New Energy Systems (NEWN) research, news, and more from GeoInvesting

Company description

Wed, 19 Mar 2008 04:00:00 GMT

China Digital Communication Group is a U.S. (Nevada) corporation with its business headquarters in Shenzhen, one of China's key manufacturing centers. Its primary business is the manufacture of components for batteries used in mobile phones and other digital devices. The company has set a strategic goal of becoming the largest telecom-equipment producer, marketer and distributor in China, with a significant presence in the U.S. market as well.

Notable Share Transactions

Tue, 20 Dec 2011 05:00:00 GMT

SHENZHEN, China, December 20, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of consumer branded backup power systems, lithium ion batteries, battery parts and solar panels, today announced that Chairman and CEO, Weihe "Jack" Yu, has purchased an additional 238,000 shares of the Company's common stock in the fourth quarter of 2011. Details of these open market purchases can be found in the Form 4 filed with the SEC on December 19, 2011.

"I remain confident about our Company's long-term outlook despite challenges we have experienced throughout the year," stated Chairman Mr. Yu. "As we regain our position in the market with Anytone® branded mobile power devices and grow our Kim Fai solar related products sales, my management team and I are equally confident our efforts will produce returns for our shareholders in 2012."

Resolution of Legal Issues

Wed, 14 Dec 2011 05:00:00 GMT

On December 7, Shenzhen NewPower Technology Co., Ltd. (“NewPower”), a subsidiary of New Energy Systems Group (“Company”) entered into a settlement agreement (“Settlement Agreement”) with Shenzhen Zhongte Industry and Trade Co., Ltd. (“SZIT”) resolving the action filed by SZIT in Longgang District People's Court in Shenzhen, China on October 24, 2011. Pursuant to the Settlement Agreement, SZIT shall return certain products it purchased under a sales agreement, dated May 9, 2011 between NewPower and SZIT(“Sales Agreement”). NewPower shall return RMB 9,720,000, the purchase price of the products, to SZIT. In addition, NewPower shall pay RMB 139,205 to SZIT by January 5, 2012. The Sales Agreement shall be terminated immediately and SZIT releases any and all of its claims arising out of the Sales Agreement.

Investor Alert

Sun, 11 Dec 2011 05:00:00 GMT

“I would be remiss in not acknowledging the dissent of our shareholders, including major shareholders of our stock incentive plan considering our performance in 2011,” began Weihe “Jack” Yu. “It is, nor was, our intention to reward any member of the sales and marketing team or management team shares not directly tied to the performance goals of the Company. As we work through our budget for 2012 and execute and aggressive sales strategy for the year, retaining our design, sales and marketing teams for Anytone® and KimFai solar are critical for our success and thus incentivizing our employees with stock compensation, we feel, is aligned with the goals of our organization and shareholders alike. Our Board of Directors and management team will formalize the targets and associated share-based compensation for approval by our Board and Compensation Committee before any shares are issued.” concluded Chairman and CEO Jack Yu.

Comments & Business Outlook

Thu, 01 Dec 2011 05:00:00 GMT

FY2011 GUIDANCE

As a result of the sale of E'Jenie and NewPower, the Company has been able to more accurately forecast its sales for the balance of the year and provide investors with updated guidance below.

Revenue:	$75 to $77 million
Adjusted Net Income:	$6 to $7 million
Adjusted EPS:	$0.41 to $0.48

Adjusted net income and adjusted EPS exclude estimated $0.8 million of non-cash stock-based compensation expenses, estimated $2.8 million of amortization expenses and a $13.6 million impairment of goodwill in 2011.

"We are still working our way through the impact from piracy of and increased competition in the marketplace by 'Feimaotue' (Hong Kong Exchange listed company) and 'Singwongda' (China's A-share market company), whom have recently entered the mobile power marketplace in China with their own product lines," continued Weihe "Jack" Yu. "Our new products launched at MacWorld in Beijing and the Hong Kong Electronics Fair are designed to elevate our position in the market and differentiate our product lines with consumers. To support our new product launches and to educate consumers, we will spend approximately $1.8 million over the next three months on consumer marketing and expanding distribution. We are confident the decision to focus our resources on growing Anytone and Kim Fai will provide us more sustainable returns in the years ahead."

Deal Flow

Wed, 30 Nov 2011 05:00:00 GMT

On November 24, 2011, New Energy Systems Group (the “Company”) entered into an Equity Transfer Agreement (the “Equity Transfer Agreement”) with Xuemei Fang (“Fang”) and Weirong Xu (“Xu”, and together with Fang, the “Buyers”). Under the Equity Transfer Agreement, the Company agrees to transfer 100% of the equity interest of Billion Electronics Limited (BVI) (“Billion Electronics”) to the Buyers for a cash consideration of RMB 85,553,892.75 ($13.4 million) ("Equity Transfer"). The purchase price equals the appraisal value of Billion Electronics, including its wholly owned subsidiaries Shenzhen E’Jenie Technology Development Co., Ltd. (“E’Jenie”) and Shenzhen NewPower Technology Development Co., Ltd. ("NewPower"), less RMB 153,033,107.25 of debt that the Company owes E’Jenie, which shall be cancelled upon completion of the Equity Transfer. Fang will pay RMB 51,320,335.65 for 60% of the equity interest in Billion Electronics and Xu will pay RMB 34,213,557.10 for 40% of the equity interest in Billion Electronics. RMB 17,106,778.55, or 20% of the purchase price, will be paid upon the registration of the Equity Transfer with the relevant PRC authority. Thereafter, the Buyers will pay an aggregate of RMB 5,800,000 every two months, until the purchase price is paid in full. Fang is a Vice President of E’Jenie and Xu is the Director of Marketing of NewPower.

"As discussed on our third quarter conference call, we have continued to witness a decline in our E'Jenie and NewPower business units in an increasingly competitive marketplace in China," began Chairman and CEO, Weihe "Jack" Yu. "A recent product return of approximately $1.7 million of NewPower batteries from a customer and large impairment charges we reported in the third quarter related to those two respective business units further confirmed our decision to exit these declining businesses. We are confident this move will enable us to focus on our more promising Anytone® and Kim Fai solar businesses in the coming year and improve our overall financial results."

FY2011 GUIDANCE

As a result of the sale of E'Jenie and NewPower, the Company has been able to more accurately forecast its sales for the balance of the year and provide investors with updated guidance below.

Revenue:	$75 to $77 million
Adjusted Net Income:	$6 to $7 million
Adjusted EPS:	$0.41 to $0.48

Comments & Business Outlook

Tue, 15 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

For the 3 Months Ended September 30
	Q3 2011	Q3 2010	CHANGE
Net Sales	$15.3 million	$26.4 million	-42%
Gross Margin	($0.5) million	$7.2 million	-107%
Net Income (Loss)	($16.9) million	$4.3 million	-463%
Adjusted Net Income*	($2.4) million	$5.1 million	-147%
GAAP EPS (Diluted)	($1.16)	$0.34	-441%
Adjusted EPS (Diluted)*	($0.17)	$0.41	-141%
*Adjusted net income and adjusted EPS exclude $0.2 million of non-cash stock-based compensation expenses during Q3 2011, $0.7 million of amortization expenses and a $13.6 million impairment of goodwill.

Mr. Yu continued, "We expect to stabilize margins by introducing new, innovative products that carry higher margins. In addition, we have started to identify areas within our selling, general and administrative expenses where we can become more efficient. Finally, we have engaged branding strategy and financial consultants to help evaluate and execute marketing, product development and strategic alternatives. However, we expect sales and margins to remain below our historical averages until our competitive position improves."

CFO Trail

Fri, 19 Aug 2011 04:00:00 GMT

SHENZHEN, China, August 19, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, announced that Mr. Paul Li, who was scheduled to become the new Chief Financial Officer on August 16th, will not join the Company due to personal reasons. Mr. Junfeng Chen, who was slated to step down from the Chief Financial Officer position on the same day Mr. Li started, will continue to serve as the Company's interim CFO until a permanent CFO is secured.

