Agoracom Blog

Chinese Small-Cap Company Feature: China Housing & Land Development

Posted by AGORACOM at 9:30 AM on Monday, March 15th, 2010

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.


China Housing & Land Development (NASDAQ:CHLN)

Chln - header

Since 1992, China Housing & Land Development, Inc., is a leading developer of residential and commercial properties in northwest China. China Housing has been engaged in land acquisition, development, and management, including the sales of residential and commercial real estate properties through its wholly-owned subsidiary in China.

On November 11th 2009, the Company announced its unaudited financial results for the third quarter ended September 30, 2009.

Check out the full details below:

Read Full Press Release

Chinese Stocks TV Segment


— Total revenues increased 227% to $86.6 million from $26.5 million in
— Total gross floor area (“GFA”) sales were 145,529 sq. meters, compared
to 60,593 sq. meters in 2008, representing a 140% increase.
— Gross profit increased 374% to $23.7 million from $5.0 million in 2008.
Gross margin increased to 27.3% compared to 18.9% in 2008.
— SG&A expenses as a percentage of total revenue declined to 10.6% from
32.1% in 2008.
— Operating income was $8.5 million, compared to an operating loss of
($9.8 million) in 2008.
— Net income attributable to common shares decreased 71% to $2.5 million
from $8.8 million in 2008. Non-GAAP net income, which excluded a $7.6
million non-cash losses associated with the revaluation of derivatives
and warrants, was $10.1 million in 2009 compared to non-GAAP net income
of $0.8 million in 2008, which excluded a $8.1 million gain associated
with the revaluation of derivatives and warrants, representing a 14.6%
— Diluted net income per share attributable to common shareholders was
$0.08, compared to $0.28 in 2008. Excluding $0.24 of non-cash losses
associated with the revaluation of derivatives and warrants in 2009 and
$0.27 in non-cash gains in 2008, diluted earnings per share would have
been $0.32 and $0.03 for each respective period.


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

1. – 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.


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