Undiscovered Stocks

Summary on SRRY.OB

2008-08-26T08:53:00.002-05:00

As a quick update on the blog - summary on SRRY.OB:

What they do

Sancon Resources Recovery, Inc. is an environmental service and waste management
company that operates recycling facilities in China and Australia. Sancon
specializes in the collection and recovery of industrial and commercial solid
wastes such as plastic, paper, cardboard, and glass. The recycled materials are
re-used by Sancon's manufacturing customers in China to make a wide variety of
new products including outdoor furniture, construction materials, building
materials, road surface, and various new products. Sancon's China operation is
licensed by the Chinese government for waste management services, and is
certified with ISO 9001 and ISO14001 standards. Sancon currently ships more than
25,000 tons of recycled industrial and commercial waste material annually to its
customers in China. Sancon's main operations and services include industrial
waste management consulting, collection and reprocess of recyclable materials
such as plastic, glass, cardboard, and paper sourced from suppliers such as
Hella, Toyota, Full Views, Wastech Holdings, Supagas, and Priority etc, before
its re-entry into manufacture cycles as raw materials. Sancon also provides its
full waste management services to large consumer products maker such as Pernod
Ricard. The use of recycled material is both environmentally friendly and is a
key part of today's competitive manufacturing process to lower costs. As China
gains global manufacturing dominance and oil price soars, Chinese manufacturers
are increasingly turning to recycled materials to lower its costs, resulting
tremendous demand for recycled materials import. The major customers for Sancon
are Chinese manufacturers and recycled material traders which are located mainly
in the Chinese provinces of Guangdong, Zhejiang, Fujian and Hong Kong.

Sales

Sales are generated by service charges and the sale of recyclable materials. The
sales in Q2 2008 were $2,940,268, representing a 251% increase compared to the
sales of $838,658 in same period of 2007. The sharp increases were mainly due to
the significant sales amount contributed from Sancon SH and CS, which started
their operation in Q3 2007 and Q1 2008. On August 15, 2007, the Company
completed the acquisition of 70% of the equity interest in Sancon Resources
Recovery (Shanghai) Co., Ltd by exercising its option to convert $200,000 of
convertible promissory note. On November 17, 2006, the company completed the
acquisition of 100% equity interest in Crossover Solutions Inc from Fintel Group
by paying $1 for the transfer of one share of Crossover Solutions Inc. being the
total number of outstanding share of Crossover. Crossover did not have any
operations or assets/liability prior to 2008. The both companies are engaged in
recycling material trading business. And sales for six months ended on June 30
for the year 2008 and 2007 were $5,889,264 and $1,531,706 respectively.

Financials

- O/S = 21.7 mil
- Market cap roughly 12 mil
- 6 months sales = 5.8 mil
- Margins increased from 17.9% in 2Q 2007 to 46.2% in 2Q 2008
- Gross profit increased to $2.87 million in the 2008 six months compared to $0.31 million in the year-earlier period
- 2008 net income for the first six months was $1.03 million, or $0.05 per diluted share, compared to a loss of $(0.22) million, or a loss of $(0.01) per share in the year ago period

Business Outlook

The Company expects to generate 2008 revenue of between $11 million and $12 million and net income between $2 million and $2.1 million and $0.09 to $0.1 per share

“We are pleased that we have achieved another profitable quarter, while positioning the Company for growth throughout 2008 and 2009,” said Jack Chen, Sancon’s Chief Executive Officer. “The recent announcement that we have been selected by the largest personal computer manufacturer in China to collect and process waste materials reflects the growing recognition in China of the importance of recycling. Companies are increasingly embracing these initiatives, endorsed by the Chinese government, to become more environmentally responsible. We have been positioning Sancon to benefit from these trends by investing in technology and recycling plants and depots to support growth in new Chinese cities.”

Links

http://biz.yahoo.com/bw/080818/20080818005365.html?.v=1

http://www.sec.gov/Archives/edgar/data/1288195/000101968708003728/sancon_10q-063008.txt

Storm approaching...

2008-08-18T20:27:00.002-05:00

Tropical Storm Fay is approaching Florida, where I'm residing, but I'm really talking about the market here... :) It's nice to have a job of a weather forecaster. I love how they are saying: "There is an over 50% chance of Fay becoming a hurricane", which could pretty much mean there is 51% chance it'll be a hurricane, and 49% chance it will stay a Tropical Storm. Let's apply this to the market - "There is an over 50% chance of DOW closing positive tomorrow" :)

We've been seeing lots of +200 / -200 DOW swings in the past few weeks, but after all dust is settled, we are still trading in the same range. So, where do we go from here? I haven't changed my mind yet. Still believe we'll see 13k by late Sept / Oct, so I see a "big storm" coming into the market in the next few weeks, but I think this storm will be a disaster for the shorts. Shanghai market went below 2500, but judging how it's selling off, it seems like a capitulation is almost here...You rarely see 60% pullback on anything that went up, but here we are talking about pretty strong economy. All statistics point to a nice recovery in the next 6-9 months.

Now, back to our undiscovered stocks, as there have been plenty of news last week:

HRBN (Harbin Electric) - earnings were great. Conference call wasn't that great. I think they should work on the conference call a little better, as some of the explanation provided wasn't understood correctly by many. Anyways, stock did not give back its gains, instead continued its slow move. It was nice to see it work through $16.00-16.25 resistance. Chart still looks great. There are other resistances on the way - $17,00, $17.72... Nothing changed in the long term of the company. They just confirmed that the long term look very bright here.

AFAM (Almost Family) - did what I expected - dropped huge on simple profit taking one day. It deservers a 50/50 weather forecaster statement right now, as it's hard to predict what will happen now. Profit was made, off to the next play. No more updates on this one.

TXIC (Tongxin International) - still nothing to see here, except it it seems that IR is starting to inform the public a little more. Telling us when the earnings were going to be released is a start. China Auto Market has slowed down a bit, but still strong, and nothing compared to US market.

YTEC (Yucheng Technologies) - nice gain from $11's to mid $14's, but the "buy rumor, sell news" took its toll. I actually didn't have a chance to go over earnings today. Will analyze later to see if it's worth getting back in any time soon.

MAQ / MAQ+ (now GSL / GSL+) - completed its merger resulting in a nice gain for the warrants from around $1 all the way to $1.60. This was somewhat risky play, as you deal with warrants, where you can lose all your investment if merger doesn't happen, but the merger was nearly 100% guaranteed. Still keep an eye on this stock and warrant, as the resulting company is very interesting.

Similar type of play is happening now in FMGQ.OB / FMGQW.OB - another interesting merger, which most likely will happen as well judging by today's PR ( http://biz.yahoo.com/bw/080818/20080818005595.html?.v=1 ) , resulting in a nice gain for the warrants, as the strike price is $6.00 (so, it might get to $1.50-1.60 sometime after the merger). Once again - very risky play. Only play with warrants if you are ready to lose your entire investment in them.

Another new stock:

Few weeks ago I briefly mentioned a new stock to watch - SRRY.OB.
I believe this one may appreciate nicely in upcoming months.
Take a look at this latest earnings release:

http://biz.yahoo.com/bw/080818/20080818005365.html?.v=1

This company is a rapidly growing environmental services and waste recycling company, with operations in both China and Australia. And China Operations are growing at a very nice pace. Just look at this revenue numbers: "The Company generated record 2008 second quarter revenue of $2.94 million, a 251% increase compared to $0.84 million in the 2007 second quarter". This is despite some shutdowns due to the earthquake.

