AGORACOM Small-cap Investor Relations Blog

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 Insonline Corp (NASDAQ:CHIO)

China INSOnline Corp., incorporated in Delaware and headquartered in Beijing, is a rapidly growing licensed insurance agency in The People’s Republic of China. Representing major insurance underwriting firms in China, the Company offers online automobile, property and life insurance services through its industry web portal, www.soobao.cn.

On October 14th 2009, the Company announced reported that net revenues advanced 31% to $17,976,529 from $13,735,376 in prior year.

Check out the full details below:

Read Full Press Release

Chinese Stocks TV Segment

HIGHLIGHTS

• Net revenues advanced 31% to $17,976,529 from $13,735,376
• Net income grew 10% to $9,177,601 compared with $8,336,357 in the prior fiscal year
• Earnings per share for the year ended June 30, 2009 were $0.23 on 40,000,000 weighted average shares
• Trading at $1.00 at time of report on Chinese Stocks TV.

MY COMMENTS:

Unless I am missing something, this Chinese stock is a no brainer.  Top line growth, hefty profit margins ($9.1M income on $17.97M in revenue) and – best of all – EPS of $0.23 for a company trading at just $1.00.  At 4X earnings, this stock is cheap.

I also love the company’s product line.  A mix of Web 2.0 and insurance.  That’s a winning combination for a company growing in China and has all the makings of a long-term winner!

As always, these are my own views and conclusions.  Do your own due diligence.  I know this is one company that would benefit from online investor relations.

If you have any comments, I’d love to see them below.

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. Chinse 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

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

e-Future Information Technology (NASDAQ:EFUT)

About eFuture Information Technology Inc.

eFuture Information Technology Inc  is a leading provider of software and services in China’s rapidly growing retail and consumer goods industries. eFuture provides integrated software and services to manufacturers, distributors, wholesalers, logistics companies and retailers in China’s front- end supply chain(from factory to consumer) market, especially in the retail and fast moving consumer goods industries. eFuture currently serves over 15 Fortune 500 companies, over 1,000 retailers and over 5,000 suppliers operating in China.  On October 13th 2009, the Company announced its financial results for the full year ended December 31, 2008.

Check out the full details below!

Read Full Press Release

China Stocks TV Segment

HIGHLIGHTS

• Total revenues increased 64.7% year-over-year to  US$20.5 million
• Gross profit increased 49.7% year-over-year toUS$8.5 million
• Gross margin was 41.3%, compared to 45.4% in 2007.
• Adjusted net income (non-GAAP) was US$2.3 million, an increase of 315.9% from 2007.

MY COMMENTS:

The company had some accounting problems that forced them to re-audit the books.  This beat up the stock pretty good.  However, now that the clean up is done, you may have a great re-entry point here.   I especially like the fact the company is providing revenue guidance for $28 – $29 million for fiscal 2009 – that would be an increase of 40 – 45% over 2008 revenues of $20.5 million.

I also love the level of commercial acceptance achieved by eFuture.  Specifically, eFuture currently serves over 15 Fortune 500 companies, over 1,000 retailers and over 5,000 suppliers operating in China.  That’s pretty damn good.

If you have any comments, I’d love to see them below.

This is a company I would love to provide online investor relations to.

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. Chinse 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