Grand Power Logistics Continues To Rise On More Insider Buying

MARKET CAP: $4,904,983

January 13, 2015 - Since the alert from TSX Tech News And Analysis at the start of the year on Grand Power Logistics Group Inc.  (GPW.V), the stock has risen 18.5% from 5 cents to 6.5 cents. It has more than doubled from December lows of 3 cents, sparked by insider buying and a stock repurchase program. On December 29, GPW's CFO Alan Chan purchased 130,000 shares at 4 cents and followed that up with a 50,000 share purchase at 5 cents on January 8. Another insider purchased 200,000 shares at 6.5 cents during the summer according to CanadianInsider:

In December, the company authorized a share repurchase program of about 5% of the outstanding float or 3,773,000 shares, citing a strong cash balance and a belief that the shares are highly undervalued. The company has already repurchased and cancelled 502,000 shares according to the data above.

TSX Tech News And Analysis has a 42 cent target price on GPW. GPW has achieved a 2 cent EPS over the past year with 36% revenue growth so far for the nine months in 2014. According to GPW's stock quote on, the official stock quote site for TSX-listed stocks, GPW has a P/E Ratio of only 2.2 and a P/B Ratio of only 0.342 with much of that being in the form of cash.

Investors should expect a big move from GPW in 2015 because of the share repurchase program, strong revenue growth and very cheap multiples. With 502,000 shares purchased so far, the company still has 3,271,000 shares to repurchase on the open market.

Grand Power Logistics: A Stock With A Low P/E, A Share Repurchase Plan and Insider Buying

MARKET CAP: $3,773,064

January 2, 2015 - Grand Power Logistics Group Inc.  (GPW.V) has risen from 3 cents to as high as 6 cents on heavy volume recently, sparked by insider buying and preparation for a stock repurchase program. On December 29, GPW's CFO Alan Chan purchased 130,000 shares at 4 cents, in addition to the 200,000 shares purchased by another insider at 6.5 cents during the summer according to CanadianInsider:

In December, the company authorized a share repurchase program of about 5% of the outstanding float or 3,773,000 shares, citing a strong cash balance and a belief that the shares are highly undervalued as reasons to undertake it. TSX Tech News And Analysis agrees with this assessment as it has a 42 cent target price on GPW. GPW has achieved a 2 cent EPS over the past year with 36% revenue growth so far for the nine months in 2014. At 5 cents, the P/E ratio for GPW is only 2.5.

Investors should expect a good 2015 from GPW because of the share repurchase program and strong revenue growth. At some point in time nearly 3.8 million shares will have to be purchased on the open market. GPW's Level 2 bids and asks point to a high price increase as there are currently 630,000 shares on the bid between 3 and 5 cents but only 159,000 on the ask side at 10 cents or below. At any point in time the company could decide to make its first purchase of shares and take the stock price to 10 cents. Investors have the added bonus of a safety net if they buy shares now. Since they know that the company will be purchasing shares, there will be enough liquidity on the bid side to ensure that they can sell the stock at a good price should they need to do so at some point in time during 2015.

Delayed Market Depth By Price Summary

Last Market by Price Update: 02 Jan 2015 11:29 ET

Instrument Name: Grand Power Logistics Group Inc.      Symbol: GPW
The market data displayed is provided on a 15-minute delayed basis and we do not guarantee its accuracy or completeness. Please refer to the date/time stamp above to obtain the age of the data in this table.
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Grand Power Logistics Group Inc. Announces Plans to Repurchase Common Shares