Separately, the Company's Chief Executive Officer, Mr. Nian Chen, announced his resignation effective August 19, 2011 due to poor performance by the Company. The Board of Directors ("the Board") has accepted Mr. Chen resignation and appointed Mr. Weihe Yu, New Energy's Chairman, to the CEO position. The Board will evaluate Mr. Yu's performance at the end of 2011 and determine whether any changes are warranted.

According to the employment agreement signed by Mr. Li and the Company on June 20, 2011, Mr. Li would become New Energy's permanent Chief Financial Officer effective August 16, 2011. However, due to personal reasons that arose subsequent to June 20, 2011, Mr. Li has decided not to join the Company. There were no disagreements between Mr. Li and the Company or any officer or director of the Company which led to Mr. Li's resignation.

New Energy Chairman, Mr. Weihe Yu said, "We regretfully accept Mr. Li's and Mr. Chen's resignations and wish them the best. The board will start the search for a new permanent CFO shortly. In the interim, we have the utmost confidence that Mr. Chen will continue to help us maintain sound financial and operating controls."

Chairman, Mr. Yu continued, "My primary focus as Chairman and CEO will be to reinvigorate profitable growth in our Anytone® batteries business. While we have already taken aggressive measures to reverse the negative impact from counterfeit products, we will redouble our efforts in product development, sales and marketing and quality controls to ensure this is a healthy and growing business."

Analyst Reports

Fri, 19 Aug 2011 04:00:00 GMT

Rodman and Renshaw on NEWN 8/19/2011

NEWN: 2Q11 Earnings Update; Lowering PT to $6.00

2Q11 Missed: NEWN reported 2Q11 revenue, Non-GAAP earnings, and Non-GAAP diluted EPS of $23.1 MM, $4.0 MM, and $0.28, lower than our estimates of $31.2 MM, $5.5 MM, and $0.38, respectively.

Revenue Mix: By product segments, battery, battery components, and solar battery products each generated $15.7 MM, $1.3 MM, and $6.2 MM in revenue, accounting for 68%, 5%, and 27% of total sales. The top-line decline was primarily driven by weaker demand in the company’s organic business, which includes battery and battery shell / cover parts, caused by the counterfeiting issues on Anytone, NewPower, and E-Jenie branded products, according to management. But the drop in battery segments was largely offset by solar segment’s contribution of $6.2 MM.

Mixed Margin Picture: Overall gross margin was 28.0%, improving from 2Q10’s 26.3% but declined from 34.9% in 1Q11. By segments, battery, battery shell parts, and solar panel products each generated 30.1%, 21.2%, and 24.1% gross margins. We believe the q-o-q decline in margin was mainly due to the shortfall in production volume and increase in average cost.

Guidance Removed due to Dampened Demand Outlook: Management removed its FY11 guidance of previously announced $130 MM $135 MM for top-line, $24.5 MM $25.5 MM for adjusted earnings, and $1.69 $1.75 for diluted EPS. The company attributes this removal to uncertainties over revenues caused by the counterfeit issues, with no specific details provided.

Revising Estimates: Due to the unclear revenue visibility, we are lowering our 3Q11 estimates to $24.2 MM for revenue, $4.2 MM for adjusted earnings, and $0.29 in diluted EPS. For full year FY11, we expect the company to deliver revenue, earnings, and EPS of $100.1 MM, $19.0 MM, and $1.30 per share, respectively. We are delaying the introduction of our FY12 estimates until we have more clarity on the top-line impact from the counterfeit issue and on the timing of solving the problem.

Valuation: Lowering PT to $6.00

At current levels NEWN is trading at P/E multiples of 1.5x to our FY11 Non-GAAP earnings estimates. This multiple is well below the peer group. We are lowering our price target on NEWN from $12.00 to $6.00, which translates into P/E multiples of 4x to our Non-GAAP earnings estimates for FY11, largely in line with its peer group listed in the US. We are maintaining our Market Outperform rating.

Risks: 1. Revenue Concentration. 2. Acquisition Integration Risks. 3. Financial Risk. 4. Highly Fragmented and Competitive Industry. 5. Raw Material Costs. 6. Inflation and Currency Risks. 7. End User Concentration

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

Tue, 16 Aug 2011 04:00:00 GMT

Mr. Jack Yu, Chairman of New Energy stated, "Like many other electronic brands, counterfeiting of our products has been an unwanted distraction to our operations and negatively affected sales volumes and margins during the quarter. We have promptly and aggressively addressed the issue with the authorities, while pinpointing culprits who have subsequently been notified by our attorneys and local authorities. Ultimately, new product development is what stymies counterfeit products and we are confident our continued emphasis on R&D and our ability to launch new Anytone® products with enhanced functionality and designs will reinvigorate consumer and distributor purchases. By acting quickly to address the commercial needs of our distribution base, we have built trust and ensured the integrity of our brand. We were also pleased with Kim Fai's results, which are on track for to exceed our original forecast for 2011."


For the 3 Months Ended June 30
	Q2 2011	Q2 2010	CHANGE
Net Sales	$23.1 million	$23.4 million	-1%
Gross Profit	$6.5 million	$6.1 million	+5%
Net Income	$3.1 million	$3.6 million	-12%
Adjusted Net Income*	$4.1 million	$4.4 million	-9%
GAAP EPS (Diluted)	$0.22	$0.28	-24%
Adjusted EPS (Diluted)*	$0.28	$0.35	-21%
*Adjusted net income and adjusted EPS exclude $0.2 million of non-cash stock-based compensation expenses during Q2 2011 and $0.7 million of amortization expenses. 2011 fully diluted shares on June 30, 2011 were 14.5 million versus 12.6 million in 2010.


For the 6 Months Ended June 30
	1H 2011	1H 2010	CHANGE
Net Sales	$50.2 million	$45.9 million	+9%
Gross Profit	$15.9 million	$12.6 million	+27%
Net Income	$8.6 million	$7.4 million	+17%
Adjusted Net Income*	$10.4 million	$9.1 million	+15%
GAAP EPS (Diluted)	$0.59	$0.58	+2%
Adjusted EPS (Diluted)*	$0.72	$0.72	-

Comments & Business Outlook

Tue, 19 Jul 2011 04:00:00 GMT

SHENZHEN, China, July 19, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, today introduced three new remote power Anytone® models for tablets and mobile devices.

New Energy's Anytone® division successfully developed three new mobile power models for leading tablet manufacturers, including Apple, Samsung and Motorola. Anytone®'s Model AT-006 "iPad Smart Power" is a light-weight, portal lithium ion battery charger that allows consumers to charge their iPad, iPod or iPhone wherever they are. The Anytone® AT-006 attaches to the iPad SmartCover. The AT-006 comes with a USB cable for use with an iPod or iPhone.

Anytone® also developed two other mobile power chargers for tablet PCs. The 8800D is designed specifically for Motorola's Xoom® tablet and is the first mobile power device manufactured for the Xoom®. The M700 is a high-capacity lithium-powered recharging device which houses two USB output ports to charge two devices at the same time. Available in black or white colors, the M700 can be used to charge the iPad, Xoom® and Samsung's Galaxy® tablet The M700 is the first mobile power charger in the market which can recharge different tablet PCs universally through transforming different voltages.

"Developing new products is the lifeblood of our organization," began Weihe "Jack' Yu, Chairman of New Energy Systems Group. "Because consumers have purchased thousands of our Anytone-branded products for their mobile phones and laptops, they will love our new battery packs for tablets as well. We believe innovative products such as these will help differentiate our brand in a competitive market and drive growth in sales and earnings."

HENZHEN, China, July 19, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, today introduced three new remote power Anytone® models for tablets and mobile devices.

