Agoracom Blog Small-Cap Company Feature: Sancon Resources Recovery

Posted by AGORACOM at 9:30 AM on Friday, April 9th, 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.


Sancon Resources Recovery, Inc. (OTCBB:SRRY)

Srry - header

Sancon Resources Recovery, Inc. is an environmental service company specializes in the collection, processing, and selling of the reprocessed material such as plastic, metal, paper, cardboard, glass etc. The recycled materials are re-used by Sancon’s manufacturing clients to make a wide variety of new products that include: outdoor furniture, construction materials, building materials, packaging materials, and various other products.

On April 9th, 2010 the Company announced results for the fourth quarter and fiscal year ended December 31, 2009.

Check out the full details below!

Read Full Press Release

China Stocks TV Segment

Financial highlights of 2009 fiscal year are:

  • Revenue in 2009 grew 4% to $11 million from $10.57 million in 2008 due to the growth in our Waste Management Service. Revenue in 2007 was $4.78 million.
  • Gross profit decreased 13% to $5.17 million in 2009 from $5.91 million in 2008. Gross profit in 2007 was $1.4 million.
  • Gross margin decreased from 56% in 2008 to 47% in 2009 due to the increase of cost of revenue. This increase was related to the increase of transportation costs resulted from change of shipping method that required by the customers. Gross margin in 2007 was 29%.
  • EBITDA increased from $1.76 Million in 2008 to $2.32 million in 2009, due to effective cost control and reduction in outsourced activities.
  • Net income in 2009 was $2.09 million, or $0.09 per share, compared to $1.65 million, or $0.08 per share in the year ago period. Although our gross margin decreased, we gained higher net income in 2009. Our G&A expenses decreased substantially in 2009 compare to 2008.

YOUR RESEARCH STARTING POINTS FOR CHINESE SMALL CAP AND MID CAP COMPANIESWe’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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