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MaxSoar Group is an investment analysis team. We research and analyze a broad spectrum of financial assets including stocks, bonds, mutual funds, real estate properties, and private companies. Our knowledge and connections are especially strong in mainland China, Hong Kong, Taiwan, U.S. west,... More
  • Actions And Ritu Announced MP4 + GPS Solution For Mobile Devices 0 comments
    Jun 19, 2012 9:27 PM | about stocks: ACTS

    Unlike many Chinese small caps, the last stock I initiated coverage, Action Semiconductor, is household brand name and well known company in China. There are wealthy dose of articles in China every month about the company's products (or consumer electronics using the company's products), technologies, major events (e.g. the grand opening of their new Headquarter in April), or simply a review or analysis of the company itself. The management team is very low key, kind of the total opposite of the management team of Apple or Amazon. Thus, they rarely actively showcase positive developments to their investors in the U.S.

    Last night, I found another news piece for ACTS written in Chinese that is quite interesting and very bullish development for the company in my opinion. For whatever reason, the company decides not to put out formal news release in the U.S. for this significant development. I am just going to post the news here on my personal blog to share with my closest followers and people who are the most interested in the stock (in other words I don't want to spook the management team's intention of keeping this under the radar for now).

    Without further due, here is the big deal: Actions and the 2nd biggest Chinese electronic map provider Ritu (http://ritu.cn/index.aspx) announced a joint-developed solution that put GPS function in all MP4 devices (which pretty much means all portable devices with mid to high end multi-media function)! This news was reported by two of the biggest electronic news sites in China:

    http://www.eeworld.com.cn/qrs/2012/0613/article_10553.html (6/13)

    http://gps.yesky.com/378/32258878.shtml (6/14)

    I see this as a win-win situation because both companies can benefit greatly by integrating its own product with the other company's products. I think it is likely that most portable devices that use Ritu GPS map will use Actions' chipset too. According to this report - http://tech.qianlong.com/33443/2012/06/19/4682@8051747.htm - in 2011 there were 6.86 million units of portable GPS devices sold in China, a YOY growth of 31% from 2010. I call this "traditional portable GPS market" because these devices provide mostly GPS function but very limited multi-media functions. Because this market is only at its infant stage, annual growth rate in the next several years likely will be even higher. Assuming that it grows 40% this year, there will be 9.6 million units sold, of which about 1.05 million units will belongs to Ritu.

    Now, that is only for the traditional GPS market. New portable MP4 devices that adopt Ritu and Actions' solution can easily dwarf that number as the units of MP4 sold in China every year is probably in hundreds of millions.

    Disclaimer

    I am a completely independent analyst and am not paid by any company of which the stock I cover or write articles about. However, I may have long or short position on a stock I cover or write about at any time.

    My ratings and/or analyses of a stock only represent my personal view on the stock and/or my assessment on the probable movement of the stock price in the next 12 months. They are by no means a guarantee of performance on any long or short trades on a stock and should not be relied upon solely for buying or selling a stock. Every investment, no matter how compellingly appealing it seems, involves risk. Investors should do their own due diligence and consider personal risk tolerance, preferences and needs when making an investment or a trading decision. All materials are subject to change without notice. Information is obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed.

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