Notable Share Transactions

Wed, 13 Jul 2011 04:00:00 GMT

SHENZHEN, China, July 13, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, today announced that the Company's senior management team has purchased approximately $300,000 of stock of the Company to date with personal funds.

On April 1, 2011, the Company's senior management team (including its Chairman, CEO and CFO) announced their intentions to purchase approximately $1 million of the Company's common stock in the open market. Through July13,2011, Mr. Yu has purchased approximately $200,000 of stock at an average price of $3.45per share. Junfeng Chen, our CFO, has purchased approximately $100,000 of stock at an average price of$3.39 per share. Currently, the purchase of additional shares of stock of the Company by Mr. Yu and other members of the senior management team is subject to the Company's black-out period while the Company prepares its second quarter 2011 financial filings. The Company's black-out period will terminate at the end of the first full trading day after the Company reports its second quarter results in mid-August.

"I remain extremely confident in our future growth prospects," said New Energy Chairman Weihe Yu. "That is why I am using my personal funds, along with other executives on the management team, to purchase our stock at compelling prices. Over time, I believe more investors will realize the significant investment opportunity in our stock. In the meantime, our management team remains focused on executing our growth strategy."

CFO Trail

Thu, 23 Jun 2011 04:00:00 GMT

SHENZHEN, China, June 23, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, appointed Paul Li as the Company's Chief Financial Officer effective August 16, 2011. Mr. Li replaces Junfeng Chen, who will remain the Company's CFO until the commencement of Mr. Li's appointment. There were no disagreements between Mr. Chen and the Company or any officer or director of the Company associated with Mr. Chen's departure as CFO.

Mr. Li has extensive experience as an officer and director of several publicly listed and private companies. Prior to joining New Energy, Mr. Li served as the Chief Financial Officer of Sen Yu International Inc. (OTCBB: CSWG) from September 2010. Mr. Li was a manager with Kelmar Associates LLC, a corporate regulatory compliance consulting firm providing auditing services to the U.S. government from April 2007 to January 2010. Mr. Li is a Certified Public Accountant licensed in California and New Jersey.

New Energy Chairman Weihe Yu stated, "We thank Junfeng for his hard work and welcome Paul to New Energy. With 35 years of auditing and financial management experience, Paul will lead our efforts to further improve our financial controls and reporting. He will also work with the other members of the senior management team to expand our margins and cash flows."

Analyst Reports

Fri, 20 May 2011 04:00:00 GMT

Rodman and Renshaw on NEWN 5/20/2011

NEWN: 1Q11 Earnings Update

1Q11 Results: NEWN reported 1Q11 revenue, Non-GAAP earnings, and Non-GAAP diluted EPS of $27.1 MM, $6.4 MM, and $0.44, compared to our estimates of $31.5 MM, $5.9 MM, and $0.40, respectively. 1Q top-line grew by 20.6% y-o-y from $22.5 MM in 1Q10, driven by the contribution from acquired Kim Fai solar business, which generated $5.5 MM in revenue for the quarter.

Revenue Mix: By product segments, battery, battery components, and solar battery products each generated $20.05 MM, $1.52 MM, and $5.51 MM in revenue, accounting for 74%, 6%, and 20% of total sales. The top-line growth was primarily driven by solar segment’s contribution. Finished battery segment only grew by 3.4% while battery components segment declined by 50.3% y-o-y. Management attributed some revenue losses to counterfeiting issues, which they are in the process of now addressing.

Margins: Gross profit reached $9.4 MM for the quarter, representing a 34.9% margin, compared to 28.6% in 1Q10. The higher gross margin was mainly driven by the improved production efficiency and cost saving from the production switch within finished battery assembly segment, according to the company’s 10-Q filing. The battery components segment delivered a lower gross margin of 30.6% compared to 36.0% a year ago due to a higher raw material cost.

Share Repurchase Program: Management indicated during the conference call that it is now set up to execute the share re-purchase program. They expect to act on this in line with the restriction window opening up. We believe management is serious about this effort and should be expected to execute,

Expecting a New CFO Soon: On the call, management conveyed that NEWN is close to hiring a new CFO with the board is expected to make a decision shortly. Meanwhile, management stated that its current auditor, Goldman Kurland & Mohidin, LLP, will continue to be retained for the next few quarters until a new auditor (potentially larger) is finalized.

FY11 Guidance Reiterated: Management reiterated its FY11 guidance of $130 MM $135 MM for top-line, $24.5 MM $25.5 MM (adjusted), and $1.69 $1.75 for diluted EPS (adjusted).

2Q11 Estimates: For 2Q11, we are now projecting $31.2 MM in total revenue, $5.5 MM in adjusted earnings, and $0.38 in diluted EPS. We are expecting 26.4% in gross margin and 20.4% in operating margin due to inflationary environment in China. For full year FY11, our estimates are $130.5 MM, $24.6 MM, and $1.69 per share, respectively.

Valuation: At current levels NEWN is trading at P/E multiples of 2.3x to our FY11 Non-GAAP earnings estimates. This multiple is well below the peer group. We are comfortable maintaining a $12.00 price target for NEWN, which translates into P/E multiples of 8.2x to our Non-GAAP earnings estimates for 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.

Comments & Business Outlook

Thu, 19 May 2011 04:00:00 GMT

For the 3 Months Ended March 31
	Q1 2011	Q1 2010	CHANGE
Net Sales	$27.1 million	$22.5 million	+20%
Gross Profit	$9.4million	$6.4million	+47%
Net Income	$5.5 million	$3.8 million	+44%
Adjusted Net Income*	$6.4 million	$4.6 million	+37%
GAAP EPS (Diluted)	$0.38	$0.30	+25%
Adjusted EPS (Diluted)*	$0.44	$0.37	+19%

Mr. Jack Yu, Chairman of New Energy stated, "We made further progress in transforming New Energy to an efficient, consumer-driven battery solutions company. Our proactive reorganization of our wholesale batteries businesses has already produced cost savings. Meanwhile, our new product pipeline for Anytone is as robust as it has been since we acquired the business. We also expect solid top and bottom line contribution from Kim Fai as we integrate our sales and marketing and R&D efforts. All of these developments in our business make us extremely confident in our long term growth outlook."

Business Update:

New Energy continues to make additional progress improving its operating efficiencies and expanding its product portfolio. In the first quarter of 2011, the Company completed the integration of their finished battery pack and battery cells businesses. The benefits are twofold: E'Jenie has a fully integrated battery component manufacturer capable of producing battery shells, battery caps and battery cells, making the Company more competitive with larger customers looking for one integrated provider of battery solutions. Secondly, the integration has already generated meaningful cost savings, as reflected in the margin expansion during the first quarter of 2011.

The Anytone consumer products division is focused on expanding its distribution and growing its brand recognition. By introducing compelling and differentiated new products such as the iPhone 4 battery charger, more distributors are selling Anytone's line of mobile and PC batteries to their customers.

In addition, Management is focused on building its own online and retail distribution. The Company plans to open approximately 30 franchised stores in China during 2011 to increase its brand recognition and maintain more control over its marketing. Anytone expects to incur minimal capital investment since the franchisees will be responsible for the opening and operating the stores. The Company is working with several famous online retailers in China to roll out its owned franchised online marketplace. This will allow Anytone to significantly expand its direct distribution to consumers while improving its working capital efficiencies. The online store is expected to be online at the beginning of July 2011.

2011 Guidance

Management is reiterating its 2011 guidance as follows:

Revenue:	$130 to $135 million
Adjusted Net Income:	$24.5 million to $25.5 million
Adjusted EPS:	$1.69 to $1.75

GeoTeam® Note:

2011 EPS analyst estimates currently stand at $1.50.
Annual interest income is tracking at less than 1%.

The Company recently became aware of counterfeit products using Anytone's brand name being sold to distributors and online. Management has contacted regulators and taken legal actions against several perpetrators involved with manufacturing and selling counterfeit products. While the Company believes these and other actions will significantly curtail the amount of counterfeit products, Anytone's consumer product sales may be impacted in the short term.

