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

They are a provider of distributed power generation systems in China and a fast-growing manufacturer of wind turbines. In fact, they are the largest provider of distributed power generation systems in China and they built China’s largest wind turbine manufacturing facility so this is a real serious company.

On April 9th, the Company announced its unaudited financial results for the fourth quarter and full year ended December 31, 2008.

Check out the full year results below!

Read Full Press Release

China Stocks TV Segment

HIGHLIGHTS

• Revenue up 73.5% to $265 million
• Net Income up 87.% to 28.5 million

MY COMMENTS:

On a diluted EPS basis, it’s just $1.01 per share compared to $2.23 last year. That’s roughly cut into half but that’s not because their operating results didn’t live up to standards, it’s because they actually increased their fully diluted share number from about 7 million shares to 28 million shares (or four-fold) so they still did pretty well all things considering.

Also, you have to take this into account; Cash position $43.5 million. If you divide that by the number of shares outstanding, they’ve got a $1.50 in cash. Why is that important you ask? The Company closed yesterday at 4.47, let’s just call it 4.50. Take away that $1.50 in cash you can buy this company for just $3.00 a share and given the fact that they came in at a $1.01 EPS, you’re getting this company at 3 times earnings unless there’s something in this closet that we don’t know about that’s happened over the last year, this is unbelievable value.

As always, this is my view in a snapshot.  It is intended to give you a running start into your research.  Now, you have to do your own due diligence to make sure the valuation is not impaired by other factors including balance sheet items, lawsuits or any other negative events.

If you have any comments, I’d love to see them below.

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. Chinse 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

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

Sino Clean Energy is a U.S. publicly traded company and a China-based producer and distributor of coal-water mixture (”CWM”). Based in Shaanxi Province, Sino Clean Energy is the largest CWM producer in Northwestern China.

On May 18th, the Company announced its financial results for the first quarter ended March 31, 2009.

Read Full Press Release

China Stocks TV Segment

HIGHLIGHTS

• Total Revenue increased 211.4% year-over-year to $77 million
• Net Income increased 199% year-over-year to $1.6 million
• As of March 31, 2009, the Company had $5,597,911 in cash and cash equivalents

MY COMMENTS:

On the other side of the balance sheet, total liabilities were $6,544,405, working capital was $4,492,540, and total shareholders’ equity was $16,272,187. The Company closed yesterday at $0.38

As always, this is my view in a snapshot.  It is intended to give you a running start into your research.  Now, you have to do your own due diligence to make sure the valuation is not impaired by other factors including balance sheet items, lawsuits or any other negative events.

If you have any comments, I’d love to see them below.

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. Chinse 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

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

Jinpan International Ltd., designs, manufactures and distributes cast resin transformers for voltage distribution equipment in China and other countries around the world.

On May 15th, the Company announced their consolidated financial results for the first quarter ended March 31, 2009.

Read Full Press Release

China Stocks TV Segment

HIGHLIGHTS

• Net sales: $32.4 million, a 36.1% increase
• Net income: $4.7 million, or $0.58 per diluted share, an increase of 94.9%

MY COMMENTS:

In the financial outlook for the full year 2009, the Company anticipates net sales of approximately $176 million to $182 million, a 14% to 18% increase. They are also expecting net income to come in between $22.5 – $23.3 million. That’s going to translate into earnings per share between $2.75 – $2.85 per share. Company closed yesterday at $20.60

As always, this is my view in a snapshot.  It is intended to give you a running start into your research.  Now, you have to do your own due diligence to make sure the valuation is not impaired by other factors including balance sheet items, lawsuits or any other negative events.

If you have any comments, I’d love to see them below.

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. Chinse 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

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

Based in Shenzhen, China, FUQI International, Inc. is a leading designer of high quality precious metal jewelry in China, developing, promoting, and selling a broad range of products in China’s large and expanding Chinese luxury goods market.

On May 15th, the Company announced their financial results for the first quarter ended March 31, 2009.

Read Full Press Release

China Stocks TV Segment

HIGHLIGHTS

• Revenues up 41% to $109.4 million
• Net income up 52% to $9.7 million, or $0.45 per diluted share
• Cash and Cash Equivalents of $54 million

MY COMMENTS:

I did a quick calculation regarding the last point. This means the Company’s got about $2.50 per share in CASH. So you’re buying the Company for $6.50 but they’ve got $2.50 in cash so you can really buy this business right now for $4.00 a share. That’s the calculation I’m doing but make sure you go do it too. Here’s why this is even more important. Financial outlook for the year. Revenue they are calling for between $442 – $465 million. The BIG number, net income of approximately $32 -$35 million. That will put their earnings per share between $1.49 – $1.63. If you compare this to $4.00 earnings when you strip out the cash, there is unbelievable value here unless there is something sitting in the closet so you got to make sure you do your own due-diligence. Company closed yesterday at $6.49

As always, this is my view in a snapshot.  It is intended to give you a running start into your research.  Now, you have to do your own due diligence to make sure the valuation is not impaired by other factors including balance sheet items, lawsuits or any other negative events.

If you have any comments, I’d love to see them below.

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. Chinse 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

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

Founded in 1995, with profitable sales in 2008 of approximately $190 million (+25%), the Company has grown to become one of the top importers of luxury vehicles in China. Imported luxury automobiles have been the fastest growing segment of the still young Chinese automobile industry. The Company has fueled its sales and profit growth by also becoming one of China’s top logistical servicing and dealer financing companies for other automobile importers.

On May 15th, the Company announced their First Quarter numbers.

Read Full Press Release

China Stocks TV Segment

HIGHLIGHTS

• Revenues up 35% to $45.1 million – Pretty good considering this is a luxury car importer. Someones gotta tell the Chinese that there is a world-wide recession going on !
• Net Income 10.09% to $1,161,183 or $0.06 per share

MY COMMENTS:

Now this is what’s important. Accounting for approximately 98% of the Company’s first quarter revenues, luxury imported auto sales gre 37.19% not only that, the average selling price per unit increased nearly 11% from &71,244 to $78,858, indicating continuing strong demand among affluent Chinese consumers for bigger cars, despite the economic environment. Now that’s GREAT meta-data right there. It’s a great indication of what’s going on in China and how it’s being affected by what’s going on around the world. The Company has grown to become one of the top importers of luxury vehicles in China. The Company closed yesterday at $3.90

As always, this is my view in a snapshot. It is intended to give you a running start into your research. Now, you have to do your own due diligence to make sure the valuation is not impaired by other factors including balance sheet items, lawsuits or any other negative events.

If you have any comments, I’d love to see them below.

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. Chinse 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