Best China Micro-caps on the Market

[kuwlness]

$CPQQ -- Lets assume the following:

* 2009 revenues will reach $20 million. ($11 million for the last six months).
* Raw material costs will remain stable.
* Sales prices of products will remain stable.
* Current pre-tax margins will remain at 26%.
* Outstanding shares for the next six months will increase to 19.4 million (14.9M + 4.5M)
* Capacity expansion will be complete in first half of 2010.
* Company will raise $5 million by issuing 3.3 million shares to fund capacity expansion.
* 2010 Outstanding shares will increase to 22.7 million
* Revenues will eventually reach $60 million with new capacity. (200% increase)

These assumptions would translate into a 2009 tax-adjusted EPS figure of approximately $0.20 and an eventual EPS figure of $0.44 at full capacity.

 

[kuwlness]

$PFGY -- people starting to realize they sold a winner, now they're buying it back ... hope everyone held strong.


$CPQQ -- Full-out blessing to continue buying. It may fall a little more, wont go below a dollar though. Seems like a big seller has come out of the woods and is trying to raise some money. He should be gone soon. If it hits $1, then you really want to load the boat, it'll had back to $1.50 in no time once this seller is done.

$CHIO -- big seller still lingering apparently, will make it's move sooner or later. He doesnt want to sell below $1 apparently. Patience is key.

$CKGT -- doing a little consolidating still. I would not sell at these prices, you will easily be able to get at least $3 in the future. Hold strong, and let the flippers get out. Should be a catalyst soon -- thinking a big announcement from the R&R conference or possibly a big institution that they convinced to invest in their company. Hold strong!

$CSGH -- testing of their new technology should be completed any day now. This is gonna be a huge announcement and not many retail investors are aware of this. Apparently theyre happy with a little 30% run, I'm not. Looking for $2 near-term after the big announcement, maybe even $2.50. Hold strong.

 

[FadeMeToWin]

there is NO volume on PFGY today.

 

[DeathEatsaCracker]

kuwlness, have you taken a look at KERX?

 

[kuwlness]

there is NO volume on PFGY today.

The MMs had increased the ask price from where it was yesterday, I didnt notice there wasnt any volume, just assumed people were buying since it closed yesterday with a bid/ask @ .26 x .29 ... earlier it was .28 x .30, so I assumed someone had been buying ... my bad

 

[kuwlness]

kuwlness, have you taken a look at KERX?

Nope, anything special about it? Looking at the chart, I'd wait to buy-in around $1.85 or so, maybe a little less. Had some big interest last few days, once volume dies down a bit, it'll prob drop under $2, then you should start adding in increments if you've done DD and it's a sound investment. I'm sticking with my China Pharma plays, got enough of them as it is (CYXN, LTUS, and I guess you could add CKGT to that category as well).


But, the brief amount of effort I just put into it, I would tell you I already like CHME much better, and it's at a bottom that's held forever. A pop is coming sooner than later, and you'll be in before the pop ... unlike KERX where you're getting in after the Pop. Keep us posted and let us know what you end up doing.

 

[kuwlness]

From yesterday, but still important, just forgot to post it:


$PUDZ

Puda Coal to Begin Trading on NYSE Amex on September 22, 2009
New ticker: PUDA (again, yay! ... hated the PUDZ ticker)

 

[kuwlness]

RE-Add CVM ... HURRY!!!


CEL-SCI's CEO Says H1N1 Flu Drug Candidate Could Propel Company Onto World Stage

# Source: BiomedReports.Com
# On Friday September 18, 2009, 2:40 pm EDT

http://finance.yahoo.com/news/CELSCIs-CEO-Says-H1N1-Flu-iw-4278005024.html?x=0&.v=1

 

[kuwlness]

Bought more $CPQQ


I have no clue why folks are throwing money in the street.

I have no problem picking it up : )

The in the money warrants are probably selling right now and I cant blame them. They waited long enough.

That gives the false impression of what is really happening.

CPQQ will pop right back up significantly.

This is a special situation stock right now.