Since closing the Kim Fai acquisition in November 2010, Management has been successful in signing new customers and expanding its portfolio of higher-margin solar application products. Based on the strong pipeline of orders and requests for proposals Kim Fai has, the Company is confident in at least meeting and potentially exceeding the prior forecast of $24 million of revenues and $5 million net income contribution from Kim Fai in 2011.

Investor Alert

Thu, 19 May 2011 04:00:00 GMT

As of March 31, 2011, the Company had a $549,082 unsecured, due on demand, and non-interest bearing loans payable to Dongrong Xu and Zaoxian Fang, the original owners of Shenzhen Anytone, of $466,719 and $82,363, respectively, in connection with the acquisition of Shenzhen Anytone by Anytone International. As of May 17, 2011, the Company has $549,082 outstanding.

Investors may want to take notice that the company's capital requirement comments have changed slightly just within the last two months:

March 28, 2011 10K:

Historically, cash from operations, short term financing and the sale of our Company stock have been sufficient to meet our cash needs. We believe we will be able to generate sufficient cash from operations to meet our working capital needs. However, our actual working capital needs for the long and short term will depend upon numerous factors, including operating results, competition, and the availability of credit facilities, none of which can be predicted with certainty. Future expansion will be limited by economic environment for the industry and opportunities, availability of financing and raising capital by selling stock. We do not have any plans to sell our securities and there is no guarantee that if we do seek to sell securities in the future that we will be successful. We acquired Kim Fai by issuing 1,913,265 shares of common stock paying $13,000,000 by cash. During 2010, the 1,913,265 shares of common stock were issued and $6,529,286 was paid by cash. The remaining $6,470, 714 will be paid by our internally generated cash flow.

May 19, 2011 10Q

Historically, cash from operations, short term financing and the sale of our Company stock have been sufficient to meet our cash needs. We believe we will be able to generate sufficient cash from operations to meet our working capital needs. However, our actual working capital needs for the long and short term will depend upon numerous factors, including operating results, competition, and the availability of credit facilities, none of which can be predicted with certainty. Future expansion will be limited by economic environment for the industry and opportunities, availability of financing and raising capital by selling stock. We acquired Kim Fai by issuing 1,913,265 shares of common stock and paying $13,303,236 by cash. As of March 31, 2011, the 1,913,265 shares of common stock were issued and $13,303,236 was paid.

Liquidity Requirements

Thu, 19 May 2011 04:00:00 GMT

Historically, cash from operations, short term financing and the sale of our Company stock have been sufficient to meet our cash needs. We believe we will be able to generate sufficient cash from operations to meet our working capital needs. However, our actual working capital needs for the long and short term will depend upon numerous factors, including operating results, competition, and the availability of credit facilities, none of which can be predicted with certainty. Future expansion will be limited by economic environment for the industry and opportunities, availability of financing and raising capital by selling stock. We acquired Kim Fai by issuing 1,913,265 shares of common stock and paying $13,303,236 by cash. As of March 31, 2011, the 1,913,265 shares of common stock were issued and $13,303,236 was paid.

Investors should note that the 2010 10K cleary stated that the company would not need to raise equity capital:

Shareholder Letters

Fri, 13 May 2011 04:00:00 GMT

SHENZHEN, China, May 13, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group (NYSE Amex: NEWN) ("New Energy" or the "Company"), a vertically-integrated original design manufacturer and distributor of lithium ion batteries and consumer branded backup power systems, today addressed shareholder comments and questions regarding New Energy's acquisition of Kim Fai Solar ("Kim Fai') in November of 2010.

"We have been receiving numerous e-mails and calls on Kim Fai, its value to our shareholders and our relationship with Kim Fai before our acquisition in November of 2010," began Weihe Yu, Chairman of New Energy Systems Group. "When I was the president of Shenzhen Anytone ("Anytone"), one of the original shareholders in the Anytone business was an investor named Mr. Ruizheng Cheng. In addition to his support of Anytone and mobile power products, it was widely known amongst our investors and our management team that Mr. Cheng was also a strong believer of the solar power business and industry in China. In December of 2009, Mr. Cheng decided to invest in and develop a solar power business which he named Shenzhen Anysolar Co., Ltd. ("Anysolar"). Anysolar was, and is, primarily a sales agent which markets solar panels and equipment to select customers in China. Anysolar is not a manufacturer and thus outsources its Anysolar-branded original equipment and original design solar products to a number of third party manufacturers. Kim Fai Solar was one of such manufacturers. Seeing the quick development of Mr. Cheng's business and witnessing the continued growth of the Chinese solar power industry, I approached my board of directors in the third quarter of 2010 with a plan to enter the solar market by acquiring Kim Fai and subsequently their customer base. This customer based included Mr. Cheng's Anysolar company. The acquisition was completed in November 2010. On the date of the acquisition, the business between Anysolar and Kim Fai was very small compared to Kim Fai's largest customers. Such customers include: Heshan Jianhao Lighting Co., Ltd. and Dongguan SingfoSolar Technology Co., Ltd., which accounted for 13% of Kim Fai's business at the time and still remain the Company's most significant solar panel customers. Neither Mr. Cheng, nor any of Mr. Cheng's employees or advisors of Anysolar were, at any time, shareholders of Kim Fai. We recognize that the companies cooperated and co-marketed together on several occasions however they are two separate businesses. New Energy's acquisition of Kim Fai was at arm's length and did not constitute a related party transaction."

New Energy System Group has further filed an 8-K with the SEC, today which attached as an exhibit a legal opinion on the acquisition of Kim Fai. Guangdong Shendadi Law Firm in has issued a detailed legal opinion on the acquisition which indicates "the acquisition does not constitute a related party transaction under PRC laws." A copy of the 8-k and the translated legal opinion by the PRC counsel can be obtained on the SEC Website, www.sec.gov or New Energy's website.

Deal Flow

Wed, 27 Apr 2011 04:00:00 GMT

SHENZHEN, China, April 27, 2011 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group has established two separate credit lines with China-based asset management firms. The short term loans total 60 million RMB or $9.2 million USD and are earmarked for capital investment and working capital needs of the Company.

New Energy Chairman Weihe Yu explained, "These agreements provide us with additional financial flexibility to fund our future growth. After evaluating several options, we decided that securing this funding at a reasonable cost was in our shareholders' best interest. While we do not anticipate drawing on these lines immediately, having access to this funding in advance of actually needing it is a competitive advantage in the current environment."

On April 21, 2011 New Energy Systems Group entered into two separate loan agreements with Chuangding Investment Consulting (Shenzhen) Co., Ltd. ("CIC") and Beijing Guojincheng Asset Management Co., Ltd. ("GAM"). Under the agreements, CIC and GAM have each committed to lend up to RMB 30 million with an interest rate of 10% per annum. Each loan is guaranteed by Chairman Yu, is secured by 539,091 shares of the Company's common stock beneficially owned by Chairman Yu, and was not subjected to any processing or management fee. Balances on the loans can be paid down in installments or in its entirety, but mature 730 days from inception. For more details, please refer to the 8-K the Company filed with the SEC on April 26, 2011.

"We understand that New Energy, similar to many China-Based, US-Listed companies are in a situation where accessing the capital markets is not economically viable at this juncture," began Pinggui Zhang of GAM. "The reality is that many small to medium sized companies in China continue to grow rapidly and are in need of capital to achieve their goals. After extensive due diligence on the company and its growth plans, our team agreed that funding companies like New Energy Systems Group provides an excellent risk-adjusted return to our clients," Qin Liu concluded.

