Its earnings season for everyone but China Vesting is going to focus on China Carbon
Graphite (CHGI) and China Shandong (CSNH)
has been a huge week for all public companies most of
which run on a calendar fiscal year. For the most
part, Chinese companies trading on U.S. exchanges have been printing
RMB and seeing nice bumps in their stock prices. China
Vesting will update readers on two such companies in just a little bit.
First...let's take a look at the latest "victim", RINO International Corporation
(RINO). RINO has been featured in a hugely
negative report by Muddy Waters
Research...this is the same outfit that took Orient Paper (ONP),
another member of the China
Vesting Index, to the woodshed. Shareholders of
RINO have been running for the hills...look at RINO's chart below:
U-G-L-Y is all we can think of... although shareholders of
RINO probably have other four letter words in mind. China
Vesting has focused on the issue of
Is Making China Stocks Sick" in a previous edition, this is a
good refresher for people investing in the China space to spend some
time reading. On to the good stuff...
China Carbon Graphite (CHGI) Reports Doubling of Net Income
China Vesting's most recent stock pick, China Carbon Graphite (CHGI)
has been on fire gaining as much as 17% since
November 11th. Now we feel smart for not waiting for a pull
back. Let's just hope today's update doesn't jinx the stock.
The company just reported third quarter results (press
release) that were way above what anyone could've expected.
The stock has traded up accordingly and is fighting to get
over its 200 day moving average (DMA) resistance of $1.09 per share.
For a link to China Vesting's full write up on China Carbon Graphite (click
Third Quarter 2010 Highlights
- Revenue was $9,979,707, up 78.8% from the same quarter of
- Gross profit was $2,474,084, up 62.2% from the third
quarter of 2009 with gross margin of 24.8%, slightly decreased 2.5%
from 27.3% for the third quarter of 2009.
- Net income was $1,900,563, an increase of $965,298 or 100%
from the third quarter 2009, and earnings per diluted share were $0.09
based on 21,435,161 shares
It looks like things are finally turning around at CHGI and perhaps
some of those nuclear plant contracts will come in before the end of
China Shandong (CSNH) Increases Net Income 74.8%
What happens when a company
continually grows its revenues and earnings while at the same time
NEVER issuing a press release? China Shandong (CSNH)
is what you get! China Vesting first added CSNH to the Dragon Undervalued Index
on April 16th. This wicker furniture maker then proceeded to
suck the winds right out of shareholders sails by not issuing any press
releases for what seems like the rest of the year.
China Shandong recently announced third quarter 2010 results that were
fantastic....yet no PR...no SHAREHOLDER COMMUNICATIONS...(maybe we need
to say this in Chinese).
- Revenues for the three and nine months ended September 30,
2010 were $22,746,574 and $62,181,727, representing an
increase of $8,021,462 or 54.5%, and $15,980,610 or 34.6%, compared to
revenues of $14,725,112 and $46,201,117 for the comparative periods
ended September 30, 2009.
- Net income for three and nine months ended September 30,
2010 was approximately $4,008,460 and $10,286,442, respectively, an
increase of approximately $1,715,854 or 74.8%, and by $2,870,117 or
38.7%, compared to net income of approximately $2,292,606 and
$7,416,325 for the same periods ended September 30, 2009.
Look at the results above and now look at the stock chart below:
If there are any IR professionals reading this...CALL the
company now because they clearly need some sort of help. There
are 12,865,013 shares outstanding and based on $4.50 per share the
market capitalization is $57.89 million. With three quarters out
the way and net income at $10 million let's assume 2010 yields total
net income of $14 million. That puts the current PE at 4.13 for a
company growing like gangbusters....oh and if the stock price holds
CSNH is going to the Nasdaq Exchange which should prove to be another