CALGARY, ALBERTA--(Marketwired - Dec. 8, 2014) - Grand Power Logistics Group Inc. (the "Corporation" or "Grand Power") (TSX VENTURE:GPW) announces that it has filed with the TSX Venture Exchange a Notice of Intention to Make a Normal Course Issuer Bid which shall commence on December 8, 2014 and terminate on December 7, 2015 or the earlier of the date that all shares which are subject to the Normal Course Issuer Bid are purchased.
In the opinion of the Board of Directors of Grand Power, the market price of the Common Shares of Grand Power does not accurately reflect the value of those shares. As a result, the Corporation intends to repurchase Grand Power's Common Shares that may become available at purchase prices which make the purchases an appropriate use of the funds of the Corporation.
Grand Power intends to attempt to acquire up to an aggregate of 3,773,000 of its Common Shares over the next 12-month period, representing approximately 5% of the issued and outstanding Common Shares of Grand Power.
Purchases subject to the Normal Course Issuer Bid will be carried out pursuant to open market transactions through the facilities of the TSX Venture Exchange. The Member through which the Normal Course Issuer Bid will be conducted is Wolverton Securities, Calgary, Alberta. All Common Shares purchased by Grand Power under the Normal Course Issuer Bid will be cancelled.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Grand Power Logistics Group Inc.
Alan P. Chan
Secretary and Chief Financial Officer
(403) 228-3013
(403) 237-8211

Grand Power Logistics Reports Excellent Q2 2014 Results

MARKET CAP: $4,904,983

August 29, 2014 - Grand Power Logistics Group Inc.  (GPW.V) reported its Q2 results on SEDAR on Friday. From the MD&A:

"Sales revenue for the three months ended June 30, 2014 increased by $7,066,266 (52.67%) to $20,481,130 from $13,414,864 in 2013. The increase in sales revenue is primarily due to the unexpected improvement in air freight business in the Corporation’s Hong Kong division and the increase in ocean freight business. Gross profit for the three months ended June 30, 2014 increased by 71.77% to $1,707,677 compared to $994,145 in 2013, and gross profit margin increased to 8.34% compared to 7.41% for 2013. The increase in gross profit is primarily due to the increase in revenue.

The income from operations for the three months ended June 30, 2014 increased by 162.3% to $378,570 compared to a loss of $607,229 for 2013. The improvement is primarily due to a higher gross profit and a decrease in general operating expenses. General operating expenses for the three months ended June 30, 2014 decreased by 17.00% to $1,329,107 compared to $1,601,374 in 2013 despite the significant increase in sales revenue. The decrease in corporate operating expenses was primarily due to the decrease in general and administrative expenses as the Corporation continues to reduce its overhead expenses.

The net loss for the three months ended June 30, 2014 was $87,188 compared to a net profit of $485,959 in 2013. The net loss attributable to the owners of the Corporation for the three months ended June 30, 2014 was $87,191 compared to a net profit of $480,115 in 2013. The decrease in net profit was principally due to the decrease of the Company’s share of equity value in associated companies in the amount of $416,881. Without accounted for this equity value, the Company would have a net profit of $329,693."

The company showed strong growth in revenue and operating profit. The bottom line was negatively impacted thanks to the loss in equity value in its associated companies, which has traditionally been a positive mover for the company. Posted below are the last eight quarters of financial results from Page 6 of GPW's MD&A so we get a good sense of where they have been headed.

We can see that Q2 2014 is the second highest period for revenue out of the last eight quarters and the best when it comes to gross profit so the company has been on the right track. Even when ignoring the very good revenue growth for the past three quarters, GPW is clearly quite undervalued. The market cap is $4.9 million and the share price is 6.5 cents. The last four quarters have seen over $73 million in gross revenue with an EPS of 2.1 cents. GPW's price to earnings ratio is only 3 and the price to sales ratio is a minuscule 0.07, easily one of the lowest on the TSX, especially for a company with a positive working capital and good revenue growth.

Year over year revenue growth has been a strong 21.7% and annual gross profits were $5.6M compared to $4.6M in the previous four quarters for a growth rate of 22.7%. With these types of results we should expect a target P/E ratio of at least 20, or 42 cents a share. 42 cents per share would result in a market cap of $31.7M or a very low 0.43 price to sales ratio.