 

[FadeMeToWin]

From yesterday, but still important, just forgot to post it:


$PUDZ

Puda Coal to Begin Trading on NYSE Amex on September 22, 2009
New ticker: PUDA (again, yay! ... hated the PUDZ ticker)

is this tibit of news the reason it ran up nearly $1 today?

 

[kuwlness]

is this tibit of news the reason it ran up nearly $1 today?

Lol, yessir. She'll probably run to $8 between now and next Friday, that would be my guess. She ran to $8 right after the R/S, then came crashing down like a brick from a 10-story window. I loaded the boat in the low $4s, it did a head-fake up to $5.10 or so, then crashed back down to the low $4s where it's been dancing around for a while. Today's announcement was the first of two announcements everyone was waiting for. The other is a mine consolidation deal that's been pending with the PRC (People's Republic of China) for quite some time now. If that news hits soon, it will probably run to $10-$12.

(gosh, these PPS are ridiculous arent they, lol)


Ohh, and they're changing their ticker back to PUDA (which is what it was before the R/S). People will like investing in PUDA rather than Putts, lol.


PUDA ==> $8-12 by year's end. (Lame Flamer should love this!)

 

[kuwlness]

$CPQQ qualifies as a classic "special situation" stock this week:


From all accounts CPQQ sold off from a high of 2.00 bucks to a low of 1.00 as of Friday.

It appears that "in the money" warrants kicked in when the stock shot up and major selling of those warrants knocked the stock price down on big selling all week. Looks like the selling is done or about done. The stock has every reason to bounce back strongly. Look at Friday's action -- 1 million shares traded and the stock was down only a few pennies. A lot of folks want to own this stock.


My point? CPQQ is a tremendous buy right here from all appearances. The company is growing in a big way and its profile is way up in recent weeks. The cash from converted warrants also adds cash to the bottom line as well. If the big selling is done here, we can expect a quick move back upward in short-order.



Also, be patient with $CHIO i know it's been frustrating, but these China Micro-caps are Investments, not short-term trades. From what I've heard, the PPS is unable to move up at this time due to dillution -- word is, this is dillution from the company to allow for expansion, this is the best kind of dillution. I even have a post-it on my monitor reminding me not to sell it for any reason, lol. This is moving up the list of under-valued China Micro-Caps in my eyes and has recently become my largest position. I recommend you leave in an open limit buy order around .98 (98 cents) since it tends to dip under $1 occassionally throughout the day. When this big seller is gone, this will make a move in a big way -- check my original post about CHIO for my reasoning.

 

[kuwlness]

$CPQQ -- more reasons to buy:


Results should only get better based on CEO's statements, from the June 30 press release:

"Mr. Song went on to say, "However, the strong demand within China for energy efficient products has also prompted Hitachi Metals Japan, our main supplier of the amorphous strips used in our cores, to expand its production capacity, which has, in turn, resulted in a significant reduction in our raw material costs. This decrease in the price of one of our key raw materials, combined with continual improvement in productivity and increased sales, should start to be reflected in the Company's financial results toward the end of this year."
http://ih.advfn.com/p.php?pid=nmona&cb=1253575923&article=38436518&symbol=NB%5ECPQQ


That's a pretty damn positive forward statement -- as is this from the last quarterly filing:

"We are quite pleased with the Company's performance during the second quarter. The improved results reflect the investment we have made in our product line and sales effort. We expect these trends will continue as China's economy continues to expand, and with it, the demand for efficient, clean transfer of energy. We look forward to building on the strong foundation we have built with many of the regional utilities and government agencies as they continue to increase and improve China's power grid."
http://ih.advfn.com/p.php?pid=nmona&cb=1253575873&article=39091591&symbol=NB%5ECPQQ

 

[kuwlness]

$CHIO -- They report 10-K in a week.


They've had 70% revenue growth over the last 6 months in a terrible economy -- so I think they'll have a good report with positive guidance. And maybe they'll shed some light on their big expansion plans which they've never pr'd but show in the last filing.

It's these expansion plans that I think explain the selling pressure in the stock over the last few weeks- selling shares to raise funds for cash expansion. CHIO's history so far has been expansion through cash, not debt.


