Revenue	$18.56 million	$20.47million	-9.3%
EPS	$0.09	$0.02	350.0%

The stock has recently fallen hard along with most of U.S listed China stocks. Astute investors may see this as buying opportunity, especially as analysts expect Highpower's 2010 EPS to grow over 40% to $0.40 equating to a PEG ratio of 0.49.

Note: We have not interviewed HPJ management.

Special Situations

Mon, 10 Aug 2009 04:00:00 GMT

Hong Kong Highpower (NYSE Amex:HPJ) reported strong 2009 second quarter bottom line results this morning. At first glance this appears to be the company's first positive growth quarter in over a year. On the flip side the sales growth is still negative. The GeoTeam® is taking a closer look at Hong Kong Highpower for possible inclusion as a GeoSpecial, pending further due diligence on three issues:

Has the company reached an inflection point that will lead to sustained earnings per share growth?
How close is the company to sustainable revenue growth.
Clarification on some items in the company's cash flow statement.

For those interested in technicals, the stock price has been on a steady decline for several months.

We are initially encouraged by the following verbiage in its 2009 2nd quarter financial press release.

"We believe the worst effects from the global financial crisis on our business are now behind us," Mr. Pan said. "Sales are up 36.6% over our first quarter 2009, and we are seeing encouraging signs heading into the third quarter with positive July sales trends. In addition, the cost control measures that we have implemented over the past six months will enable us to gain efficiency and emerge an even stronger company over time."

More details will be provided if warranted.

2nd Quarter 2009 vs. 2008 Financial Snapshot Ended June 2009

	2nd Quarter 2009	2nd Quarter 2008	Period Change
GAAP Revenue	$15.4 million	$19.0 million	-18.9%
GAAP EPS	$0.07	$0.05	40.0%
Tax Rate	19.1%	8.6%	122.1%
Fully Tax-Adjusted EPS ^a	$0.06	$0.04	50.0%
Fully Diluted Shares	13,812,547	12,906,483	7.0%
Price	$1.68	n/a	n/a
Tax Adjusted trailing EPS	$0.12	n/a	n/a
Tax Adjusted P/E	14.00	n/a	n/a

Source: See Release, August 10, 2009
^a Hong Kong Highpower is not paying a full U.S. tax rate. Therefore, all EPS numbers have been adjusted by the GeoTeam® to reflect a U.S. tax rate of 36%.