Gross Margin increased significantly (from 20% to 48%). Finally:
"2008 net income for the first six months was $1.03 million, or $0.05 per diluted share, compared to a loss of $(0.22) million, or a loss of $(0.01) per share in the year ago period. The Company expects to generate 2008 revenue of between $11 million and $12 million and net income between $2 million and $2.1 million and $0.09 to $0.1 per share."

Basically, they are trading at PE of 5 right now. $1 is not out of the question here for the short term. Long term - who knows how far they can take it with this phenomenal growth. More to come on this stock.....

That's it for today. Off to watch the weather forecasts :)

Earnings and more

2008-08-10T18:28:00.002-05:00

It's earnings time this week.

Harbin Electric (HRBN) is going to have a conference call and PR on earnings early Monday morning, but they already released 10Q Friday after hours.

The numbers look great! They beat on both revenues and net income. Margins are still nicely above 48%.

Six months results:

"For the six-month period ended June 30, 2008, we generated net revenues of $46.42 million compared to $27.62 million for the six-month period ended June 30, 2007, representing a 68% year-over-year growth. Linear motors and related integrated application systems contributed 44% to total revenues, automobile specialty micro-motors contributed 38%, and controllers, armatures, and other special motors contributed 18% compared to 76%, 0%, and 24%, respectively, for the six months ended June 30, 2007. "

"Net Income for the six months ended June 30, 2008 was $11.58 million compared to $7.96 million for the six months ended June 3, 2007, representing a year-over-year increase of 46%. This increase in net income was mainly due to new sales driven primarily by automobile micro-motor business and the tower-type permanent magnetic linear motor oil pumps. Earnings per diluted share grew 36% from $0.42 in the six months ended June 30, 2008 to $0.58 in the six months ended June 30, 2007. The income tax that the Company began to pay on earnings has resulted in a significant reduction in our growth of net earnings compared to previous periods."

Three months results:

"For the three months ended June 30, 2008, we generated net revenues of $23.96 million compared to $13.99 million for the three months ended June 30, 2007, representing an increase of 71% year-over-year. Linear motors and related integrated application systems contributed 45% to total revenues, automobile specialty micro-motors contributed 38%, and controllers, armatures, and other special motors contributed 17% compared to 66%, 0%, and 34%, respectively, for the three months ended June 30, 2007. "

"Net Income for the three months ended June 30, 2008 was $6.23 million compared to $4.56 million for the three months ended June 30, 2007, representing a year-over-year increase of 37%. Earnings per diluted share were $0.31 and $0.24 for the three months ended June 30, 2008 and 2007, respectively. The income tax that the Company began to pay on earnings has resulted in a significant reduction in our growth of net earnings compared to previous periods. Higher SG&A costs for the second quarter of 2008 versus the second quarter of 2007 also negatively affected the net earnings. Additionally, the Company received $763,408 in government grants in the second quarter of 2007, while none in the second quarter of 2008, also affected the comparison of the two periods unfavorably."

Now, in the next quarters the new acquisition numbers will kick in. Fundamentals are all there for an impressive growth. Company does not appear to slow down at all.

Summary: Excellent 2Q numbers (beat all analysts forecasts) coupled with great chart setup - if that doesn't give HRBN a nice jump, I would be really suprised. Anyways, no worries here for the long term as usual.

Tongxin International (TXIC) - Look, it's not a disaster that the company's stock is down less than 6% from the time they got the merger complete. Once again, many chinese stocks are down 40%+ in the past 6 months. Disappointed about lack of upward movement? Yes. Worried yet? NO. Give it time and wait for earnings.

Almost Family (AFAM) - What a beast. Great earnings, just great. Chart is getting overextended though. If you are not out of it yet, I would suggest to take profits here. Has to settle a bit.

Here is my thinking on the market:

So far, market acts as I pretty much expected: bottomed at 10,800-11,100 area. Now, pushed over 11,600's with Nasdaq and S&P500 breaking out technically. Unless something changes materially, we should see a next resistance at 12,200-12,300 area fairly soon. Still on target for 13k by late Sept or Oct.

Chinese market is about to start heating up again. It seems to be bottoming out at 2500-2700 area. Even if it goes slightly lower, this looks like a bottom. Statistically, stocks of the country with Olympics gain on average 30% in the next 9 months after Olympics. So, start nibbling on your favorite Chinese high flyers :), but I would suggest to stick with stocks that got great fundamentals. We are about to witness a next wave in Chinese stocks buying. Get ready for it...

Updates and new stock to watch

2008-08-02T14:38:00.002-05:00

Very nice week for our undervalued small caps:

YTEC - Since mentioning it at low $11's, it had a very nice week. The break of mid-high $11's was crucial. We saw a nice gain all the way to mid $13's even when the market wasn't doing too good. Hard to say what will happen next, but some profit taking is inevitable at this point.

AFAM - wanted to mention it one more time. It continues to amaze me, as it breaks new high every week. It now reached $35, making it a solid 75% gain since mentioning it at $20 just a few months ago.

HEK - another solid performer this week. But its warrants make it a better play, because of the percentage gain.

HRBN - again, based on the chart, as mentioned earlier, it's starting to come out from the low base closing at just above 50 dma even in the down market. Last time we closed above 50 dma, we had a nice run for another 4 points. I believe this is the beginning of a very solid uptrend. The earnings are coming shortly and should continue to tell a successful story here. It's still early....

One continuous disappointment is TXIC (Tongxin International). Disappointment in terms of not gaining anything. I would take any not-losing stock in this market though :) Unfortunately, it's still not attracting the masses, but the earnings are coming and we may get some more exposure based on them...

New stock to watch - MAQ and the warrants MAQ-NT (MAQ+). More on this company in a few days. Quick note - the vote on acquisition is expected within next 10 days, so be sure to know the risks associated with it.

More updates in a few days....

Waiting time

2008-07-29T14:52:00.002-05:00

It's now waiting time for the earnings that will come in August for many value stocks, such as HRBN and TXIC. Really nice chart is forming for HRBN. Hoping to see more volume with 2 weeks left before the earnings.

HEK is looking very good in the past few days - mentioned on the watch list few weeks ago...

Here is another stock that's worth mentioning. This is kind of odd to come back to this stock, but the chart is starting to look attractive. The stock is the second stock that was mentioned on this blog more than a year and a half ago :) - it's YTEC (Yucheng Technologies). Volume is coming back to this stock, and it seems to be making a good base in $10's... Break over high $11's will make the stock very attractive even if for a short term only.

Market tried to test the lows in 10800-11100 area, not going below 11k this time. So far, test was successful and it's nice to see a recovery after yesterday's big drop. We are maybe on the way to 13k by late Sep / Oct. time.

Let's see what happens from here....

Quick update and some thoughts

2008-07-22T21:53:00.002-05:00

Just a quick update on HRBN, AFAM and TXICF.OB

Harbin Electric (HRBN) - nice chart developing. Last week we had MACD crossover with confirmation. Ever since, the stock has been inching higher. We still have ways to go, but it's nice to see that the lows in $12.90-13.00 area were held again.
Now, we are looking at at the next big resistance in $16.00 - 17.00 area.... Will be interesting to see if the inverse head & shoulders pattern develops in that area.

We heard the details of the acquisition. The acquisition price was at the high end of the estimates, but it's still a very good deal with accreative earnings. Earnings are coming within 2-3 weeks and I believe they should be good.

