Best China Micro-caps on the Market

[tiznow]

yeah think we can get the Q3 pop too

their growth rate q1 vs. q2 this year in their #1 seller after moving into 2 new provinces was huge and maybe they moved into others since than or had the whole quarter in those 2 vs. maybe just part of it in q2....anyway we'll see....

not a huge play but figured i'd nibble a bit

 

[PBMULE]

lpih & bpsm

Bought both this morning I hope the turn to the Upside GL guys.
LPIH 3000 @ 2.13
BSPM 5000 @ 2.50
Lets do this.
Thanks for the info

 

[kuwlness]

GCHT

Hit my $2.40 target. Sold 33% of my position. Will wait for a pull-back to buy more. Holding the rest to see what happens next Q.

 

[tanner12oz]

CHFI averaged at .82 may buy some more to lower the average....own a decent sized position already

 

[tanner12oz]

this is old but it may give some insight on the business model

1. China Finance (CHFI.OB Quote) was sold down 50% on record-breaking volume Monday while I was backing up the truck of bullishness. China Finance is responsible for helping small-to-medium Chinese enterprises go public in the United States. What makes this case unusual is China Finance's assets are highly liquid -- they could be sold in the market at the current price. Its largest position on Monday, Jade Art, was unchanged, its second-largest position, Gulf Resources, was up 8.3%, and its third-largest position, China Organic Agriculture, was up 6.9% on higher volume. It's not surprising that a company responsible for taking podunk Chinese companies public struggled through 2008. My estimates on this stock put it in 100-bagger territory from its 52-week low of 4 cents. China Finance also helped two of my other picks -- China 3C Group (CHCG.OB Quote) and Oriental Paper (OPAI.OB Quote). At 10 cents, China Finance is selling at less than its highly liquid securities, especially after you take into account their price appreciations since Dec. 31.

 

[kuwlness]

That looks awfully familiar. You mustve grabbed that from one of G. Bradford's articles. That guy is a China-investing Guru. He writes an article about a stock, it goes up 10-20% the next day, lol. Good thing is, I've already recommended just about every stock he likes. There's only a few on his lists that I dont recommend, and it's not because I dont like 'em, it's just because the upside isnt as great as others. Nice find nonetheless. I believe CHFI might still have a long ways to go, but am playing it safe and only holding a 10k position right now. I will add more if it starts to run over $1 again.

 

[tiznow]

think overall the little chinese guys may be showing signs of topping out with the overall equity markets as i've been warning

that's not to say some won't do well and buck the trend from here (hopefully BSPM and HQS do LOL)...but i think the fun of seeing everybody in this category ramp like mad since the bottom on equities in march may be running on fumes

 

[kuwlness]

think overall the little chinese guys may be showing signs of topping out with the overall equity markets as i've been warning

that's not to say some won't do well and buck the trend from here (hopefully BSPM and HQS do LOL)...but i think the fun of seeing everybody in this category ramp like mad since the bottom on equities in march may be running on fumes

Tiz my man, I do believe your bearishness will pay off next week, but it will be short-lived. The market is overdue for another 3-5% correction. It will happen, and it will likely happen next week IMO. We pull-back, then we keep marching higher thru the end of the year.

Regarding China stocks: To me, it doesnt matter how many percent a stock is up if it's still trading at a PE of less than 5. That signals to me, that people will eventually find these undervalued companies, and start buying them -- I just want to beat them to the punch. It may be their Q earnings or it may be a big announcement about an expansion that finally gives them the attention they deserve -- But, what it boils down to is they are under-valued and under-owned. Therefore, they have much higher to go.

Sure, these little guys will take a few hits over the head next week as the market corrects, but most will hold strong. The ones I believe will hold up the best next week are: ACLO, LPIH, CKGT, CNOA, BSPM, CHGS and probably a few others I cant recall off the top of my head.

Market corrects next week, down 3-5% for the week. The bull continues to run the following week (first week of Nov) and likely thru the end of the year with minor 3-5% pull-backs along the way. Bears are not in charge of the market and wont be until at least 2nd - 3rd Q of 2010. The market is toppy right now, hence the called for correction. But we will blow thru these "tops"/highs in November.