As a comparison, Fireswirl Technologies (FSW.V) has achieved $49.1M in revenue for the past four quarters with a $9.6M market cap so that company has a very low price to sales ratio of only 0.2 but that's still three times higher than GPW's price to sales ratio. FSW continues to have net losses and has a revenue growth rate of 30.1% for Q2 2014 and 17.9% for the first half of 2014, inferior to GPW's 52.7% growth rate for Q2 and 40.6% for the first half of 2014. GPW is a highly undervalued stock to watch for the remainder of 2014.

Management appears to agree that the stock price is undervalued as one member purchased 300K shares over the summer at 6.5 cents according to CanadianInsider:

Biotech Company Comes Back To Life After Positive Study Results

MARKET CAP: $5,912,040
WORKING CAPITAL (FROM Q1 2014): $4,863,860

August 19, 2014 - iCo Therapeutics Inc. (ICO.V) rose 40% to 7 cents on over 17 million shares traded today after the company announced positive Oral Amphotericin B Study results on the treatment of HIV. From the release:

"There are a number of HIV latent reservoirs that are not inducible and our partners at ImmuneCarta were pleasantly surprised that six of the seven samples had inducible latent reservoirs in our study," said Dr. Peter Hnik, Chief Medical Officer of iCo Therapeutics.  "By turning on expression of latent HIV proviruses, reactivation strategies such as Oral Amp B, could contribute to a reduction of HIV infection.  Given these promising results, we are now evaluating the next steps in the developmental path for Oral Amp B."

While the sample size of 7 patients is small, the news that this therapy could reduce the risk of HIV infection has brought back life into this company after the stock price got hammered in June following the disappointing results of the iCo-007 Phase 2 iDEAL Study for Diabetic Macular Edema. ICO is trading below its working capital and investment holding value so investors realized that even with a small study, these results warrant giving substantially more value to ICO's pipeline. Even though iCo-007 has disappointed thus far, it, Oral Amphotericin B and iCo-008 deserve some market value for the potential that they hold.

ICO's value can be split into three distinct categories:

Working capital was $4.9M according to Q1 results ended March. Assuming a cash burn rate of $1M for the quarter, we can estimate working capital will be $3.9M or 4.6 cents per share.

ICO holds shares in IMNP, pictured below from the Q1 MD&A:

IMNP closed at $4 today so the 654K shares lead to $2.62M US in value. The warrants have a strike price of $2.63 so ignoring all time value that leads to an intrinsic value of $1.37 or $0.17M US in value for a total of $2.79M US or about $3M Canadian. The holdings in IMNP are worth 3.5 cents per share for ICO. There is great potential for the value in these shares to rise as IMNP is listing on the NASDAQ this week, is seeking analyst coverage and has several ongoing Phase 2/3 Trials, including the ones for Bertilimumab (iCo-008) .

With Amiket and Crolibulin at more advanced stages, IMNP doesn't even need to succeed with Bertilimumab to provide ICO shareholders with upside potential. If IMNP were to increase to $10, ICO's investment in IMNP would be worth 9.5 cents on its own. If IMNP were to reach $20, the value to ICO would be 19.5 cents per share. Any success with the iCo-008 (Bertilimumab) Phase II clinical trial in patients with ulcerative colitis will provide investment gains on IMNP and immeditate increased value to iCo-008 based on its chance of successful treatment of one ailment, leading to a higher possibility that it can treat more.

The largest value potential is ICO's product pipeline. Prior to the disappointing results on iCo-007, Zack's Investment Research had a 90 cent target on ICO, broken down by parts:

Zack's has since released a 15 cent target based on writing off all value for iCo-007. The firm believes ICO has $17.5M in value but uses the fully diluted share count of 115 million to lead to the 15 cent target. The majority of the options and warrants have strike prices above 50 cents. If they were to be exercised they would bring additional cash to the company. But it is fair to assume that at 7 cents, exercise of the options and warrants are not imminent and it is fairer to divide the $17.5M market cap estimate by 84.46M shares to lead to a 20 cent target.

