Agoracom Blog

Chinese Small-Cap Company Feature: China BAK Battery

Posted by AGORACOM at 9:30 AM on Tuesday, April 27th, 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 BAK Battery (Nasdaq:CBAK)


China BAK Battery, Inc. is one of the world’s largest manufacturers of lithium-based battery cells as measured by production output. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.’s production facilities, located in Shenzhen and Tianjin, PRC.

On April 26th, the Company announced its financial results for the second quarter of fiscal year 2010 (“Q2 2010”).

Check out the full details below:

Read Full Press Release

Chinese Stocks TV Segment


— Revenues in Q2 2010 increased 23.5% year-over-year and 0.4% sequentially;

— Revenues from cylindrical cells used in notebook computers surged 65.0% to $13.4 million sequentially and were up 45.1% from same quarter of last year. China BAK now supplies three out of the six largest notebook OEM makers in the world;

— Revenues from high power batteries doubled in Q2 2010, due to increasing market demand for Electric Bicycles and Electric Vehicles;

— EBITDA increased 318.9% year over year to $6.2 million; Achieved $0.9 million in operating income;


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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