 

[tiznow]

who's still trading at less than 5 p/e? other than CNOA which had the litigation thing hanging over its head

and regardless there are still US traded issues so the overall equity markets do matter

and valuation can get depressed to very low valuations as we saw in march regardless of how cheap they are...especially in the BB space....and even outside of that

HQS which is on the AMEX...hit sub 4 back in oct 2008....with 4 bucks a share in cash...and zero debt....

as for just a correction on markets we shall see....but i'm very convinced this one coming up is on par with the oct 2007 top....where 2010 than becomes a super ugly year like 2008 was.....

 

[kuwlness]

who's still trading at less than 5 p/e? other than CNOA which had the litigation thing hanging over its head

You're right, I shouldve specified Forward PEs. We are practically in 2010 now and a lot of the companies reporting earnings in November will be for 1st Q 2010 as they're not on the calendar year. So, you have to start looking ahead and not at 2009 anymore. Companies are already beginning to trade at the correct multiples for 2010, look at some of the big American companies. This will trickle down to the China microcaps.

The majority of the companies I have recommended have plans of uplisting to the US exchanges in the next year as well, so their forward PE of 5 will be at least doubled.

As for HQS, I havent been following it for long, but I can tell you upside is minimal even if earnings are thru the roof. You're looking at an upside of maybe 25% tops. Too rich for my blood. If you're looking for some bigger stocks to play, you should check out YONG. Now that stock has $40 written all over it. Probably will take 2 years to get their, but that's an upside of 300% from today's close.

As for the correction affecting the China micros, you are correct here as well. I said they'll get beat up next week, just not as bad as one may think. The last two days have been ugly for China plays, so next week we might see another 10-15% correction in the China plays ... BUT, isnt that what everyone wants? Hell, I want just about all of them to have a 50% correction so I can re-buy them at a blue-light special discount. If every stock I recommend goes down for the rest of the year, I'd still be happy because I know I'll be making that much more money next year when they go back up.

How many stocks do you own that have gone up more than 100% and are still under-valued? Some of these have gone up 500-1000% and are still undervalued. You can throw evaluations, PEs, debt, cash-flow out the window, but in the end they are still going to be undervalued. Just like they were earlier this year, and in most cases, like they still are. These will go up, though, it's just a matter of time. And I'd rather own them now, before they start going up another 100-200%, rather then wait for a very large market correction to buy them -- especially considering this BIG Correction is not coming this year. So why not own them now?

If anything, Gold would be the thing I'd tell people to sell right now. When they pull the rug on gold, it'll be $850 in the blink of an eye. Watch, next week as the market corrects, the dollar will get its overdue bounce, which means Gold will be heading down, just like the rest of the market. I just hope Gold is able to hold $990; otherwise, you'll see $920 within a few weeks, followed quickly by $850. The door is much smaller on the way out, and everyone is buying gold, just like everyone is shorting the US dollar. Both are over-crowded and overdue for a correction. Dollar up, Gold down, stock markets down. Rally continues first week of November ... as for gold, I do believe it's had its run and it's about to get the BIG correction you think is going to happen in the stock market. You just mixed the two up

 

[tiznow]

gold doing its typical oct-early next year ramp

gold fun will be over around march

as long as 1000 holds no worries....likely will consolidate if we get a near term dollar move and equity downdraft....was only down a few bucks today

i agree the gold trade a bit crowded...but things can keep running a bit longer than you think....see oil run to 146...LOL......any long term positions being taken now will be useless long term IMO on the gold side....only should be in it for a quick trade at this point....after this ramp is over likely will correct back to the 1000 area along with everything else getting smashed......and the miners especially hit hard again....

anyway i've said it a thousand times but we in the transition....from inflation to deflationary worries....like we were in from late 2007-early 2008

oil gold ramped, dollar continued decline, and equities started its decline (from oct 2007 to early/mid 2008)...than 2nd half of year every got smoked

will just take time to see if a simliar thing occurs from now through 2010 as i think it will

 

[kuwlness]

Asian markets rallying on our sell-off. Not a typical sight. Regardless, I suggest everyone take advantage of this reaction and sell profitable stocks so you have at least 5% Cash (but no more than 10%) in your account by EOD (end of day) Monday. Save that cash and use it on Thursday/Friday. I have a feeling this week is gonna be rocky and we're gonna have a real show-down between the Bulls and the Bears.