Investor Alert

Tue, 05 Apr 2011 04:00:00 GMT

Excerpt from New Energy Systems 4th quarter 2010 conference call:

Dan Lavine: Oh, congratulations on a great quarter and year. I am new to your story and hold a small position, but would like to add at current prices. So excuse my ignorance here, because like I said, I’m new to NEWN. Can you please give me some color on the shareholder tenure with respect to New Power and Kim Fai Solar pre-acquisition (inaudible)? For example, have the shareholders at Kim Fai been the same since inception?

Ken Lin:   I’m sorry, you mentioned the shareholder from original three subsidiary we acquired?

Dan Lavine: Yes, mm-hmm. The New Power and Kim Fai Solar, pre-acquisition.

Ken Lin:  Yes, and I’m sorry – what exactly information you want to know about those shareholders?

Dan Lavine: Well, I guess for example, have the shareholders at Kim Fai been the same ever since the beginning?

Ken Lin:   For Kim Fai and for those three companies we acquired, those shareholders, they are still the same shareholders as their original company.

Dan Lavine:  Okay

Ken Lin:  For example, Kim Fai’s shareholders have eight shareholders, and those eight shareholders is Kim Fai’s shareholders. And Anytone—I’m sorry, Anytone I don’t remember exactly, but Anytone as I remember also have eight shareholders over there, and that eight shareholders is—they are separated. There is no relationship for those shareholders, but they are—they all remain as the shareholders of each subsidiary.

Dan Lavine: Okay, thank you.

GeoTeam Update:

The GeoTeam has just obtained information indicating that Kim Fai shareholder base changed several times before its acquisition by NEWN. The last shareholder change before the acquisition by NEWN (Nov. 25, 2010, SAIC date) was only three months (Aug. 25, 2010, SAIC date) before the acquisition. Furthermore, the age of these eight shareholders, who acquired Kim Fai on Aug. 25, 2010 and sold Kim Fai to NEWN, were fairly very young at the time of the acquisition. Furthermore, the age of these latest shareholders are fairly young, arousing our suspicions that they could not have been original shareholders: The age distribution of these eight shareholders are as follows:

Pre acquisition age distribution of Kim Fai Shareholders: (8 shareholders of Kim Fai are from 19 (1992) to 30 (1981) )

one 29 year old (Born 1981) (Xiaowei Wang)
one 27 year old (Born 1983) (Yijie Li)
two 25 year old (Born 1985) (Qiongqiong Wang & Gong Wei)
two 22 year old (Born 1988) (Feng Cheng & Chunfeng Zhang)
one 20 year old (Born 1990) (Qing Xiong)
one 18 year old (Born 1992) (Di Yuan)

None of the above occupy more than 15% shares (6*14%, 9% and 7%).

Investors should begin to ask questions, as this new information clearly diverges from public statements made in the 2010 year end conference call. Now we need to ask why

"For Kim Fai and for those three companies we acquired, those shareholders, they are still the same shareholders as their original company."

We also discovered that three of these eight shareholders (Di Yuan, Qiong Xiong & Xiaowei Wang) reside in Decheng District, Dezhou City. This location coincides with the location of the current legal representative of New Power (Mr. Xiong Guofu) and the current legal representative of E'Jenie (Ms. Fang Xuemei). Two of these young shareholders (Wei Gong & Feng Cheng) appear to live in Chibi City (county), which is the same city (county) that the current legal representative of Kim Tai (Mr. Liu Qunli) and current legal representative of Anytone (Mr. Weihe Yu, the Chairman of NEWN) also seem to reside.

Meanwhile, even though Kim Tai started its business on December 8, 2005, it only changed its name and business direction to include solar energy operations after September 21, 2009 which is only one year from the acquisition deal with NEWN. At the time of these changes, the two shareholders of Kim Tai were Wei Gong (one of the eight young shareholders) (70%) and Weihai Yu (30%). Weihai Yu and Weihe Yu (the chairman of NEWN) have the same last and middle names. Based on the Chinese name tradition, it is possible that Weihai Yu and Weihe Yu are related (brothers).

Based on the Chinese name tradition, it is possible to assume that Weihai Yu and Weihe Yu are related. Thus, we would like the company to comment on this:

One year later, after these significant changes involving Kim Tai business dealings, NEWN spent USD 24 million (USD 13 million cash and 11 million restricted share) to acquire a company which appears to have commenced its solar energy business for only one year, yet claims to generate significant revenues.

Please Note:

We are still reviewing further details regarding the NEWN story, including information surrounding past management stock sales. We are also conducting a deeper review of PRC filings, originally obtained by our team, that reveals a much smaller business for E'Jenie and Anytone than what has been portrayed in SEC documents and SAIC filings recently provided by the company (we would like to know if these filings were sent to the SAT agency).
Yesterday's S-3 filing is quite perplexing.

Deal Flow

Mon, 04 Apr 2011 04:00:00 GMT

We may from time to time, in one or more offerings at prices and on terms that we will determine at the time of each offering, sell common stock, preferred stock, warrants, or a combination of these securities, or units, for an aggregate initial offering price of up to $20,000,000.

Conference Call Notes

Fri, 01 Apr 2011 04:00:00 GMT

2010 Year End CC

Ken Lin: We have fielded a few calls and visits from investors over the last month, and we are always willing to schedule visits to our dedicated facilities and our associate partners who produce any (unintelligible) products we do not manufacture in-house. We also did our own form of diligence on our SAIC reports and (inaudible) investor information at the SAIC office was accurate for 2008 and 2009, and then published a PR on our findings on March 23, 2011. In the past we, like many companies, use agents to obtain our business registration; however, we now have learned the lesson of taking this data directly from our auditor and tax accountant in China, Shenzhen (unintelligible). Our tax filing, much like any corporation, public or private, are not published. Our SEC report, our audit that were signed by our CFO and I, were accurate.

Ken Lin: We will work to address the many questions we have with our prepared comments and hope many of your have already reviewed our 10-K and press release filed yesterday and this morning.

Ken Lin: Our business is growing at a fast rate, as you can see by our guidance issued this morning. Anytone, where many of our management team has come from, including myself, is a core driver of our sales growth and will account for slightly more than 50% of our (unintelligible) sales in 2011.

Ken Lin: Targeting and developing distribution for our Anytone and MeePower products is our top priority. In the coming year, our goal is to increase our distributor base by 50% to best service the 20 province to which we sell Anytone and MeePower products. Our international sales are also beginning to deliver some traction and we recognize that this is (unintelligible). The Chinese market and the demand for power sources, particularly by Smartphones, by China consumers remains our focus in 2011.

Ken Lin: Thank you, Chairman Mr. Yu. For those joining us on the call today, we want to begin our prepared remarks with an overview of our business segment. Our business can be broadly categorized into two business segments – our battery application segment includes our branded Anytone and MeePower portable power products designed for leading consumer electronic manufacturers like Apple and RIM products, and a variety of the other consumer electronics including laptops, digital cameras, and MP3 players. We are one of select companies who can use available iPhone, iPod and iPad on our product package. As our Chairman indicated earlier, this is our focus segment and will account for 50% of our Li-ION battery (inaudible) segment sales in 2010.

The second battery segment is our production, assembly and sales of Li-ION battery parts, shells and caps, battery sales, finished battery packs. We now market and sell our battery parts and battery sales through E’Jenie brand via our battery packs sold through New Power. Each brand and product line are primarily sold to cell phone and handheld mobile device manufacturers, or other battery assembly operations in China.

Our newest segment is solar, which we entered when we acquired Kim Fai November of 2010. Solar is one of the fastest growing markets in China, which as many of you know require battery storage to function. We feel our technology and understanding of ION batteries will be a benefit for the industryand are researching ways to convert solar energy to ION battery storage. We also have a small line-up of solar power (inaudible) products made for rechargeable phones which we feel is another interesting category of products.

