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 Yida Holding Co. (NASDAQ:CNYD)
China Yida Holding Co. is a leading diversified entertainment enterprise focused on China’s fast-growing media and tourism industries and headquartered in Fuzhou City, Fujian province of China. The Company’s media business provides operations management services; including channel, column and advertisement management for television station, presently the Fujian Education Television Station.
On March 23rd, Yida nnounced financial results for the fourth quarter and fiscal year ended December 31, 2009.
Check out the full details below:
HIGHLIGHTS
Fourth Quarter 2009 Highlights
— Total net revenue increased 58.1% to $14.5 million, compared to $9.2
million in the fourth quarter of 2008
— Net revenue from the tourism business increased 112.5% year over year
to $6.0 million, with a gross margin of 60.2%
— Net revenue from the media business increased 34.2% year over year to
$8.5 million, with a gross margin of 91.1%
— Gross profit grew 61.7% to $11.4 million, compared to $7.0 million in
the same period last year
— Operating income grew 97.9% to $9.6 million, compared to $4.9 million
in the fourth quarter of 2008
— Net income increased 27.5% to $5.9 million, compared to $4.7 million in
the same period last year
— Fully diluted EPS was $0.34 per share, compared to $0.27 in the fourth
quarter of 2008
Full Year 2009 Highlights
— Total net revenue increased 67.4% to $51.2 million, compared to $30.6
million in 2008
— Net revenue from the tourism business increased 170.7% year over year
to $20.0 million, with a gross margin of 79.5%
— Net revenue from the media business increased 35.2% year over year to
$31.5 million, with a gross margin of 79.2%
— Gross profit grew 77.4% to $40.6 million, compared to $22.9 million in
2008
— Operating income grew 81.1% to $34.4 million, compared to $19.0 million
in 2008
— Net income increased 39.4% to $25.5 million, compared to $18.3 million
in 2008
— Fully diluted EPS was $1.47 per share, compared to $1.27 in 2008
— Re-opened Hua’An Tulou Cluster including Shangping Tulou
— Entered into a six-year exclusive agreement with China’s Railway Media
Center to create “Journey through China on the Train” infomercial
programs
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