Agoracom Blog

Chinese Small-Cap Company Feature: China Advanced Construction Materials

Posted by AGORACOM at 12:37 PM on Friday, November 21st, 2008

AGORACOM is a sponsor of the Roth China Vegas Conference and reporting on some of the incredible companies that are presenting at this conference.  As many of you know, we are very bullish on the long-term future of Chinese Small Cap Stocks 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]  Many Small Cap Chinese Stocks are listing in the US (OTCBB, AMEX and graduating higher) 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.


In addition to the featured company below, you can refer to our China category for other featured Chinese Small-Cap Companies, or view our extensive coverage of them on AGORACOM TV .  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.


China Advanced Construction Materials (OTCBB: CADC)

80% of China ACM revenues are directly derived from major state-owned construction companies.  China ACM is a producer of advanced construction materials for large scale commercial, residential, and infrastructure developments. The company is primarily focused on producing and supplying a wide range of advanced ready-mix concrete materials for highly technical, large scale, and environmental construction projects

Financial Highlights for Q1 Ended September 30, 2008

  • Revenue decreased to $5.0 million, up from $6.0 million in the corresponding period in 2007.  However, decrease in revenue is due to a switch to higher margin products, as reflected in gross margin increases below.
  • Gross profit increased by 170% to $2.7 million, representing a 52.3% gross margin, compared with gross profit of $1.0 million, or a 17.2% gross margin, for the same period in 2007. The increase in gross profit is mainly attributable to a deliberate shift in the Company’s product and services mix.
  • Net income increased to $1.1 million, as compared to a $1.0 million for the same period in 2007.  However, this quarter also included one-time expenses related to completion of a reverse merger transaction.


“”We look forward to beginning the projects recently awarded to us such as the East Datong to Gudian railway and the Beijing to Shi Jiazhuang high-speed railroad. As a result of these and other projects underway, our current backlog stands at over 1.5 million cubic meters of ready-mix concrete through June 30, 2009, securing our ability to achieve a net income of at least $9 million for fiscal 2009, after adjusting for certain transaction-related charges and expenses.”

Xianfu Han, Chairman and Chief Executive Officer

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