Thursday, October 4, 2007

Update on Harbin Electric (HRBN)

Harbin Electric had an excellent presentation at William Blair & Company on October 3rd. Please listen to it here: http://www.wsw.com/webcast/blair9/hrbn/

You can see slides there as well. Presentation is long (30 minutes), but really good...Definitely the best to date..

Few highlights from the presentation:



  • Projected revenues for 2010 are $350M. That compares with just $40 mil in 2006. (that's nearly 9 times higher from current levels)

  • Started shipping products to one of the "Big 3" auto manufacturers in US.

  • New facility in Shanghai will open in Q2 2008. Will increase micro-motor units production from 2.4 million currently to 10 million once built.

  • Margins consistently stay above 45% and will continue to stay that way, while industry standard is high teens up to 20%..

  • The only Chinese manufacturer in its sector that owns a number of patents for its motors and system designs

  • The first and only Chinese company that has received contracts from the government to develop a linear motor system for building an urban mass transportation infrastructure domestically

  • Currently the only Chinese manufacturer producing linear motors for blue chip US Companies

  • Tax rate: 0% thru 2007, only 7.5% in 2008-2010

  • Established representative office in US for business development



Overall, great presentation. Worth listening to...

Even though the stock has reached new all time high levels recently, it's still not getting the volume. I expect the stock to appreciate to much higher levels from here in the long run.
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