Our first question comes from the line of Steve Winslow with Bank of America. Go ahead, sir.

Steve Winslow:  Hey, congratulations on the quarter, guys. Seeing that your company is way undervalued here, would you be willing to entertain any offers for the company, and also will you possibly do a stock buyback? Thank you.

Ken Lin: Okay. According to the management for first question regarding to stock buyback program, basically the Company—for the Company currently have no stock buyback plan. But the reason is that in the past two years, the Company is grow very fast and also in the next several years, the Company wants to keep this path. And as you may (inaudible) Company in the past week did several acquire to—acquisition to make the Company keep growing. And in the future, the Company may look in for other targets. So for the Company would like to have some capital or cash on hand to have—to keep it growing (unintelligible) looking for the other acquisition targets. But for the stock buyback, the management personally for each management—like the Chairman, CEO, CFO, personally they will have the plan to go to the open market to buy back the stock by themselves individually.

Ken Lin:    And also for everybody can see through our 10-K and also our press release, this is showing that our growth rate and our EPS is showing our value is going down, and we do believe in the next couple years we will—the management team will keep maintain this growth and this (unintelligible), and so under that situation we believe—but if thorough investor research and also we welcome investors to visit our facilities through their research for our company. We do believe the market will give our company a fair value of our stock price, and in the future the Company, depending on the situation, the Company may have the plan to do the stock buyback but it will be not currently. In the future, it will depend on the Company’s (inaudible) situation.

Steve Winslow:  Okay. What about listening to any offers for the Company? Would you be willing to—seeing that it’s really undervalued here, would you be willing to listen to any offers from—you know, based on consolidation or possibly buying out the company, seeing as you guys are really cheap right now?

Ken Lin: You mean, you mentioned a public offering?

Steve Winslow: No, no, not—no. Not a public offering. For actually somebody—you know, another firm to buy your company. Would you be willing to entertain any offers for that?

Ken Lin: Okay, let me ask.

Ken Lin: Okay. According to management for example for the question you may have, for the—if other bigger company would like to maybe buy our stock then probably acquire our company. According to our management, especially our Chairman Jack, he mentioned after he enter in New Energy Systems Group, he have a plan for the Company’s long-term development. So as it is right now, he feel three to five years plan for the Company keep growing. So in the short term, as it is three to five years, he will keep leading the Company to keep growing and have no sold to—sold New Energy to the other company.

Steve Winslow: kay, thanks. I really appreciate it, and congratulations, guys. Keep up the good work.

Operator: And our next question comes from the line of Chang Liu with Rodman & Renshaw. Go ahead, please.

Chang Liu: Hi, this is Chang asking questions on behalf of (inaudible). Firstly, congratulations on the results. My first question is could you provide any color on the key drivers behind the guidance of 2011? We saw the guidance for 2011 is pretty strong, so I was wondering what the key drivers are.

Ken Lin: Okay. According to management, there are four key drivers for 2011 gross. First of all is related to the solar company which was acquired at the end of 2010. According to—in China situation, in the next 10 years the solar industry in China will develop very fast, and also recently China’s government has already provided some support for solar industry. And second is Anytone. We will keep expand our Anytone distributors. We just mentioned probably we will try to expand more than 20% during 2011. And also, we will keep enhance Anytone’s brand name awareness in China, and through brand names enhanced reputation, enhance our product price, but also increase a little bit, which also will benefit our profit margin. And third point—the fourth point is regarding to the New Power E’Jenie through their business which, and also increase internal resource for New Power E’Jenie finished battery pack could provide to Anytone for internal uses. And through Anytone’s sales increase the internal needed will become more, which also increase New Power and E’Jenie’s sales. And also for internal integrate the cost—management cost will keep getting—cost control become more efficient and make the cost going down. And those four points is—will be the key points for New Energy in 2011 to keep growing.

Chang Liu: Okay, thank you. So you mentioned solar segment, it’s going to be a big—you know, it’s going to be big for the growth in 2011. So who are our main customers for this segment?

Ken Lin: Okay. Currently for our Kim Fai company, the major customers which would include importer, a construction company who help to install—in their construction projects, they will install the solar device and the solar panel integrate to their project, and they will buy solar panels from Kim Fai. And second, we also will (unintelligible) that when they have infrastructure construction – for example, the (inaudible) light and the traffic light, and also the lights in a public area which they use solar panels to have the solar power – that this also second customer category for Kim Fai. And third one is also—will sell to the other solar industry company which they may need solar components products.

Chang Liu: Thank you. Regarding to the acquisition, are we planning to do more acquisitions this year in 2011?

Ken Lin: Okay. Through the Company strategy in 2011, we may consider about another acquisition; but currently there is no exactly target right now.

Chang Liu: kay. And my next question is regarding your internal controls. I was wondering what stats—or how do we improve our internal controls in terms of financial reporting and other aspects?

Ken Lin: Okay, basically according to our CFO response for the internal controls, currently we have internal control consultants to help us to itemize the weakness of our internal control in 2010, and currently there are several items we need to improve. (Unintelligible), we found several weakness and through 2010 probably around half of them have already been improved, and the other half we will keep improve through 2011, which may include we may hire more internal accountants who may have U.S. GAAP knowledge and to help to increase and enhance our internal control policies and also the process.

Chang Liu: Okay, thank you. And do we have a breakdown of revenue between domestic sales and export sales for 2010, and also what are our expectations for 2011 in terms of the sales breakdown?

Ken Lin: Okay. According to your question, the management answering for 2010 for product—the Company products which sell to internationally is majorly from Anytone, and so for Anytone sales amount in 2010, 5% are sales globally and the other 95% are domestic. And for 2011, probably the situation will be same for the product will sell to the globally will be Anytone products. And according to the management, due to we are not very famous with global markets, so we—for 2011 we estimate international sales for Anytone probably will be around 5 to 8%, but this is very rough number. We have no exactly accurate number for 2011, no.

Chang Liu: Okay. And then how do we hedge against the currency volatility in the export business in 2011? Do we have a plan to implement?

Ken Lin: Okay. Based on management’s response (unintelligible) international markets, our product sales to international markets, we focus on use our own brand name and (inaudible) due to that will be branded products, so the price will be higher than domestic which will give us more profit than the domestic products. And because, this (inaudible) could kind of reduce that effect of the increase of RMB (inaudible).

Chang Liu: Okay, thank you. And my last question – do we see any of the wage pressure going to 2011, a labor cost increase?

Ken Lin: Okay. According to management response, this is very good question that especially like in Shenzhen area. Starting on April 1, labor (unintelligible) will increase 20%. And the Company is—under institution, the Company will considering where use the restructure of the Company’s structure, which for example the Company will move Anytone—due to Anytone, just some production more in-house for testing. So this part will combine—move it to get together in the same place with Kim Fai’s facility to come back together, which easier for the Company to integrate and each other’s resource and which will lower the production cost here. And also for New Power entity as we mentioned, they are business which—and also New Power have already move to E’Jenie’s in (inaudible). They have already also move together in the same facility, which were easier for the management to probably adjust labor or adjust labor force to switch and also lower the product and major cost for these parts.

Operator: Zachary Prensky with Coyote Capital. Go ahead, please.

Zachary Prensky: ank you. I think a number of people have discussed ways to improve our profile and increase shareholder value in the short, medium term. One suggestion that I haven’t heard, and I’d like to hear management comment about, would be instituting a small, say $0.05 a quarter dividend. I don’t see why, given our cash flow and our strong 2011 expected performance, that that shouldn’t be something that management could do. I think that would be a lot better than trying to spend three to six months putting the Company up for sale, as somebody mentioned earlier. It would give existing shareholders some cash flow, some comfort that our financials are real, and provide some immediate value to shareholders. So I’d like to hear management comment on a potential dividend plan.