Based on the low share price, TSX Tech News And Analysis believes that further license agreements similar to the one with IMNP is the best course of action to maximize shareholder value at these prices while conserving cash. If  iCo-008 and  iCo-009 have $35M in value, let's assume a partnership deal would leave ICO with a 25% stake in both of them. $35M x 25% is $8.75M or about 10 cents per share.

  • Working capital: 4.6 cents per share
  • Value of holdings in IMNP: 3.5 cents per share
  • Value of the pipeline: 10 cents per share

TSX Tech News And Analysis is aligned with Zack's 20 cent target on ICO. If IMNP continues to successfully advance Bertilimumab or another one of the drugs in their pipeline it could be much higher than that.

iCo Therapeutics Announces Positive Oral Amphotericin B Study Results


VANCOUVERAug. 19, 2014 /PRNewswire/ - iCo Therapeutics Inc. ("iCo" or "the Company") (TSX-V: ICO) (OTCQX: ICOTF), today reported results of its Oral Amphotericin B (Oral Amp B) drug candidate targeting latent HIV reservoirs.  The study, conducted by ImmuneCarta®, the immune monitoring business unit of Caprion, evaluated in vitro effectiveness of Oral Amp B in reactivating latent HIV viral reservoirs which remain present in individuals despite intensive treatment with antiretroviral therapy.
Memory cells, or white blood cells, from eight HIV-infected subjects with a durable viral suppression using antiretroviral therapy (HAART) were obtained and exposed in vitro to various concentrations of Oral Amp B. Samples from one  patient were determined not to be susceptible to reactivation.  In the remaining subjects, Oral Amp B demonstrated a reactivation response of HIV viral production in six out of seven in vitro cultures with detectable HIV reservoir.  Some HIV reservoirs are not possible to reactivate and this may explain why one culture did not show reactivation response.
"There are a number of HIV latent reservoirs that are not inducible and our partners at ImmuneCarta were pleasantly surprised that six of the seven samples had inducible latent reservoirs in our study," said Dr. Peter Hnik, Chief Medical Officer of iCo Therapeutics.  "By turning on expression of latent HIV proviruses, reactivation strategies such as Oral Amp B, could contribute to a reduction of HIV infection.  Given these promising results, we are now evaluating the next steps in the developmental path for Oral Amp B."
About iCo Therapeutics iCo Therapeutics in-licenses and redefines existing drug candidates or generics by employing reformulation and delivery technologies for new or expanded use indications. The Company has exclusive worldwide rights to two drug candidates - iCo-007 for Diabetic Macular Edema (DME) and iCo-008 for other sight-threatening diseases. iCo-007 is in Phase 2 clinical studies for DME. With Phase 2 clinical history, iCo-008 is targeted for the treatment of keratoconjunctivitis and wet age-related macular degeneration. In addition, iCo holds worldwide rights to an oral drug delivery platform. The first platform candidate is the Oral Amp B Delivery system, utilizing a known anti-fungal drug to treat life-threatening infectious diseases. iCo trades on the TSX Venture Exchange under the symbol "ICO" and the OTCQX under the symbol "ICOTF". For more information, visit the Company website
No regulatory authority has approved or disapproved the content of this press release. Neither the TSX Venture Exchange nor its Regulatory Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Forward Looking Statements Certain statements included in this press release may be considered forward-looking statements" within the meaning of applicable securities laws.  Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods and includes, but is not limited to, statements about the intended use of proceeds of the Offering. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on iCo's current beliefs as well as assumptions made by and information currently available to iCo and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based only on information currently available to iCo and speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by iCo in its public securities filings and on its website, actual events may differ materially from current expectations. iCo disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE iCo Therapeutics Inc.

ZKL Spikes on Outstanding Financial Results


January 1, 2014 - China Keli Electric Company Ltd. (TSXV:ZKL), rose an outstanding 400% yesterday on 665K shares traded, the highest ever daily volume for the company, thanks to the release of their Q2 financial results ended October 31 which included a 33% increase to revenues and 50% increase to net profit. This financial release appears to have been a tipping point for the company as it has always traded at an extreme discount to its revenue and net income.