Nationwide Marketing Network Construction Plan

To carry out insurance sales more effectively and to supplement the function and effect of www.soobao.cn, ZYTX is in the process of constructing a comprehensive chain insurance supermarket entity whereby the Company intends to establish branch sales agency locations in key cities throughout China in the form of a purchase or franchisee, and strive to establish a nationwide insurance marketing network system. ZYTX plans to set up subsidiaries and branches in every province and major city across China, provide prospective clients with a series of services such as one-to-one advisory on different products offered by different insurance companies, examination of life insurance, insurance site-sales, compensation and appreciation and claims settlement. As there will likely be many specialized clients in the transaction market, the Company plans to organize professional lectures on insurance, create an industry salon and release new products and services. It is our goal through such entity to (a) educate consumers with respect to insurance and insurance products, (b) provide objective and impartial information on each of the company’s products, (c) offer personalized insurance programs to consumers, (d) offer after-sale one-stop compensation services including improved efficiency with claims settlements and (e) offer exposure to www.soobao.cn and enjoy the network value-added services which are not offered through more traditional insurance consumption.

 

[punter]

I still own many stocks from your original list, they have done well. Do you have any updates?
China Plays:
CAEI ***
CCGY ****
CHCG ****
CHFI ***/*
CHGI ***/*
CHGY ***/*
CKGT *****
CMTP *****
CNOA ****
CPHI ***
GHII ***
JADA ***
LLFH *****
LPIH *****
LTUS *****
MYST *****
OPAI ****
PUDZ *****
SCLX ****

 

[kuwlness]

I still own many stocks from your original list, they have done well. Do you have any updates?

I have minimized most of my SCLX position, but I still believe it will outperform the market as a whole over the next few years -- I just wasnt impressed by their Rodman & Renshaw presentation. CAEI has had some institutional dumping occuring, as soon as that's done, it'll move up to $2.50 in short order. All of them are long-term holds and I would recommend keeping positions in all of them. Most will give you returns in the range of 200-500% over the next 2-5 years, but probably sooner.

 

[kuwlness]

What Nasdaq-listed stock has a trailing PE under 5 ...

With 30-50% revenue growth over the last 6 months in China ...

Projected 30% organic growth going forward ...

Current ratio of 2 and zero long-term debt ...

A propensity to expand operations through cash acquisitions ...

Online traffic up 70% in the last 3 months ...

A chart strongly suggestive that the company is selling shares to raise cash for another acquisition or expansion ...

And due to report 10-k next week?


$CHIO


Yep - big selling going on. The question is who is selling? Their merger was clean withoug a ton of shell sellers. No insider sales/form 4 filings. The company is cash flow positive, has no long-term debt, and managable current liabilities with a current ratio of 2.

And I doubt they'll take it below $1 for too long and put their Nasdaq listing in jeopardy. So, buying here looks like a pretty good bet IMO -- even with a chart that screams stay away!

 

[kuwlness]

The Seven Reasons Why You Should be Bullish on China ...


1 of every 5 people in the world live there

100 cities with over 1 million people (only 9 in the U.S.)

300 million people under age 14 representing future consumers who want a standard of living similar to that of Western societies

#1 market for mobile phones with 461 million users (larger than the entire U.S. population)

#2 market for Internet users at 137 million, and growing despite pervasive censorship

GDP growth average 9.37% per year for the last 25 years running

A central government committed to lifting the masses to a consumption driven middle and upper class status in one generation

 

[tiznow]

i'd start to be careful on these chinese microcaps

they arose from the dead in a huge way since march along with the equity markets

and really starting to look like the overall market rally is finally done

 

[kuwlness]

i'd start to be careful on these chinese microcaps

they arose from the dead in a huge way since march along with the equity markets

and really starting to look like the overall market rally is finally done

I know what you mean, but most of them were beat-down unjustly and need to recover since they operate in an economy that was never truly in a recession and that economy is still growing exponentially -- cant say that about the US, especially about our GDP. One thing to remember is, investors will go to value plays like these China Microcaps because they'll feel safer if they're expecting a big market correction. Very few of the China microcaps are down today more than a few cents (less than 1%), some are even up, which shows this theory holds water. The US market can correct all it wants from its over-bought condition, it wont affect the microcaps much IMO.