Ken Lin: Okay. According to management’s response, there are three points. This a very good question, and management had three points for response. First of all as previous we mentioned, management mentioned, the Company director have three to five-year plan, and according to the research and according to China’s current situation, there are still many chance and very—many opportunity for company keep growing as currently—as prepares us currently. So for this keep growing, for this part and also the second point, the Company as you saw from our 10-K, the Company’s business development is at a fast pace. And the Company wants, during this three to five years, the Company wants to maintain the same pace to keep growing, and also as mentioned previous, we also are looking for new target for acquisition to expand our company’s size. And for both of these, the Company will all need some—have some cash or capital on hand for future—for this three to five year direction, the Company will need some cash on hand for using on this parts. And the third point is which for the dividend part, due to the first, second—the first two points, the Company currently have no (unintelligible) dividends due to, like for example, for the acquisition maybe during Q3. The Company is doing the research, but no exactly target. But for the estimate, it probably for the Q3 will have some—may have some acquisition, but cannot guarantee, just have that intention. And so under this situation, the Company currently don’t have the thought to have a dividend to the shareholder, but probably next year when we prepare—next year when we prepare for 2011’s annual report, at that time, the Company will remember this part and may reconsider again at that time.

Zachary Prensky:  Yes, I mean, I’m really sorry to hear that. I’m extremely disappointed. The Company’s Board and management should run the Company on behalf of its shareholders, and just because they think an acquisition is in the best interest of the company, I think the share price is telling you that the shareholders would like to see our existing businesses better valued; and currently they are not, and so I think it behooves management and the Board to take this very seriously and not just shelve this to 2012. I’m really disappointed with what you had to say about this, and I think most shareholders are.

Ken Lin:  Okay. According to management, for your remark that the management team is very appreciate, and also currently the management team, the Company do have no concern about a dividend. But after this meeting, the Company will (inaudible) thinking seriously and also we have the Board and also the Company management to internal discussion. And if they have any decision made, we will announce this as soon as possible.

Operator:  And our next question comes from the line of Dan Lavine, private investor. Go ahead, sir.

Dan Lavine: Oh, congratulations on a great quarter and year. I am new to your story and hold a small position, but would like to add at current prices. So excuse my ignorance here, because like I said, I’m new to NEWN. Can you please give me some color on the shareholder tenure with respect to New Power and Kim Fai Solar pre-acquisition (inaudible)? For example, have the shareholders at Kim Fai been the same since inception?

Ken Lin:   I’m sorry, you mentioned the shareholder from original three subsidiary we acquired?

Dan Lavine: Yes, mm-hmm. The New Power and Kim Fai Solar, pre-acquisition.

Ken Lin:  Yes, and I’m sorry – what exactly information you want to know about those shareholders?

Dan Lavine: ell, I guess for example, have the shareholders at Kim Fai been the same ever since the beginning?

Ken Lin:   For Kim Fai and for those three companies we acquired, those shareholders, they are still the same shareholders as their original company.

Dan Lavine:  Okay

Ken Lin:  For example, Kim Fai’s shareholders have eight shareholders, and those eight shareholders is Kim Fai’s shareholders. And Anytone—I’m sorry, Anytone I don’t remember exactly, but Anytone as I remember also have eight shareholders over there, and that eight shareholders is—they are separated. There is no relationship for those shareholders, but they are—they all remain as the shareholders of each subsidiary.

Dan Lavine: kay, thank you.

Notable Share Transactions

Fri, 01 Apr 2011 04:00:00 GMT

SHENZHEN, China, April 1 /PRNewswire-Asia-FirstCall/ -- New Energy Systems Group today announced that the Company's senior management team (including its Chairman, CEO and CFO) has committed to personally buying approximately $1 million stock via open market purchases.

"On our recent earnings call we promised to personally buy additional shares, and I am pleased to announce we are following through on our promise," stated Jack Yu, Chairman of New Energy Systems Group. "As the Company's single largest shareholder, I am highly incentivized to help create shareholder value. I have never sold any of my NEWN shares and I am a firm believer in our Company's ability to execute on our business plans. Given our Company's exciting growth prospects and attractive valuation, I can think of no better place to invest than in New Energy Systems Group. Along with our CEO, CFO, I have initiated the process to open trading accounts with a U.S. based brokerage firm. Once these accounts become active, we will begin buying shares. We are also evaluating other alternatives designed to create shareholder value and will update investors as appropriate."

Analyst Reports

Wed, 30 Mar 2011 04:00:00 GMT

Rodman and Renshaw on NEWN 3/30/2011

NEWN: 4Q10 Earnings Update

4Q10 Results: NEWN reported 4Q10 revenue, Non-GAAP earnings, and Non-GAAP diluted EPS of $22.4 MM, $4.5 MM, and $0.35, beating to our estimates of $20.9 MM, $3.8 MM, and $0.29, respectively. 4Q top-line grew by 113.4% y-o-y from $10.5 MM in 4Q09, driven by the contribution from acquired Anytone portable power devices and NewPower Li-ion battery products. The recently added Kim Fai solar business generated $3.1 MM in revenue for the quarter.

Key Takeaways: The initial stock reaction, yesterday, to the company’s results and guidance was positive but the intra-day trading momentum may have been overdone and the stock ended down 5% for the day. We believe the company’s continuing efforts to consolidate the business post acquisitions is a positive and should simplify the business for investors to understand. The plethora of electronic devices and gadgets in the market should support the company’s growth efforts. Management has indicated that they are working on improving the company’s internal controls to better reflect its position as a publicly reporting entity. We believe improvements demonstrated on this front will be important to gain investor confidence.

Potential Apple Tailwind in 2011: In domestic Chinese market we expect a higher penetration of Apple (AAPL, Market Outperform)’s products from new iPad and iPhone series in FY11. NEWN’s Anytone subsidiary, which runs Anytone® and MeePower® brands, should be well positioned to capitalize on the accessory market opportunity through its expansion in sales and marketing. The company expects to increase its distributors in 2011 to enhance its brand name and achieve market share gains.

FY11 Guidance: Management issued FY11 guidance of $130 MM $135 MM in revenue, $24.5 MM $25.5 MM in Non-GAAP earnings, and $1.69 $1.75 in diluted Non-GAAP EPS.

Revising Estimates: For 1Q11, we are expecting revenue, Non-GAAP earnings, and Non-GAAP diluted EPS of $31.5 MM, $5.9 MM, and $0.40. Our full year projections are now $131.1 MM, $24.6 MM, and $1.70, respectively.

Valuation: At current levels NEWN is trading at P/E multiples of 3.5x to our FY11 Non-GAAP earnings estimates. This multiple is well below the peer group. We are comfortable maintaining a $12.00 price target for NEWN, which translates into P/E multiples of 8.2x to our Non-GAAP earnings estimates for FY11, still implying a discount compared to 20.9x multiple for its peer group listed in the US.

Risks: 1.Revenue Concentration. 2. Acquisition Integration Risks. 3. Financial Risk. 4. Highly Fragmented and Competitive Industry. 5. Raw Material Costs. 6. Inflation and Currency Risks. 7. End User Concentration

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

Tue, 29 Mar 2011 04:00:00 GMT

Based on the strong demand across each of its businesses, Management has provided the following guidance for 2011:

Revenue: $130 to $135 million

Adjusted Net Income: $24.5 to $25.5 million

Adjusted EPS: $1.69 to $1.75 (Based on 14.5 million shares outstanding

Mr. Jack Yu, Chairman of New Energy stated, "2010 marked the first year our newly consolidated business with Anytone® portable power devices, NewPower li-ion batteries and our traditional E'Jenie battery components business. I am very pleased with the 2010 results achieved in all of our divisions and future prospects for our newly acquired solar business, KimFai. The focus of our business remains portable battery power devices for leading consumer electronic manufactures like Apple® and li-ion batteries sold primarily to manufactures of consumer electronic devices. We are well positioned to leverage each division's technology to achieve superior economies of scale. We will continue to prudently manage expenses across the Company and have begun plans to consolidate our battery components and battery manufacturing under one division. We feel this will enable us to better manage resources while directing our R&D and sales teams to develop and market our higher margin Anytone® products for the fast-growing Chinese smartphone and mobile device market."

