Brian Lin
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Latest Comments14 Comments
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
growing market opportunity as China begins to implement these necessary fire
safety standards. We look forward to updating investors on our progress over
the balance of the year as we continue to reach our corporate initiatives.
Brian Lin
Chief Executive Officer,
China Fire & Security Group, Inc.
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
Thanks for the compliments. We certainly will work hard to increase values of our shareholders.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
Thanks for the understanding.
We are doing everything we can do increase shareholder value. Financially, even though we don't provide guidance for 2007, we do have a committment to our PIPE investors in the form of "make Good" number - comprehensive income above $0.46 per share. If we don't make this number, certain personal shares of the Chairman and myself will be given to PIPE investors. Business wise, in addition to our continous focus on Iron and Steel industry, Power plant, and Petrochemical plants, we are expanding into Transportation industry and other vertical industries. We also very much focus on investor relations. I personally go to US and meet with institional investors on the quarterly basis. We have talked with many analysts and have research reports from three brokerage firms. We applied for Nasdaq and was just approved by Nasdaq on July 10. This showcases our focus on improving our corporate governance and this move will lead to increased visibility, liquidity and institutional sponsorship for the Company.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
Sorry about my late reply but I thought I submitted it earlier. Anyways, here is my comment:
Linear Heat Detectors are used in many industrial environments, including Iron and Steel plants, Power plants, Petrochemical plants, highway tunnels, etc. In China, we are working with government to release fire codes for different industries to ensure appropriate amount of linear heat detectors are deployed in industrial plants for fire detection. Even though there is no legislation on non-compliance yet, plant owners are paying more and more attention to fire safety due to various potential liabilities.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
1) I'm sorry but we don't provide any guidance on our financial related information. But historically we have been growing over 30% top line and we don't see any reason we can slow down.
2) In our last press release, we announced that we will issue a press release for contracts over US$3 million.
3) We have been very strong in Iron and Steel industry with a significant portion of our business coming from clients in this industry. We can't say the exact percentage over the years but Iron and Steel industry will remain a focus of CFSG, probably still be the relatively largest contributor to our revenue. In our 10-KSB, we stated that we are expanding into other vertical industries, including Transportations
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
There are currently three independent analysts covering the Company. They are Roth Capital Partners, Susquehanna International Group and HC Wainwright. Please contact your sales person at each respective firm if you would like a copy of the report.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
I know this might be not what you want to hear, but it is important for you to carefully go over our 10kSB for disclosure on investing in our company.
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Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
1. As a corporate policy, we don’t provide guidance on anything related to our financials. However, as a leader in China’s industrial fire protection industry, we certainly expect to have certain percentage of the market opportunities. We have moved our major manufacturing to a leased facility in Tianjin to support our continued growth.
2. CFSG has been providing fire protection total solutions for industrial clients in China with only a few contracts overseas. I agree with you that we should have cost advantages compared with our multinational competitors but we need to have a formal strategy laid out before we enter into international market place.
3. Chinese LHD standard is higher than the internationally accepted UL standard. Until today, none of the multinational companies have passed the latest Chinese LHD standards. From this perspective, CFSG does have the advantage of delivering certified products for Chinese market.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
I’m sorry but I can’t comment on the questions you asked but they are valid questions. We will try to disclose the average size of the contracts for Total solutions, Product sales and Maintenance services in our future filings. As far as pipeline, we have a policy of releasing the information on the annual basis.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
2. We are waiting for approval from NASDAQ.
3. We have not been officially offered to acquire our company since we became public since Oct 2006. If we do get such offers in the future, we will bring them to our board for appropriate actions.
4. Sometimes it helps, just as in the US, nationalism is important.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
You asked some really tricky questions :)
1. We have been working with multinational companies on OEM agreements for our products, including LHDs. We already have one agreement and expect to have more in the near future.
2. There is not much changes since our Q1 conference call. With the new features, we do expect the selling prices for the new LHDs to be higher than the old LHDs.
3. We have been following many contracts some of them are quite significant in size. Our contract win with AnShan Iron & Steel showcases our capability in winning larger contracts even though we do have smaller contracts every week from our sales offices throughout China. However, we only release our backlog number on the annual basis.
4. As we reported before, we already expanded our manufacturing capacity for LHDs which is running about 50% of capacity. With fairly small investment, we could double our LHD manufacturing capacity within relatively short period.
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
Thank you for your question.
As high-tech enterprises and Foreign Invested Enterprises (“FIEs”), the income tax rates for our Chinese subsidiaries for 2007 are zero. Going forward, for 2008, Sureland Industrial and HuaAn will continue to pay zero tax rate while Sureland Equipment will start paying 12% tax.
Beginning January 1, 2008, the new Enterprise Income Tax (“EIT”) law will replace the existing laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises (“FIEs”). The key changes are:
a. The new standard EIT rate of 25% will replace the 33% rate currently applicable to both DES and FIEs, except for High Tech companies who pays a reduced rate of 15%;
b. Companies established before March 16, 2007 will continue to enjoy tax holiday treatment approved by local government for a grace period of either for the next 5 years or until the tax holiday term is completed, whichever is sooner. These companies will pay the standard tax rate as defined in point a above during the grace period.
Our subsidiaries were established before March 16, 2007 and therefore are qualified to continue enjoying the reduced tax rate as described before. Since the detailed guidelines of the new tax law is not publicized yet, the Company can not determined what the new tax rate (15% or 25%) will be applicable to the Company and its subsidiaries after the end of their respective tax holiday terms.
For detailed description of our taxes, please refer to our 10-QSB:
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The income tax rate of zero percent doesn’t mean certain Chinese companies don’t pay taxes at all. In comparison with US income taxes, Chinese companies pay a Value Added Tax (VAT) of 17% for any product sales. For example, if a contract value is $1 million, we would pay government a VAT of $145,299, assuming there is no VAT deductible. CFSG has reported VAT on sales and VAT on purchases of $1,333,888 for the three months ended March 31, 2007.
Hope this helps,
Brian
Interactive Q&A: Brian Lin, CEO of China Fire and Security Group, Inc. (CFSG.OB)
Thanks for your questions. I would like to answer them in the order they appeared:
1. CFSG has been helping Chinese government drafting, reviewing and finalizing fire codes for different industries. In particular, on April 13, 2007, the Ministry of Construction has issued “Code of Design on Fire Protection and Prevention for Iron and Steel Metallurgy Enterprises” where our Chinese subsidiary, Sureland Industrial Fire Safety Limited, is one of the two chief editors. The fire codes are quite comprehensive focusing on automated fire detection and alarm systems, and automated fire extinguishing systems, among other features. All design institutes will design new Iron & Steel plants based on the new fire codes. All regional fire bureaus will certify plants for fire safety based on the new fire codes. CFSG is the leader with many patents in Linear Heat Detector (LHD) which is the key fire detection product for industrial environment. CFSG also has water mist system which is commonly used as part of the automated fire extinguishing systems.
2. As we announced in our news release dated April 17, 2007, we have set up an independent board of directors and applied for a listing with NASDAQ. We are progressing pretty well and hope we will be listed by the end of the year.
Thanks,
Brian