Through its subsidiary Zhuhai Keli, ZKL develops, designs, manufactures and markets high-voltage switches, breakers, auto-control equipment, high voltage complete electric sets and high-power resistors for China's power industry. The record setting revenue growth and strong increase in profits is assisted by China Keli's Product Manufacturing/Sales License Agreement with Siemens signed in April 2013. The agreement not only stimulates revenue growth today, but should shore up future revenue growth as the contract calls for substantial increases to the sales targets over the next four years. From the NR:

"The agreement, which will be renewed annually provided Keli complies with the terms, recognizes that Keli has appropriate high quality manufacturing facilities and quality control procedures to comply with the stringent requirements for the manufacture of Siemens-designed electrical equipment. Siemens and Keli have agreed to some production and sales targets, which increase substantially over the first four years of the agreement, and will bring increased revenues to both companies."

A summary of ZKL's income statement can be seen below:

ZKL FY 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 Q1 2014 Q2 2014
Product Revenue 14,789,775 4,473,675 3,216,377 14,121,450 4,364,610 4,621,420
Service Revenue 276,786 303,197 1,311,426 3,166,566 979,581 1,414,794
Revenue 15,278,059 4,054,351 4,055,778 2,625,393 4,331,039 15,066,516 4,776,872 4,527,803 2,967,761 5,015,580 17,288,016 5,344,191 6,036,214
Cost of Goods Sold 9,020,376 2,409,549 2,377,265 1,788,347 2,773,266 9,348,382 3,096,234 2,995,604 1,891,348 3,356,785 11,339,971 3,682,301 4,116,633
Gross Margin 6,257,683 1,644,802 1,678,513 837,046 1,557,773 5,718,134 1,680,638 1,532,199 1,076,413 1,658,795 5,948,045 1,661,890 1,919,581
Gross Margin % 41.0% 40.6% 41.4% 31.9% 36.0% 38.0% 35.2% 33.8% 36.3% 33.1% 34.4% 31.1% 31.8%
Operating Expenses 6,368,872 1,170,220 1,177,328 1,470,615 1,305,419 5,123,582 1,194,949 1,271,462 1,447,562 1,242,242 5,156,215 1,179,863 1,504,925
Operating Profit -111,189 474,582 501,185 -633,569 252,354 594,552 485,689 260,737 -371,149 416,553 791,830 482,027 414,656
Operating Margin % -0.7% 11.7% 12.4% -24.1% 5.8% 3.9% 10.2% 5.8% -12.5% 8.3% 4.6% 9.0% 6.9%
Net Profit -765,014 380,872 343,144 -603,461 223,138 343,693 289,446 143,897 -386,691 393,835 440,487 254,972 216,640
Profit Margin % -5.0% 9.4% 8.5% -23.0% 5.2% 2.3% 6.1% 3.2% -13.0% 7.9% 2.5% 4.8% 3.6%
YoY Revenue Growth % -1.4% 17.8% 11.6% 13.0% 15.8% 14.7% 11.9% 33.3%
YoY Operating Profit Improvement 634.7% 2.3% -48.0% 41.4% 65.1% 33.2% -0.8% 59.0%
Income Attributed to Common Shareholders -1,088,801 604,568 1,059,510 -357,438 -16,021 1,290,619 355,615 421,432 -354,364 652,070 1,074,753 675,841 541,225

The company recently split out product and service revenue within their reporting. While product revenue has remained relatively flat, it is the installation service revenue that has seen strong growth from less than $277K for the full fiscal year of 2012 to nearly $3.2M for fiscal year 2013. But Q2 2014 saw a 44% jump in product revenue from $3.2M to $4.6M, shortly after the Siemens agreement was signed. Gross margins have been trending downwards but overall profit margins have been about flat as operating expenses have remained steady even as revenue grows.

