AGORACOM Small-cap Investor Relations Blog

As many of you know, we are very bullish on the long-term future of Chinese small cap and mid cap companies for two reasons:

1] The obvious reason – China is the fastest growing economy on the planet and nothing is going to slow down its ascent over the next 50 years and beyond. Investing in growth companies there just makes too much sense.

2] Great Results and Valuations – Many Small Cap Chinese Companies are listing in the US (OTCBB, NYSE Alternext and NASDAQ) with great financial results. Unlike many dubious US Small Cap Companies, Chinese Companies don’t seem to believe in losing money or failing to execute in a business plan. As such, 7-digit revenues and profits are very common.

From a valuation point of view, many Chinese companies became a victim of their own success in Q4 2008 and Q1 2009. Why? When the world needed to start liquidating, one of the first places they looked were China where most investors had significant gains to sell into. This resulted in the proverbial baby being thrown out with the bathwater and some great valuations.

TODAY’S FEATURED COMPANY

China Wind Systems Inc – Nasdaq:CWS

China Wind Systems supplies forged rolled rings to the wind power and other industries and industrial equipment to the textile and energy industries in China. With its newly finished state-of-the-art production facility, the Company plans to increase its production and shipment of high-precision rolled rings and other essential components primarily to the wind power and other industries.

On March 31, 2010, announced its financial results for the fourth quarter and fiscal year ended December 31, 2009.

Check out the full details below!

Read Full Press Release

China Stocks TV Segment

HIGHLIGHTS

Fourth Quarter 2009 Highlights
— Net revenues increased 45.9% year over year to $15.9 million
— Revenue from the sale of forged products for the wind power and other
industries increased 111.4% year over year to $10.5 million, or 65.9%
of net revenues
— Revenue from the sale of forged products exclusively to the wind power
industry increased 327.1% year over year to $6.8 million, or 43.0% of
net revenue
— Gross profit increased 63.2% year over year to $4.3 million
— Net income allocable to common shareholders was $1.1 million, or $0.05
per diluted share
— Excluding a $1.6 million deemed preferred dividend and other non-cash
expenses, adjusted net income was $2.7 million, or $0.11 per diluted
share, up 86.0% year-over-year

2009 Full Year Highlights
— Net revenues increased 26.4% to $53.5 million year over year
— Revenue from the sale of forged products for the wind power and other
industries increased 104.2% year over year to $35.7 million, or 66.8%
of net revenues
— Revenue from the sale of forged products exclusively to the wind power
industry increased 198.5% year over year to $20.1 million, or 37.6% of
net revenue
— Gross profit increased 22.5% to $12.9 million
— Net income allocable to common shareholders was $5.6 million, or $0.24
per diluted share
— Excluding deemed preferred dividends and other non-cash expenses,
adjusted net income was $7.8 million, or $0.34 per diluted share, up
35.1% from adjusted net income of $5.8 million, or $0.27 per diluted
share, in 2008
— Opened new forged product manufacturing facility in Wuxi City
— Began construction of electro-slag remelted production line
— Listed on the NASDAQ Global Market

YOUR RESEARCH STARTING POINTS FOR CHINESE SMALL CAP AND MID CAP COMPANIES

We’ve provided investors with two great starting points to research great Chinese small cap and mid cap companies.

1. ChinaSecurities.com – ChinaSecurities.com tracks 250 of the best small cap and mid cap companies trading on North American exchanges. It provides you with the best of the best in two ways. First, the front page lists the best news of the day coming out of the space. It does so by giving you a text view of the best press releases by industry and via Chinese Stocks TV, a 5-minute broadcast every morning just after the open. Chinese Stocks TV is archived, so you can catch up on shows you missed.

Second, if you want to research each of the 250 companies to find candidates for your portfolio, it has a very intuitive directory that lets you quickly review each company on the master list, or parse it out by industry and exchange if you have a particular sector of interest. Cool stuff.

2. Right here on AGORACOM, you can refer to our China category for other featured Chinese Small-Cap Companies. As always, we will disclose any IR relationship with any public company. Given the sheer number of great Chinese Small-Cap Companies out there, you can expect us NOT to have an IR relationship with most of these companies.

Regards,
George