Tongxin International (TXICF.OB) - well, this day finally arrived, even though it's half a year later, than I expected :)

http://www.otcbb.com/asp/dailylist_detail.asp?d=07/22/2008&mkt_ctg=OTCBB

The stock will be listed on Nasdaq Global Market on Wednesday, July 23rd.
Earnings will be here in 2-3 weeks, as well. I don't anticipate a significant move yet, but I do hope that we'll start seeing PRs and more info coming out from the company, which should generate investors' interest.

Almost Family (AFAM) - Has been going up no matter what market was doing. Nice 50% gain from the recommended $20 buys. The volume significantly increased, and it might be good time to drop it from "undiscovered" list, at least for the time being. Great gain in a short time.

Finally, some thoughts on the market:

In the last update I mentioned that I think DOW may drop to 10,800 and that I thought 10,800-11,100 was the bottom. Well, so far it turned out exactly that way. Time will tell if this 10,800 will hold, but I still believe we'll see DOW around 13k as early as late Sep / October.

The situation reminds me of when everybody was in euphoria, when DOW was hitting 14,300 and we had our first drop. Everybody was still buying, screaming "buy that dip, we are going much higher". Well, this looks very similar to me, except the situation is reversed. We had our first good bounce, but many are still screaming "short that bounce, we are going much lower". Again, time will tell, but it seems to me that the mkt is starting to look past the credit problems and trying to look at the economy in 6-9 month frame.

Stocks, observation, market in general...

2008-07-08T17:51:00.003-05:00

First, I would like to provide some updates on the stocks I'm watching or following in no paricular order:

HRBN - Harbin Electric

Back on June 19th in my post I have inserted a graph, which showed an important line that the stock was bouncing off for months. I was under impression that the market would recover due to falling oil prices. Well, the oil prices didn't fall. They just continued on impressive rally with everybody and their butlers buying anything that has the word "oil" in it. Remember dot-com era? Remember real-estate era? What does this oil rally remind you off now? I'll discuss more about this later in the post. Back to our stock. HRBN has never been doing good with market weakness, and since the market took a big plunge, it took HRBN along for a ride, especially since that support line was broken.

Now, it has been severely oversold (RSI is well below 30), but what is not oversold in this market? :) On the positive note, today it bounced off the lows in $12.90's that it's been bouncing off two times before. Plus, the bounce was very bullish, as it closed positive on good volume.

On the news front - We've heard the details of the financing: 3.5 mil shares at $14.17. It's a big dillution, but this was expected. Most of the money will go to the acquisition of the profitable company. News on this deal are supposed to hit any day now.

Yes, I'm disappointed in the short term movement of HRBN, but I like how the company is positioning itself for explosive growth in the next 2-3 years. No worries about long term potential so far.

Finally, the stock has been added to Russell 3000.

TXICF.OB - Tongxin International

Ever since hitting the resistance at all time high, we've been sliding on very small volume (except a few pre-arranged blocks). Nothing to be concerned about at this point, as the stock is really less than 10% from its highs, which is very good considered that most Chinese stocks are down 50% and more from their highs.

One thing that is bothering me is the Nasdaq listing, of course. Too many promises so far - not a good start for a company.
But, check out this latest news about the state of Chinese autosales:

http://biz.yahoo.com/ap/080708/china_gm_ford.html

Key points:

"The Chinese vehicle market has continued to grow in 2008, setting a new first half sales record," said Kevin Wale, president of GM China, in a written statement.
U.S., European and Japanese automakers and their local partners are investing heavily to expand production and sales in China, the world's second-largest vehicle market after the United States.
Auto sales in China have been largely unaffected by high global oil prices because government controls have kept retail gasoline and diesel prices at levels that are among the world's lowest. Automakers say sales of SUVs and luxury sedans are growing at annual rates of up to 100 percent.

Bodes very well for both TXICF and HRBN.

Also, it appears Fenberg has increased his holdings to 2+ mil shares compared to 1.4 mil shares from the last filing. Not sure if this was the result of warrants exercise or new purchases. In any case, it can't hurt.

CNEH.OB - China North East Petroleum.

Well, the stock has more than tripled from its lows in 2008 all the way to $5.60.
This was a great price to take a break and reevaluate. This is what a lot of people did locking in their hefty profits. Stock went down 25% after reaching its highs few days ago on good profit taking. What happens next? Hard to say: oil is falling (at least for now), there are many other good oversold plays, and nobody wants to hold anything right now. At this point, I'm dropping it from "Undiscovered" stocks, as the recent run with huge volume pretty much confirmed that the stock was indeed discovered. Perhaps it's still a good play, but triple in a few months in this tough year is more than enough.

TVOC.OB - Texas Vanguard

Never really caught up with the masses. Still undiscovered, but really not doing anything. Perhaps, earnings in August will shed some more light. At this point, there is really nothing more on it to update. Maybe one day it'll jump like CWSI.OB did as highlighted earlier in the year.

BSIC.OB - Basic Earth Science

Earnings restatements news came out of nowhere. Was well explained by CEO, and the stock even came back nicely after all the negativity. But, with oil momentum slowly dying, the stock went down as well. Plus, late filing is another factor causing a slide. Always lock in at least half of your profits when the stock is up nicely (and it was up significantly at $2.90s)

AFAM - Almost Family

As mentioned earlier, it's a recession-free market-weakness-free stock :) Just keeps on going. Long term - no other updates.

New stocks on watch at this moment: HEK, SRRY.OB

Now, where does this market go from here? I personally doubt DOW will get to 10k. It may drop to 10,800, but this is as low as it might go, in my opinion. 10800-11100 is the bottom, and if we haven't reached it yet, we might reach it soon. Perhaps, one more big scare to flush everybody out? DOW should be around 13k again as early as late Sep / October, in my opinion. Time will tell :)

Chinese stocks should get back in favor, especially with Olympics exposure. Chinese economy is not slowing down as US economy. Upcoming earnings should show that.

For now, be really careful in this market. Good luck!

Quick update

2008-06-24T20:50:00.003-05:00

Quick update on two stocks - TVOC.OB and TXICF.OB

TVOC.OB had what I call a "day 1 - discovery". Very nice volume with a jump in share price - the highest volume in over 3 years. Keep in mind, 54k volume is roughly 17% of entire float, which is only 314k.

Quick comparison to MXC, which has a float of 540k - before MXC took off from $4's, the stock was trading 0 - 3000 shares for a long time. Then it doubled on tiny volume to $8. Since then, the volume increased significantly all the way to $50+.

OTCBB is the big factor, but TVOC.OB is profitable company with eye-popping fundamentals and with easy comps compared to the last year. 2Q earnings are coming in August.

Recap from the early write-up:

http://undiscoveredstocks.blogspot.com/2008/05/quick-update-on-aaacob.html

Side note: watch TVOC.OB for movement on MXC sympathy.
Actually, TVOC.OB is much better than MXC, which moved from $4 to $44 in just a few weeks.

TVOC.OB trailing PE is 15, while MXC's is 175
TVOC.OB float is 314k, while MXC's is 549k
Latest 1Q earnings came in at .39!!!!

Stock is priced at the last year's oil&gas prices.
In 2007:
Oil Production volume - 61,293 barrels
Average sales price per barrel - $68.04

Gas Production volume - 359,969 MCF
Average sales price per MCF - $7.24

Now, on TXICF.OB (former AAAC.OB).

Very nice volume and movement in the past few days with few big blocks. Yesterday we hit all-time resistance level, plus the chart looked like the stock was getting slightly overbought. I expect the stock to base here (perhaps with some profit taking) before resuming its move.

On the new stocks to watch - not ready yet. Found some red flags that require more research.

