http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11115769
There are actually another 35 pages that were released to the OTC market (under code WHHT) that were not included in the ASX Beijing announcement.
Having read through the particulars of the contract, I am much more confident about the direction of the company.
Some queries I had after reading through the ASX announcement such as project distribution after the 6 year period is explained much better in the OTC ann.
See some below extracts that explain how the income distribution after the six year project period works:
Project income distribution to Party B shall be in the form agreed upon this agreement after the completion of the project, and providing necessary assistance to Party B in financial confirmation and audit.
Income distribution
1 、项目运营收益来源为广告费收入；
Income from advertising expenses is the source of project operation income.
2 、乙方获得项目收益的方式见《附件三：深圳市网合科技股份有限公司项目收益确认方案》。
Concerning method of Party B to gain project income, see Attachment 3 Income Confirmation Scheme of Shenzhen WONHE Technology Co., Ltd.
3 、根据实际广告费的产生方式，甲方向乙方提供相应的凭据，必要时可委托由乙方或双方认可的独立第三方对项目收益进行审计。
Party A shall provide corresponding credentials to Party B on the basis of producing method for actual advertising expenses. The independent third party should be entrusted to conduct audit which approved by Party B or both parties if necessary.
深圳市网合科技股份有限公司项目收益确认方案
Income Confirmation Scheme of Shenzhen WONHE Technology Co., Ltd.
一、项目收益来源
Ⅰ . The Project Revenue Sources
项目收益来源于通过北京地区无线网络覆盖项目，向无线网络用户推送广告，形成的广告费收入。
Project revenue comes from the advertising fee by serving the advertisements to the wireless network users through the project of Wireless Network Coverage Project in Beijing Are.
甲方将委托 北京零度聚焦广告有限公司 和 北京大小广告有限公司 在北京地区无线网络覆盖项目进行广告宣传。
Party A will entrust Party A will entrust Beijing Lingdu Jvjiao Advertising Co., Ltd and Beijing Daxiao Advertising Co., Ltd to advertise the Wireless Network Coverage Project in Beijing area.
二、分配方式
Ⅱ . Distribution Methods
为保证乙方的投资收益，在项目运营期的前六年（自 2016 年 11 月 1 日至 2022 年 10 月 31 日），采用固定额度收益模式，甲方应该按照收益表《附表三：深圳市网合科技股份有限公司项目固定额度收益表》约定，按期向乙方支付收益。如果项目当期实际收益未达到规定的固定收益额度，由甲方补足。
To ensure the Party B's income on investment, in the first six years of operation period of the project (from November 1, 2016 to October 31, 2022), fixed quota revenue model will be adopted, the Party A shall be in accordance with the income schedule, Attachment III: Schedule for the Project Fixed Income of Shenzhen WONHE Technology Co., Ltd ., paying the income earnings to the Party B on schedule. If the project's actual current earnings could not meet the prescribed fixed income amount, Party A shall make the difference up
The above point protects WOnhe in the event that project is not as profitable as planned, Guandong (Party A) still needs to make up any shortfall.
There appear to be other clauses that protect WOnhe (Party B)
十、赔偿责任
Liability for compensation
乙方对任何损失均不负赔偿责任，但由于严重违反本协议规定的义务而造成的直接损失除外。
Party B shall not be liable for indemnity of any loss, excluding direct loss caused by a serious violation of obligations under this agreement.
Also, it is interesting to see the provinces in Beijing it will be covering. See below:
二、项目工程
Project Engineering
1 、本项目工程命名为北京地区无线网络覆盖项目。
This project engineering is named Wireless Network Coverage Project in Beijing Area.
2 、项目位于北京市通州区、昌平区、顺义区、门头沟区、大兴区、房山区、怀柔区、平谷区。其确切位置可以根据现场条件在详细设计阶段予以确认。
The project is located at Tongzhou District, Changping District, Shunyi District, Mentougou District, Daxing District, Fangshan District, Huairou District, Pinggu District of Beijing City. The exact position can be confirmed in the detailed design stage according to field condition.
“ 工程范围 ” 指北京市通州区、昌平区、顺义区、门头沟区、大兴区、房山区、怀柔区、平谷区无线网络覆盖的建设和运营范围。
“Engineering scope” means the construction and operation scope of the wireless network coverage in Tongzhou District, Changping District, Shunyi District, Mentougou District, Daxing District, Fangshan District, Huairou District, Pinggu District of Beijing City.
A quick google search of the population of these districts in Beijing shows:
Tongzhou: 1.2M
CHangping: 1.7M
Shunji: 783K
Mengtou: 270K
Daxing: 1.35M
Fangshan: 814K
Huairou: 370K
Pinggu: 480K
Therefore, there is a potential reach of up to 7 million people in Beijing where the project is being developed!
From reading the Beijing ann, it looks like that the investing cash outflow showing in the latest quarterly relates to the pilot project in TOngzhou it developed. USD 5.78M appears to translate to the AUD shown in the ASX announcement.
Wonhe will also contribute the network that it recently developed in the Tongzhou District of Beijing as a pilot project, at a cost of 38,000,000 RMB (USD $5.78 million).
（ 9 ）乙方已经建设的北京市通州区试点项目工程的费用。
Cost for pilot engineering project in Tongzhou District of Beijing City which has been constructed by Party B.
All in all, the quarterly looks great and this announcement could take the company into the stratosphere. I think the ASX announcement was a bit misunderstood by the market. I have no doubt in due course WMC will get the re-rating it deserves.
Cheers
