Agoracom Blog

Chinese Small-Cap Company Feature: China Advanced Construction Materials

Posted by AGORACOM at 9:30 AM on Wednesday, February 10th, 2010

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.

AGORACOM AS A STARTING POINT FOR CHINESE SMALL CAP COMPANIES

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.

TODAY’S FEATURED COMPANY

China Advanced Construction Materials (NASDAQ: CADC)

China ACM is a leading 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.

On February 10th 2010, China ACM announced its unaudited financial results for the fiscal year 2010 second quarter and six months ended December 31, 2009.

HIGHLIGHTS:

  • Net revenue increased 141.6% year-over-year to a quarterly record $26.2 million;
  • Gross profit increased 32.3% year-over-year to $5.2 million;
  • Gross margin was 20.0% versus 36.5% in the same quarter last year, but higher than the 16.9% in the fiscal 2010 first quarter;
  • Net income available to common shareholders increased 226.5% year-over-year to a quarterly record $7.6 million

Most importantly, the company reported earnings of $0.22/share. If you extrapolate that over the year, you have a company with ~ $0.90 EPS, yet trading at just over $5.00.  You do the math but that sounds like pretty good value to me.  Check out the full details below.

Read Full Press Release

China Stocks TV Segment

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

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