Update on current stocks

2008-06-19T20:34:00.005-05:00

Just an update on the stocks I follow in no particular order:

HRBN - I like the test of 50 dma at low $16's. Every time it goes down to test that level, nice bids show up to support the price, showing continuous accumulation.

Check out the following chart:

This is an important support line to hold and I believe it will hold. Watch for MACD crossover. If the market bounces from here (and I strongly believe it will), we should see a nice run developing soon.

Another factor that may impact the share price of HRBN is upcoming details on the acquisition, which are supposed to be announced by the end of the month. Many are on the sidelines, waiting to hear these details to know exactly what financing options the company has planned for the acquisition. Watch for the news in the next 10 days, in my opinion.

AAAC.OB is no longer AAAC.OB, but not yet on Nasdaq. The ticker has been changed to reflect the new company, but the stock so far remains on OTCBB. The new symbol is TXICF.OB (warrants - TXIWF.OB and units - TXIUF.OB). This is normal practice. One quick example - YTEC. This company used to be a blank check acquisition company - China Unistone Acquisition Inc. traded on OTCBB as CUAQ.OB. Once the merger happened, it changed the ticker to YCHTF.OB some time later. Then, a little later after that, the company was transferred on Nasdaq with the symbol of YTEC. Nasdaq is more strict to SPACs now, so it seems some additional requirements are delaying the process. The stock is holding up nicely with continuous bid support. No worries there. On another note, remember CSCA.OB (now APWR). The stock has been unstoppable all the way from $7's to $30+.

Remember who the top holder is? Jeff Feinberg with his fund. Food for thought - He owned over 40% of original CSCA.OB shares, and he also owns 24% of original AAAC.OB shares.

Again - no worries there.

BSIC.OB - Slowly, but surely, gaining the momentum and interest. Reached $2.94 high today before retracing on good volume. Earnings run started, as they are expected within next 10 days. Great company and great long term, if the oil prices stay above $100. They recently reported that all 32 wells are now operational, and they are very excited about the current production levels.

AFAM - announced the biggest acquisition to date:

Almost Family signs definitive agreement to acquire Patient Care; expected to contribute significantly to earnings in '08 but is expected to be accretive to EPS in '09

Also, as pointed out by one of the readers "the divot", a great article came out about this company:

http://www.smallcapinvestor.com/articles/06132008-almost_family_home_healthcare_firm_makes_itself_at_home

This article came out before the acquisition announcement, and here is one paragraph from there:

"Avondale Partners raised its earnings estimate for 2008 as a whole to $1.48 from $1.27 and for 2009 to $1.60 from $1.34, not taking into account any new acquisitions, which the analysts consider likely. "

Once again, just a great long term hold.

CNEH.OB - continues to trade in the range. $3.73-$3.75 is the level to watch for a break to the downside, $4.50 is the level to watch for the break to the upside. Other than that, the stock will probably get a lot of attention when Q2 numbers are released, but there is still plenty of time until then. There are also a few upcoming road shows.

TVOC.OB - saw a little bit of movement today. 5k+ volume is better than 0 for this stock :). No worries here. Downside is limited, upside could be great. I like risk/reward ratio here. Again, the earnings are in August.

I will have a few new stocks to watch, as I finish my DD on them hopefully in the next few days.

One that I don't really consider undiscovered, but just a potentially great company is HEK - Heckmann corporation, which is another SPAC with a great management, acquiring China Water and Drinks company. This is a good article to read about the deal:

http://www.forbes.com/2008/05/21/china-water-heckmann-markets-equity-cx_mp_0520markets30.html

Good luck!

Updates on current stocks

2008-06-11T19:11:00.002-05:00

Current list of "undiscovered" stocks include - HRBN, AAAC.OB, BSIC.OB, AFAM, CNEH.OB, TVOC.OB.

HRBN - down due to market weakness and lack of volume (and interest). It's trying to test 50-day MA at $16.01. Stock has also been down 4 days in a row. Long term - nothing changed, all fundamentals are still there. Short term - a bounce is expected and new leg up should commence shortly after successful test of 50-day MA.

AAAC.OB - same old "Nasdaq listing any day now". Still waiting... It's nice to see the stock to break 7.90-7.95 level on volume in both stock and warrants. Very large bids are showing up on Level II in the past few days.

BSIC.OB - took a dip to below $2 mark after hitting $3. The stock has been up since then, but will probably trade in the range of $2.26 - $2.75 until the earnings report, which should come in at the end of June. With the oil up significantly, we should see nice numbers for the year.

AFAM - probably no need for updates on this one. This is purely long term play, which is not really affected by the weakness in the market.

CNEH.OB - will probably trade in the range for a little bit, as technicals seem to be improving. Watch MACD crossover, as it might occur within a week. The stock will get a lot of attention when Q2 numbers are released, but there is still plenty of time until then.

TVOC.OB - no love for this stock. Extremely undervalued, but nobody wants to buy it with the tiny float it has (314k). Most likely will have to wait until next quarter eye-popping numbers are released in August.

Few updates

2008-05-21T22:27:00.002-05:00

Oil&Gas craziness continues. It seems like if the stock has anything to do with oil&gas and it trades on AMEX, it runs wild. I believe once there will be no more AMEX stocks to run, it'll spill over to Bulletin Board oil&gas stocks.

BSIC.OB jumped from $1.70's (recommendation) to $3.04 in a matter of a week. Today, it pulled back a little - nothing goes straight up (unless it's MXC). $3 is a major resistance and I'm pretty sure it'll try that again, who knows - maybe even tomorrow. The stock really started its run from $1, making it 200% run in just a few weeks. It's just taking a little break to reload. Very bright future here with excellent management. It's not your regular pump&dump stock. It's slowly gaining more interest, indicated by the increasing volume. I think the run will continue after a small consolidation.

AFAM continues to run (since recommendation at just below $21), ignoring the market weakness. During the previous market crash at the beginning of the year, it pretty much ignored it too. This is not a daytrade by any means. Just a solid long term hold.

TVOC.OB is getting ready to be discovered once the oil&gas momentum spills over to Bulletin Board stocks. The stock is priced in at prices of oil in $60's. Where else you can find an oil&gas stock with TRAILING PE of less than 16, when these previous earnings were based on $68 dollars average price of oil? Besides coming up with $0.39 in Q1, it has a tiny float - 314k.

HRBN - just trading in the range. Small weakness today due to general market weakness. The good thing it closed above 200dma, so it's holding for now.

Quick update on AAAC.OB

2008-05-20T21:15:00.004-05:00

Very nice presentation today at Brean Murray Conference:

Link here -> http://www.wsw.com/webcast/bmry3/aaac/

Some highlights:

Tongxin International (AAAC.OB) will be transferring to Nasdaq "in the next few days" - quote from Rudy Wilson (COO of the company) on today's presentation.
Reiterated guidance for 2008 - $15 mil in net income or $1 in EPS based on 15.3 mil O/S
Expansion of sales to North America and Europe
Additional profitable acquisition at the end of the year
More exposure after Nasdaq hits
Over 30% growth
Long term contracts
Very experienced management (30+ years)

If you were on sidelines before, now it's becoming a table pounder. Warrants could provide a best play here. Notice how they are now trading at a premium

Good luck!

Side note: watch TVOC.OB for movement on MXC sympathy.

Actually, TVOC.OB is much better than MXC, which moved from $4 to $44 in just a few weeks.

TVOC.OB trailing PE is 15, while MXC's is 175
TVOC.OB float is 314k, while MXC's is 549k
Latest 1Q earnings came in at .39!!!!

Stock is priced at the last year's oil&gas prices.

