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 Clean Energy (OTC.BB:CCGY)
China Clean Energy, through its wholly-owned subsidiaries, Fujian Zhongde Technology Co., Ltd. and Fujian Zhongde Energy Co., Ltd, is engaged in the development, manufacturing, and distribution of biodiesel and specialty chemical products made from renewable resources.
On April 1st, 2010, the Company reported its financial results for the fourth quarter and fiscal year ended December 31, 2009.
Check out the full details below!
HIGHLIGHTS
Fourth Quarter 2009 Highlights
— Revenue totaled $4.9 million, up 18.5% from the same period in 2008
— Gross profit totaled $0.9 million, up 52.4% from the same period in 2008
— Gross margin increased 410 basis points to 18.4% from 14.3%
— Operating income was $0.3 million, compared to operating loss of $0.2Â million in the fourth quarter 2008
— Net income was $0.6 million, or $0.02 per fully-diluted share, compared to a net loss of $0.6 million, or $0.02 per fully-diluted share in the fourth quarter 2008
— Cash and cash equivalents of $4.2 million at year-end 2009, compared to $2.9 million at year-end 2008
Fiscal Year 2009 Highlights
— Total revenue decreased 12.3% in 2009 to $15.9 million
— Gross profit totaled $2.9 million
— Gross margin was 18.5%
— Operating income was $0.9 million
— Net loss was $0.3 million, or $0.01 per fully-diluted share, compared to net income of $0.6 million, or $0.02 per fully-diluted share in 2008
— Adjusted net income (Non-GAAP) was $1.0 million, or $0.03 per fully-diluted share
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