Both have strong cases, but too much money is on the sidelines still, and it's a race for performance from now 'til the end of year. The Bulls have a stronger case, and will prevail IMO. Dont be fooled by the mis-direction this market can give.

 

[kuwlness]

ACLO


This tidbit from today's WSJ sounds good for the company...

"While property prices in much of the rest of the world continue to languish, prices in traditionally volatile Hong Kong have been on a tear this year, thanks in large part to low interest rates and a wave of liquidity from mainland China, where Beijing last year unleashed a four-trillion-yuan (US$585.6 billion) stimulus. Economists attribute much of Hong Kong's property run-up to mainland Chinese, and developers say that mainland Chinese customers now account for as much as 40% of new home sales."

This is great news for ACLO because the company took an $883K write-down in Q4'08. This "unrealized loss on revaluation of the Company’s real property assets was due to the property market downturn caused by recent economic conditions. The real properties which the Company owns are exclusively properties in Hong Kong. The Company believes that losses in values of its real property assets may be recovered in 2009."

If, as now appears likely, last year's Q4 "unrealized loss on revaluation" is reversed in this year's Q4, it could add EPS of $.03 to what is shaping up to be a very strong quarter already...


Be ready, this is gonna shoot higher very soon. Some are concerned the gap around .60 in the chart needs to be filled. I'm not. I have buy orders in at .61, .62, and .63 just in case the MMs feel the need to fill that gap, I want those cheap shares. If they try to fill the gap, it will be a one-day deal and close in the .80s as it almost always does.

This is gonna make a move over $1 and on to $1.50 near-term IMO.

 

[kuwlness]

XNYH

Agricultural Bank of China Holds Nationwide Bidding Invitation for 2010

HARBIN, China, Oct. 26 /PRNewswire-Asia-FirstCall/ -- On September 14, 2009, the Agricultural Bank of China (ABC) held a nationwide bidding for the production plan of 2010. After passing strict evaluations, Harbin Golden Sea Technology Printing Co, Ltd., a subsidiary of Xinyinhai Technology (OTC Bulletin Board: XNYH - News), successfully won the bid.

Continued here: http://finance.yahoo.com/news/Agricultural-Bank-of-China-prnews-4110396392.html?x=0&.v=86

 

[bbm]

kuwl, chio down again on no news, you think shes settin up for a run again...?? Maybe add alittle more down here...??

 

[kuwlness]

kuwl, chio down again on no news, you think shes settin up for a run again...?? Maybe add alittle more down here...??

CHIO has been tough to play, and even harder to hold. Very impatient sellers and they are wrecklessly taking it down. Nothing much you can do but hold. These China stocks aren't one-day wonders. They move, consolidate and move up on the next catalyst. At this point, I'd say we're better off holding and waiting for some confirmation or update from management. Not worth it to add right now, just hold. Still looking for at least $2. Wont be selling until we get there.

 

[kuwlness]

GCHT

Sold 80% of my remaining position. Running a bit too fast for me. Becoming fairly priced, maybe more so. Might still have legs, but not gonna get greedy on this one.

 

[kuwlness]

CMTP

Re-added. Oversold. Gap is filled in the chart. Should bounce back nicely. Looking for at least $10. Name-change to be announced soon. Uplisting in coming months as well. Lots of upside, not much downside.

 

[bbm]

kuwl, thanks for the word on CHIO, but what about BSPM, im already in it, thought this might be a good point to pick up some more.. or do you think the market is going to drive some of these lower and later in the week will be a better oportunity for alot of these china plays...what do you think..??

 

[kuwlness]

kuwl, thanks for the word on CHIO, but what about BSPM, im already in it, thought this might be a good point to pick up some more.. or do you think the market is going to drive some of these lower and later in the week will be a better oportunity for alot of these china plays...what do you think..??

Yep, this market is very forgiving and it often gives you multiple chances to buy more shares. I bought another 500 shares of BSPM today in the low $2.40s. This is my biggest holding, followed quickly by CNOA, and CKGT. I loaded up a bunch of the $1.80s in CKGT, crazy low-volume sell-off. This will be back to $2.20 in coming days IMO. CHIO is the only no-buy/no-sell for me.