In 2007:

Oil Production volume - 61,293 barrels
Average sales price per barrel - $68.04

Gas Production volume - 359,969 MCF
Average sales price per MCF - $7.24

I don't have to stress how much higher oil&gas are right now :)

Today, TVOC.OB hit all time high on the higest volume in years. Yes, it's only 36k, but that's over 10% of the float and is very high for this thin stock.
MXC started the same way. Look at it now...

Anything can happen, but with oil&gas craziness, I would not be surprised to see a double from here in this market. At the same time, it is a dangerous play, as it has very low liquidity and low float stocks are generally hard to play.

Be careful and good luck!

Blast from the past and some updates

2008-05-19T22:05:00.004-05:00

Back in February I highlighted a promising chinese wind power stock - "China Wind Systems" (CWSI.OB). At that time it was trading at $2.00-$2.10. It had a quick run up to $2.50 and then retreated. Again - very promising due to the growth that the management expected. The trading has been really quiet for 3 months, as the momentum from china wind power never caught on with this stock. Well, lately it has been chinese stocks all over again and especially the ones with profits.

On Thursday, the company released great earnings, which actually were expected as the management provided the business outlook earlier, but for some reason these results were really NOT expected by the momo crowd :). And, what do we have? The stock suddenly jumps over 160% to close at $6.00 (up 134% on a day). I guess this is where the saying "patience pays" really applies.

I can't really predict the movement from here on, as this is now purely a momentum play and anything is possible at this point - from pump&dump to a run similar to PDO or MXC. Take your pick and be careful with it.

Now, some updates on other stocks -

China North East Petroleum (CNEH.OB)

Posted excellent earnings last week and stock did not sell off even after an impressive run up. Instead, it kept on going and today it hit the resistance right near the all-time high. Just a month ago, the stock was trading below $2 and many have lost their patience with it. Once again - "patience pays." It is turning out to be a great play of 2008 as expected, and it's not finished yet.

Highlights from the earnings release:

1Q08 Revenue Increases 476% to $10.8 Million
1Q08 Net Income Increases 1,052% to $3.3 Million
Net income for the first quarter increased significantly to $3.3 million, or $0.17 per diluted share, versus $287 thousand, or $0.01 per diluted share, in the first quarter of 2007.
We now have 157 wells in production as of the end of the first quarter and expect this number to grow on a quarterly basis as we progress through the year. Our increased cash position provides us with greater flexibility to not only drill new wells this year, but also allows us to further develop oil extraction technologies and selectively pursue acquisition opportunities.

The company is delivering and it's definitely gaining the Wall Street trust.
Once again, it hit the resistance at all-time high, and currently going through a small technical correction. In the long run, the stock and the company should continue to perform.

Basic Earth Science Systems (BSIC.OB)

Since highlighting this stock in $1.70, it has gained 50% (closing at 40% today), and I believe it's just starting to gain Wall Street atention. Its prospects are impressive. Nice micro oil&gas play with low O/S and float in the hottest area. Fundamentals are great for this small company. With other similar type plays making huge runs, such as PDO, MXC, FPP, I don't see why this company can't have another at least 100% run. It usually runs similar to FPP, so the race is on, in my opinion.
In the long term, I believe this is going to be a very successful company. We should hear about the new 16 wells soon, as well as the yearly results at the end of June. I expect more updates from the company between now and then.

Harbin Electric

After releasing impressive earnings that beat on both revenues and income, the stock has been in accumulating mode for at least 5 trading sessions. It's trading in very tight range between 17.80 and 18.20, and getting ready to resume the uptrend.
The company presented at Roth today. The new presentation has been posted on SEC:

http://sec.gov/Archives/edgar/data/1266719/000114420408030589/v115042_ex99-1.htm

Few highlights from it:

Reiterating revenues projections for 2010 -> 350 million excluding acquisitions
Latest acquisition -> Weihah Hengda Electric:
2007 annual sales - 46.5 milllion growing at 30% annually would mean roughly $100 mil by 2010
Meaning at least 450 millon in revevenues in 2010 for HRBN compared to only 65 mil in 2007.
Foreign sales just getting started -
-- Grew international business from 3% in 2006, 12% in 2007, 17% in 1Q2008.
-- Established US office for business development
Top Four Customer sales distribution -
Went from 81% for top 4 customers and 19% for others in 2006 to 66% from top 4 customers and 34% for others
Showing consistent revenue and income growth with stable gross margins consistently above 46%.

This company definitely has a great future. Remember $13's, $14's and $15's, and all the table pounding? :) These prices are starting to look further and further away. I believe they will be far away in 2010 and beyond.

No updates on AAAC (Tongxin International). Still waiting on Nasdaq. As the two stocks (CWSI.OB and CNEH.OB) showed - patience pays. It's just a matter of time before this stock makes a move.

This is all for today. Good luck!

New stocks of interest

2008-05-08T10:53:00.003-05:00

Here are the stocks as promised:

1) BSIC.OB - Basic Earth Science Systems, Inc.
First - the business:

Basic Earth Science Systems, Inc. engages in the exploration, acquisition, development, operation, production, and sale of crude oil and natural gas in the United States. It primarily operates in the Williston basin in North Dakota and Montana, south Texas; and the Denver-Julesburg basin, Colorado. As of March 31, 2007, the company owned a working interest in 83 producing oil wells and 10 producing gas wells in the states of North Dakota, Montana, Colorado, Texas, and Wyoming. Its estimated proved developed oil and gas reserves were 1,185,000 barrels of oil equivalent. The company was founded in 1969 and is based in Denver, Colorado.

It's a small profitable oil&gas company, which can gain real attention once investors start looking for small undiscovered oil plays. You've seen how MXC jumped from 4's to 10 in a matter of few days. FPP doubled quickly. Here is another profitable play with exposure to the Bakken play in North Dakota.

Here is one paragraph from their latest PR:

"We continue to be excited as we announce these new production rates," commented Ray Singleton, president of Basic. "Our northeast production facility and its eight wells are now on-line and we should be reporting initial production rates from its new wells within a few weeks. Repeating our previous statement, to this point, there have been no real surprises; there have been no dry holes, all geologic sections were present, no completion problems were encountered and, as anticipated, production rates are varied, yet still within the parameters of our initial expectations. So far, operationally, this has been a very successful venture."

Stock has been doing great past few weeks and it's getting close to 52 week high. Earnings are expected shortly and I believe they are going to be great based on how high the oil is. WIth float of just over 6 mil, this stock can go quick on good results.

2) AFAM - Almost Family Inc.

Almost Family, Inc. and its subsidiaries provide home health care services in Florida, Kentucky, Ohio, Connecticut, Massachusetts, Alabama, Indiana, Illinois, and Missouri, the United States. It operates in two segments, Visiting Nurse (VN) and Personal Care (PC). The VN segment, which operates primarily under the trade names �Caretenders' and �Mederi-Caretenders', provides a range of Medicare-certified home health nursing services to patients in need of recuperative care, typically following a period of hospitalization or care in another type of inpatient facility. It also offers specialty programs based on local needs, such as its Cardiocare Program, Orthopedic Program, Urology Program, Optimum Balance Program, and Telehealth Monitoring Program.

I've followed this company for a long time. It's very stable, continues to make great acquisitions and easily survives any downturns in the market. This one could be a great IRA hold. Don't expect to get big gains on it fast. This is a safe long term play, in my opinion.