The last four quarters saw $19.4M in revenue, $942K of operating profit, $479K of net profit and $1.5M of comprehensive income used to calculate an EPS of  1.7 cents per share. Comprehensive income is greatly assisted by the rising RMB versus the Canadian dollar since 2012. Excluding currency effects the EPS is 0.5 cents per share. All of these numbers compare very favourably versus the company's market cap of $9M at 10 cents per share. The price to earnings ratio is reasonably low, ranging from 6 to 20 while the price to sales ratio is very low at 0.47 despite the stock price quintupling overnight.

For the four quarters from Q3 2012 to Q2 2013, revenue was $16.2M so the trailing 12-month revenue saw an increase of 19% to $19.4M. Operating profit grew from $365K to $942K while net profit grew from $53K to $479K. The largest driver of the earnings growth is the vastly improved Q3 which is seasonally the worst quarter for the company and is the only one in which the company still loses money. Given the strong increase in net income, the steadily growing increase in revenue in the last quarter and the Siemens deal, ZKL should be valued at much higher metrics than a 20 P/E or 0.47 P/S. Click here to see the Reuters comparison of ZKL to its industry and sector as summarized in the charts below.

Although these numbers are not yet updated for the Q2 release (for instance the P/S metric of 0.51 includes Q2 2013 instead of Q2 2014), they tell a very clear story of the company being undervalued by multiple times when compared to its industry and sector of electrical components/equipment in Asia. ZKL's price to sales ratio is 7 times lower than the industry and 62 times lower than the sector. The P/E ratio of 22.27 is more than three times lower than the industry of 72.87 and over 100 times lower than the sector. Even when looking at balance sheet results, ZKL's tangible price to book value is 0.55, more than 6 times lower than the industry and 4 times lower than the sector. Price to cash flow is the only metric in which ZKL appears to be appropriately priced versus the market as the accounts receivable for the company is high relative to its size.

The company's growth rates (Most Recent Quarter and Trailing Twelve Month) from Reuters shows that it is in line with the industry for top line sales and superior its sector by 3-4x. However, the Reuters' most recent quarter shows the weaker Q1 results of 11.9% growth in revenue and not the 33% seen in Q2. As calculated above the latest TTM revenue growth rate is 19% while the net profit growth rate of $479K from $53K implies a far superior 803% earnings growth, but that number is assisted by having a very small denominator.

Consider that all of the previous analysis has taken place after the company already improved from 2 cents to 10 cents. The sector analysis includes all Asian companies so while stronger Japanese and Korean companies offset some of the impact, other Chinese companies which are supposedly susceptible to fraud are also included in the group and yet ZKL was very cheaply priced even relative to them.

Why has ZKL been priced so low for so long? Similar Chinese companies trading in the US like China Electric Motor, Inc. (CELM) were found out to be frauds in 2010 and 2011 and trade at very low multiples compared to their reported numbers which in all likelihood are inaccurate. Canadian investors are particularly sensitive thanks to the financial shenanigans uncovered at Sino Forest which eventually led the company to becoming delisted. ZKL has been discounted to an extreme amount due to the misdeeds of others despite the fact that no one has ever accused them of wrongdoing more than two years after the allegations against CELM, TRE and others came to light. With continued reporting and the contract with Siemens it looks more likely that ZKL is a legitimate company with strong current earnings potential and great growth prospects. There is no reason to discount it to such an extent where its price practically assumes it is a fraud. Each individual investor should evaluate their own risk tolerance for Chinese companies, however there is no evidence to suggest that ZKL is involved in any wrongdoing.

Given the superior growth metrics and far superior value metrics, it is reasonable to assume a target where ZKL should be 10 times its current price. Nonetheless, TSX Tech News and Analysis will discount this target by 50% to account for the higher risk of this tainted sector to come to a 50 cent price target for ZKL. Even at 5 times the price, the P/S of around 2.5 and the P/E ratio of around 100 show a company that is conservatively valued versus its peers.