Comments & Business Outlook

Mon, 28 Mar 2011 04:00:00 GMT

NEW ENERGY SYSTEMS GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2010 AND 2009

	2010			2009

Revenue, net
Battery	$	79,814,242		$	19,918,846
Battery shell and cover		11,758,403			6,457,044
Solar		3,089,012			-
Total revenue		94,661,657			26,375,890

Cost of sales
Battery		58,170,005			13,735,160
Battery shell and cover		8,170,779			4,596,379
Solar		2,104,528			-
Total cost of sales		68,445,312			18,331,539

Gross profit		26,216,345			8,044,351

Operating expenses
Selling		422,491			124,845
General and administrative		5,940,666			1,213,783
Total operating expenses		6,363,157			1,338,628

Income from operations		19,853,188			6,705,723

Other income (expenses)
Other expense		(735	)		(5,794	)
Interest income (expense)		75,417			(49,436	)
Total other income (expense), net		74,682			(55,230	)

Income before income taxes		19,927,870			6,650,493

Provision for income taxes		4,738,485			813,098

Net income		15,189,385			5,837,395

Other comprehensive income
Foreign currency translation		608,355			81,816

Comprehensive income	$	15,797,740		$	5,919,211

Net income per share
Basic	$	1.25		$	0.91
Diluted	$	1.18		$	0.82

Weighted average number of shares outstanding:
Basic		12,191,008			6,393,067
Diluted		12,896,826			7,150,642

Fourth Quarter 2010 Financial Highlights
For the 3 Months Ended December 31, 2010
	2010	2009	CHANGE
Net Sales	$22.4 million	$10.5 million	+113%
Gross Profit	$6.4 million	$3.3 million	+ 94%
Net Income	$3.6 million	$2.0 million	+ 80%
Adjusted* Net Income	$4.5 million	$2.2 million	+107%
GAAP EPS (Diluted)	$0.26	$0.20	+ 30%
Adjusted* EPS (Diluted)	$0.35	$0.31	+ 13%

Twelve Months 2010 Financial Highlights
For the 12 -Months Ended December 31, 2010
	2010	2009	CHANGE
Net Sales	$ 94.7 million	$ 26.4 million	+ 259%
Gross Profit	$ 26.2 million	$8.0 million	+ 228%
Net Income	$ 15.2 million	$ 5.8 million	+ 162%
Adjusted Net Income*	$ 18.8 million	$ 6.1 million	+ 208%
GAAP EPS** (Diluted)	$1.18	$0.82	+ 44%
Adjusted EPS** (Diluted)*	$1.46	$0.85	+ 72%

Liquidity Requirements

Mon, 28 Mar 2011 04:00:00 GMT

Research

Fri, 25 Mar 2011 04:00:00 GMT

In order to aid in our due diligence into the NEWN story, we are requesting that the company and or IR respond to the following comments:

Topic 1: We have been informed that the company has been telling investors that we do not have all the subs for NEWN PRC filings we obtained and had sent to management. Please inform us of the subs that we may have missed. According to your most recent power points, 2009 revenues were all derived from E'jenie. The information we obtained and sent to the company, several months ago for 2008 and 2009, was for data pertaining to E'jenie and Anytone (not relevant for 2008 or 2009). What did we miss?

Topic 2: Have you (IR) ever attempted to pull past SAIC filings or are you relying on the filings that the company (Chariman) has/will be providing you?

Topic 3: Are you (IR) aware of or can you confirm if the company made any changes to the original 2009 SAIC filings that has taken almost two years to show up in the SAIC electronic data base. If so, were the SAT agency and related divisions notified of changes?

Topic 4. Have you or the auditor personally visited the office of the SAT to verify numbers on SEC and SAIC documents?

Topic 5: What has been the average daily production output of E'jenie's different lines in 2008, 2009 and 2010?

Topic 6: I understand that production lines of subs are in the process of being combined/moved. Can you please identify who is moving where? When did these moves occur (if completed).

Topic 7: Do any of NEWN's subs outsource manufacturing (In 2008, 2009, and 2010)? If so, how much and what is actually being outsourced.

Topic 8: Your recent power point's revenue distribution pie chart contradicts earlier presentations as well as your 2009 10K. I assume this is just a typo, but you might want to amend the relevant November 2010 and March 2011 8Ks. Do you plan on doing so?

Topic 9: Do you perform a year end joint inspection review with SAIC and SAT agencies?

Comments & Business Outlook

Wed, 23 Mar 2011 04:00:00 GMT

SHENZHEN, China, March 23, 2011 /PRNewswire-Asia/ -- New Energy Systems Group announced today that its 2008 filings for each of its subsidiaries; Shenzhen Anytone Technology Co., Ltd., E'Jenie Technology Development Co. Ltd. , Shenzhen NewPower Technology Co. Ltd., and Kim Fai Solar Energy Technology Co., Ltd., are accurate and current with the State Administration of Industry and Commerce ("SAIC"). The Company further confirmed that its 2009 filings have been submitted to the SAIC and are still being processed for public access at SAIC offices. New Energy is further providing summary detail below on its revenue, gross profit, operating income and net profit in RMB submitted to the SAIC for its 2008 and 2009 filings.

Investor Presentations

Wed, 16 Mar 2011 04:00:00 GMT

On March 7, 2011, New Energy Systems Group made a presentation to investors at the Rodman & Renshaw Annual China Investment Conference.

Analyst Reports

Mon, 28 Feb 2011 05:00:00 GMT

Rodman and Renshaw on NEWN 2/28/2011

NEWN: 4Q10 Preview; Maintain Estimates

Businesses On Track: Based upon our discussion with management, we believe NEWN’s major business areas, including finished battery packs, battery cells, battery shell/covers, and the newly acquired solar battery products are progressing in line with expectations. The company’s “made for iPod / iPhone / iPad” products under MeePower brand are gaining traction thanks to the recent relationship with China Unicom (CHU, Not Rated), who have been selling MeePower products through a total of 39 retail branches in 8 major cities in China since October. Going into 2011, we expect to see more of China Unicom’s retail outlets to potentially distribute MeePower products given a high level of popularity of iPhone 4 in China bundled with China Unicom’s service package.

Stock Performance: On an YTD basis, NEWN shares have been under pressure, down by 27.3%, given the scrutiny toward small cap Chinese companies especially ones that (1) have gone through M&A transactions over the past year and (2) currently engage smaller sized auditors. Though the fundamental story has not changed for NEWN we believe investors are looking for indications of improvement on corporate governance and auditing fronts (i.e. move to a bigger auditor).

Maintain 4Q10 Projections: We believe NEWN is on track to meet its revised guidance for FY10 of $95 MM in revenue $18 MM in Non-GAAP earnings, and $1.40 in diluted EPS. We are maintaining our 4Q10 projections of $20.9 MM in revenue, $3.8 MM in Non-GAAP net income, and $0.29 in Non-GAAP EPS. For full year numbers, our projections are $93.1 MM, $18.1 MM, and $1.40, respectively.

Valuation: At current levels NEWN is trading at P/E multiples of 4.1x and 3.7x to our FY10 and FY11 Non-GAAP earnings estimates. These multiples are below the peer group. We are comfortable assigning NEWN a $12.00 price target, which translates into P/E multiples of 8.4x and 7.6x to our Non-GAAP earnings estimates for FY10 and FY11. We believe these are the 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.

Investor Alert

Fri, 04 Feb 2011 05:00:00 GMT

NEWN is no longer considered a Tier 1 stock due to mismatched filings. See GeoAlert.