Latest earnings were outstanding:

http://biz.yahoo.com/prnews/080506/cltu043.html?.v=101

First Quarter Highlights:
- Net service revenues increased 23% to $39.0 million
- Visiting Nurse segment net revenues rose 30% to $29.8 million
- Net income from continuing operations increased 41% to $2.6 million
- GAAP diluted EPS increased 47% to $0.44 per diluted share
- Expanded Florida presence with $16 million acquisition of Apex Home Healthcare Services, LLC in March 2008
- Closed common stock offering of 2,250,000 shares in April 2008 for net proceeds of $37.3 million

Analysts, covering the company, just raised the target to $28. 2008 EPS is expected to be $1.42 and it has been increasing. I believe this is very conservative number.
More to come on this company....

Updates and new stocks to watch

2008-05-06T18:18:00.003-05:00

Few updates today on the undiscovered stocks from this blog plus a few new stocks to watch.

1) Jinpan (JST) - Well, after breaking huge resistance at $30-$31 level, it never really looked back, and finally reached the level I expected it to reach - into the $40's. I'm no longer considering it undiscovered, as I belive it found a nice level to base. It may gain a little more, but the recent gain of almost 100% in just a few months make it a risky play for a short term in the volatile market conditions. Great stock, great company, great fundamentals, great business outlook, and finally a great run - Patience paid off. And as they say - move on to the next great thing!

2) Harbin Electric (HRBN) - is still one of the most undervalued stocks out there. So far, it is only 20% from the lows reached early April, but it has a lot more to gain. I've been saying before that $13's, $14's, $15's are the best prices to pick up HRBN, as with the growth it's about to experience, the share price will not stay that low for a long time.

Here is the interesting comparison. This is from the latest JINPAN (JST) release:

For the full 2008 fiscal year, the Company currently anticipates revenues of approximately $155 million, which is a 30% over 2007 sales of $119.6 million. The Company anticipates net income of approximately $21.4 million, or approximately $2.64 per diluted share, which is a 30% increase compared to 2007 net income of $16.5 million, or $2.04 per diluted share

As you can see, JST anticipates to have $2.64 per share in 2008. HRBN is not there yet, but analysts expect to see similar numbers in 2009 with continuous huge growth in subsequent years. JST traded at $18-$28 levels for a while, until the latest earnings release. These are completely different sectors, but the fundamentals and growh is what I'm after. As I expected JST to trade in the $40's, I expect HRBN to trade even higher in 3 years.

Now, back to earth :). Let's talk short term. Today the company announced that the earnings will be released early Friday morning (EST time) with CC followed. This is the first time the company is hosting a conference call to discuss the earnings as I mentioned earlier. This is a great sign, as company is maturing. It would go a long way if the company provides guidance on this conference call.
We should definitely hear more about the acquisition they made recently and how it will increase the bottom line.

On another note, the Bejing Airport Express Train Station is complete, and HRBN built prototype motors for the cars that will be put on the track. They are planning to be a big player in this area. Read their latest presentation. Here is just the last paragraph from the Roth Conference back in 2007:

"We know it's the largest mass transport market in the world, and giving an illustration on this slide here, is the difference between the future needs and the existing supply of railcars for the passenger marketplace. We estimate that there is going to be a need for 5000 cars by the year 2020, which would translate to an addressable market size in excess of $5 billion"

Once again - very undervalued at these prices.

3) China North East Petroleum (CNEH.OB) - what a run! 2008 is shaping up to be a great year for this undervalued gem. It's already up 100% and who knows how far this can go. I'm not going to write a lot about the company here. Instead, I'll point to the latest seekingalpha article, that perhaps brought some serious attention from the investors, as indicated by the huge run it had in the past few days. This is a must read for those interested in this company: http://seekingalpha.com/article/75660-china-north-east-petroleum-strong-growth-clear-visibility?source=side_bar_long_ideas.

Earnings are expected next week. So, the short term movement, given the earnings and the latest run, could be very volatile. But, if they continue to deliver great earnings and show great profits, this could gain another 100% pretty quick.

4) Tongxin International (Former Asia Automotive) (still AAAC.OB) - not moving yet, but as with many gems, patience is needed. Very nice 2007 earnings reported recently. They were a little better than I expected. Stock is trading at roughly trailing PE of little over 10, and 2008 PE of less than 8.

1Q earnings are expected shortly along with anticipated Nasdaq listing. I know it has been a long wait, but once Nasdaq listing comes, stock should begin to appreciate significantly. There has been some movement in warrants above premium, which is good sign, as investors are betting on higher prices. Not going to write any more on this one today. We'll see how it develops in the next 2 weeks.

Now, there are 2 stocks of interest that I would like to share. I will write a separate post on these tonight or tomorrow. The stocks of interest are: AFAM and BSIC.OB.

If you have any interesting undiscovered stocks to share, please write them in comments.

Good luck!

Updates on HRBN and AAAC

2008-04-17T20:41:00.006-05:00

1) Harbin Electric (HRBN)

Here is the 6-month chart:

Notice the similarities in the chart pattern in November of 2007 and April of 2008.
That pattern brought the stock from $15 to over $22 on initial jump, followed by a larger move to $28. RSI is at the same level and going up. MACD remained in the positive territory and continues on the bullish trend. Last couple of days I began noticing a bid finally being supported with a decent size. I will continute to reiterate that $13-$15 level for HRBN will be laughable 12-24 months from today. Even for the short term, stock is becoming to look very attractive based on the chart alone.

On the company developments, I'm still waiting for an additional financial details on the acquisition they made - in terms of the financing and the dillution for the shareholders. On another note, we should see 1Q earnings next month, and the acquisition will be included in the earnings.

2) Asia Automotive Acquisition (AAAC.OB) - or what we should call it now: Tongxin International.

Well, the long wait is over. Honestly, it took a lot longer than I expected originally, but they finally came through with the merger. 85% of shareholders voted for the merger (80% was required), and thus no emergency buyout was needed, which helps, since the will need this cash to pay for the acquisition. I never expected stock to jump on the news of completing the merger, and the action today was exactly what I expected. As a reference, APWR (former CSCA) acted in the similar manner first few days after the merger, only to jump much higher later.
There are many catalysts ahead for the company: Nasdaq listing (which should come very quick, I believe), news of additional acquisition (as outlined in their presentation), PRs from the new company, and finally fantastic earnings showing what the company is all about. All these events will put this company on the radar and should gain market trust pretty quickly.

Another important thing - warrants. Calling warrants in brings cash to the company. They can call the warrants in when the common trades above $10 for 20 out of 30 consecutive days. Almost every company that went through this kind of merger (that I'm aware of) gets to call-in price. That is one of the reasons the stock will trade north of $10 in the short term.

Good luck to all!

Updates

2008-04-09T21:39:00.002-05:00

It has been 2 weeks since last update. Sorry about that. I don't have any new picks at the moment, although there is one I'm researching now and hopefully will provide some information on it within a few days. Now, few updates on the stocks mentioned here:

1) Jinpan - JST.

Ever since coming out with monster earnings few weeks ago, the stock has made a massive move upwards. $30-$31, as described earlier, was the wall for some time. It has tried this level many times and retreated every single time. This time the breakout happened on very nice volume. The stock made an impressive run all the way to $34's. It has obviously given up some for profit taking. How can you blame profit takers from $22's just few weeks ago. These low float / low volume chinese stocks are jumping back and forth on low volume and often depend on the mkt conditions. So, short term of these kinds of stocks are hard to predict, but as far as long term is concerned, JST has continued to deliver great results quarter after quarter. Their latest outlook was for $2.64 eps in 2008, and they always provide conservative numbers (as I've noticed in the past 2 years). Very impressive numbers. Again, short term is tough to predict (it may even slip to < $30), but within a year this stock will probably trade in $40's.

2) Harbin Electric - HRBN

The bullish MACD crossover happened in the low 13's and then the stock exploded. Few days ago they provided more details on their acquisition. It looked like the mkt liked the deal. That coupled with bullish chart brought the stock all the way to its resistance and near 200 dma almost to mid $17's. Profit taking was obvious at that point. Resistance is big, plus many people wanted to get out as they did not feel safe after buying too high. Stock has retreated back to $14's now. The chart is still in uptrend, and I believe it should start going back up to the resistance point. Next event that I'll be waiting for is more financial details on the deal. It seems that they will have to issue some shares to pay for the acquisition, which looks like a bad deal at the first look (dillutive). But, EPS is accretive, which means the contribution to the bottom line will be immediate.

Dutton Associates issued a new research note on HRBN today. They've been very accurate with this company in the past 2 years. Look at their update here -> http://www.duttonassociates.com/research/HRBN/index.html.

Also, Yahoo increased earnings estimates today, because it seems that another analyst, following HRBN, increased his estimates - Global Hunter Securities.

Just like with JST (Jinpan), long term of this company is extremely bright and I don't care much about short term movements. Near $3 eps in 2009 would definitely be an eye opener next year.

3) China North East Petroleum (CNEH.OB) - What can I say? Stock has been on a monster run ever since hitting the lows in $1.60's. Few days ago it broke a huge technical resistance at $2.60 and then briefly jumped to over $3.00. It's in consolidating mode right now and may retrace to $2.60 level. If the support holds (and I believe it will), the upward move will continue towards 1Q earnings next month. Big things are ahead for this company.

4) Jaguar Acquisition (JGAC.OB) - Don't have much to say, other than the merger has been approved and look at the action in warrants. What this means is get ready for some action in AAACW.OB:

5) Asia Automotive Acquisition (AAAC.OB / AAACW.OB) - The move in warrants today came due to success in JGAC merger. That merger makes AAAC.OB merger look almost guaranteed. (although I don't really want to use that word). Warrants are lagging, but only because possible merger is still 1 week away. I'm not looking for warrants to just catch up to common. I'm looking for much higher numbers here, once the stock begins trading on Nasdaq, which should occur immediately after acquisition (IF THE MERGER GOES THROUGH, AND PENDING NASDAQ APPROVAL). I really hope come next Friday, we'll have TXIC and TXICW on our hands (these are proposed Nasdaq tickers).

Good luck and stay safe in this market!

Please leave comments on any of these stocks or markets in general.

Chart update and more

2008-03-27T22:25:00.004-05:00

Update on HRBN chart ->

One more push to close to $15 level and the chart will look really pretty.

As you can see from this 1 month chart, MACD is about to turn positive, and the fast line is about to cross above signal line, which is called MACD crossover. This is a very bullish short term indicator. Stochastics still shows oversold, so we are good to go. If market doesn't crash, we should start seeing a nice uptrend developing. First stop would be the 200 dma, of course, around $17.65.

Update on CNEH.OB

In the past few days we witnessed a very strong bounce from the lows that were set in $1.60's. I believe this is in anticipation of earnings that will come out next week. We'll probably see some obvious profit taking. Who wouldn't mind booking 40% profits from just last week and getting out just before earnings?
But, if the earnings as good as most people expect, this stock will continue to appreciate throughout this year and beyond.

Update on JST

Last month I again mentioned this stock - JST (Jinpan). The stock got punished with the market, as it is a very low float stock, which doesn't usually have a strong volume.
Today the company reported incredible earnings, beating all estimates. The Y2007 net income was impressive $2.04. Even better was the business outlook for 2008, where they anticipate to make $2.64, and that is usually conservative, as they always beat their estimates.

Here is the paragraph from the release:

-- 4Q07 Revenue Increases 72% to $41.9 Million Compared to 4Q06 -
-- 4Q07 Net Income Increases 120% to $6.7 Million -
-- Full Year Revenue Increases 45% to $119.6 Million -
-- Full Year Net Income Increases 120% to $16.5 Million -

And on business outlook:

For the full 2008 fiscal year, the Company currently anticipates revenues of approximately $155 million, which is a 30% over 2007 sales of $119.6 million. The Company anticipates net income of approximately $21.4 million, or approximately $2.64 per diluted share, which is a 30% increase compared to 2007 net income of $16.5 million, or $2.04 per diluted share.

One word - Incredible!

Table Pounder

2008-03-24T19:20:00.008-05:00

This is something new from me. I don't like doing that, but I must say the following:

Harbin Electric (HRBN) is an absolute table pounder at these low prices, if you are looking at the long term.

Stock has retraced to just below $14 today and turned around to close higher. Yes, the whole market jumped today, and one might argue whether we've seen the bottom for HRBN. Looking at the charts, I would have to say we did.

Take a look at this 2 year chart:

You can see the line of support from the lows developed due to retrace in March of 2007, August 2007, and now.

In the next few days, I'm expecting a detailed update from Dutton Associates, who has been very accurate in the past reports on HRBN. Also, as far as I know, the company is planning to begin making the conference calls starting with their 1Q results, which should come in May.

Once the market returns to normal, where fundamentals do matter, investors will find the great value in this company. $13,$14,$15 will look like a joke in 2-3 years.

Other updates:

Still waiting on Asia Automotive Acquisition (AAAC.OB / AAACW.OB)... Less than a month remains here. Few days ago they filed another amended registration statement, reflecting the change in the Record Date.

Earnings are almost here in China North East Petroleum (CNEH.OB). Should be released on or around April 1st (and it should not be a joke) :)
There were news of investor conference, where CNEH is going to be participating.
Hopefull, we'll here about the status of Nasdaq/AMEX application soon.

Update on Harbin Electric (HRBN)

2008-03-11T22:00:00.003-05:00

Here is the beaten down stock. The stock is roughly 40% off its highs reached 2 months ago. Market conditions have been bad. The stock broke out to the downside from its trading range of $21-$24, as explained earlier. That followed breaking 200 dma to the downside as well - bad technical sign. Low float stocks always get punished in market weakness. Coupled with that was an uncertainty over earnings, but the company delivered again!

Yesterday after hours the company released its 10k, and today it released very detailed PR highlighting the financials and providing a business outlook.
One analyst has been right on the money constantly with this company - Dutton Associates. They've given pretty accurate forecast, and they continue to believe in the long term of this company.

No need for me to copy all the highlights from the PR. I'll just mention a few, which caught my attention and will comment on them in red.

Revenues from the acquired automobile specialty micro-motors business contributed approximately $10.5 million to total revenues, representing 42% of the total revenue growth. Dutton Associates have forecasted the revenues from this business to reach $10.0 million. This is going to be a major revenue driver moving forward, and it has had a very nice growth already.
The remaining 58% of total revenue growth came from increased purchases by existing customers of linear motor, armature and micro-motor products, and the new Tower Type Oil Pump which was launched in early 2007. This is another important revenue driver. The Company delivered only 13 units of the Tower Type Oil Pump in 2007, but is planning to deliver more than 200 units in 2008. That's huge
We are continuing the joint development of the linear motor driven train system for urban mass transportation with the Institute of Electrical Engineering of the Chinese Academy of Sciences (''IEECAS'') and expect that this product could begin to contribute to our business in 2009, assuming a successful test run at the end of 2008. Will be interesting to see how this works out in the long term
Our proprietary technology and product development capability helped gross profit margin increase to 49.6% in 2007, in our view, a remarkable achievement given that gross margin very rarely exceeds 45% in our industry. This truly is a remarkable achievment having consistent growth margins so high.
The Company's products that were sold directly to markets outside China increased to 12.4% of total sales in 2007 from 3.1% in 2006, reflecting the rapid growth of the Company's international business. Another revenue growth driver. This is important, as the company is beginning to sell their products outside of China, particularly in US.

Finally, just want to add that they forecast their revenues to reach over $350 million in 2010. The outlook is still very good. If anybody expected bad earnings, they sure were wrong. The company posted the numbers for the most part in line with the analyst expectations. The stock may not take off right away, as it will struggle with resistance points now, plus the market is still not out of the woods, but the long term for this company is very bright. It continues to deliver on
consistent basis, and whenever the fundamentals become crucial in the market again, the stock will find its value much higher from the current levels.

Update on Asia Automotive Acquisition (AAAC.OB)

2008-03-11T18:14:00.003-05:00

The stock has been taking a big hit lately. It's understandable - there is just over a month remaining to close the merger, and it has been a while since they filed an amended registration statement with the date of shareholder meeting.

It's not very clear why the the common (AAAC.OB) is taking a hit, as it's now trading below cash available in trust account. That's just irrational trading to me.
Warrants is different story. Since the warrants would expire worthless in case of no-deal, the risk in warrants increases dramatically; therefore, the warrants take a bigger hit. But judging by relatively low volume in both, it seems that there are just a few panic sellers.

Now, to the good news - the S-4 registration has been filed today after market close. And everything looks good for the meeting on April 4th, which gives them plenty of time before the deadline of April 19th.
Here is the link to filing:

http://sec.gov/Archives/edgar/data/1332552/000095012408001164/k22454a6sv4za.txt

One final thing remains - the actual voting, which should not be an issue (but keep in mind, there is always a risk in any investment). After voting takes place (on April 4th, assuming no additional changes), the merger should be complete within 2-3 days after that.

Another update on favorite stocks

2008-03-03T19:45:00.002-05:00

First update is on China North East Petroleum (CNEH.OB) ->

As mentioned earlier, financing was expected to be announced shortly. And finally, today, the long awaited financing deal has been announced. This has been a major uncertainty for this stock for a few months. Many have expected this to be a toxic financing or a financing with major dillution to the shareholders. It actually turned to be very attractive deal both for the lender and the company.
You can read the PR here -> http://biz.yahoo.com/prnews/080303/cnm030.html?.v=12. Few highlights from the PR that made it look even more attractive:

Majority of Proceeds to be Used to Drill 100 New Wells in 2008

The average price of the three tranches of warrants is US$2.51 and represents a 17% premium to the closing price on February 27, 2008

Of the 4.8 million warrants, 1.5 million are callable at the option of the Company if after one year the stock price is trading at or above US$4.80 which is 150% of the strike price of $3.20, assuming certain liquidity criteria are also met.

And one of the most important: In connection with this financing, the Company is required to obtain a listing on a U.S. exchange within one year.

Once again, this was a major uncertainty with the company, that kept the price very low, while oil has been reaching new highs. Now, the company is in position to execute its plans, and I believe the stock could appreciate over 100% within a year or less. Long term projections are even higher.

Second update is on Asia Automotive Acquisition Inc. (AAAC.OB) ->

As expected, the company extended the Equity Acquisition Agreement all the way to April 30th, but in reality April 19th is the deadline to complete the acquisition. Jeff Feinberg just disclosed having 24%+ of O/S, which is 4% higher than he had disclosed previously. As mentioned earlier, he continues to buy the stock.

Third update is on Harbin Electric (HRBN) ->

Rough times in the market usually mean rough times for low float, low volume stocks, as they can be easily manipulated. Notice my last note on HRBN: "Stocks with low float like this can react violent in both directions :), especially if market conditions match; therefore, if you are in for the short term - proceed with caution". Well, HRBN always suffers a lot during rough times like DOW -300 last Friday. We broke through $21-$24 range to the downside, and it may take some time to recover. With earnings coming up within a few days or a week, most will be careful and would not risk entering a position here. Long term, it is still a very good investment, and nothing has changed in its long term outlook.

Good luck out there.

Stocks to watch

2008-02-26T23:40:00.003-05:00

I've only briefly mentioned Jinpan (JST) here a few times, although I really like the company and has been trading in and out of this stock for over 2 years. I decided to mention it here, as it's reaching important resistance levels. The volume has increased lately and the stock is approaching all time highs. Unfortunately, $30-$31 has been a road block for JST on numerous occasions, and the stock also likes to move in direction of the market. I would suggest to watch this level closely, as break above $31 would indicate a major breakout on the way. At the same time, monitor market conditions closely - It can go down $2 on very few shares in the down day on the market.

Another one to watch is China North East Petroleum (CNEH.OB) - expected to report record quarter in a few weeks with very nice revenues and profits. Production levels have already been preannounced. The stock has been trading in pretty tight range for some time now. I believe the stock has a good potential to appreciate significantly in 2008 and beyond, especially with oil trading at $100+. Financing is also expected shortly, which should assure that the company has enough money going forward for operations.

Next one on my list is China Grentech (GRRF). In the past few months it reported number of big contract wins in the Chinese wireless sector. Now look at the earnings reported by China Techfaith Wireless Communication Technology (CNTF) today. GRRF is expected to report earnings in couple of weeks (around March 12th). The stock has been trading sideways lately and has a great potential to appreciate from the current levels.

Finally, I have to mention AAAC.OB one more time, as the big blocks continue, and as reported in SEC filings today, Jeff Feinberg and his funds now have roughly 195k more shares than was reported 2 months ago in December. Buying continues, as we wait for the merger to finalize. I think we should see extention of Equity Agreement within a few days, as it seems like the deal will not be made by February 29th. Patience is needed here.

Good luck to all.

Few updates on stocks

2008-02-22T22:35:00.004-05:00

First of all- my favorite stock of 2008 - Asia Automotive Acquisition (AAAC.OB)

Asia Automotive Acquisition, Inc. had an excellent presentation at Roth Capital OC Growth Conference 2 days ago. Listen to it and watch the presentation from here: http://www.wsw.com/webcast/roth16/aaac/

Today, we had biggest volume in the past 4 months - over 400k. Most volume was created by very large blocks. It'll be interesting to see if another investor took a position. Hopefully we'll see filing on this soon.

Also, 2 days ago, they announced guidance for Tongxin International in 2008, and it is impressive. Here is the highlight of the PR: "Earnings guidance is expected to reach $15M. TXI anticipates the Chinese light and commercial vehicle market will continue to grow between 25% and 30% and it will complete an add on acquisition by the end of 2008". In 2007 they will have earnings around $9.5 mil, so this means earnings growth from 2007 to 2008 is 57% (excluding one-time costs associated with acquisition). This is based on 15.3 mil dilluted shares, which puts the earnings close to $1 per share -> roughly PE of 8 at the current price based on 2008 earnings, very impressive growth and additional profitable acquisitions? Can you say - undervalued?

Now on to another undervalued stock -> Harbin Electric (HRBN).

I had to come back to talking about it, as lately the volume on it has been pretty low again, but it has stabilized nicely above $21 and trading in range $21-$24 for some time. Again, just like AAAC.OB, Harbin Electric had a very nice presentation at Roth Capital conference. Here is the link to it: http://www.wsw.com/webcast/roth16/hrbn/

Reiterating revenue forecast of 350 mil in 2010 from just 60's in 2007. Yes, it already tripled from last year, but the next HRBN is HRBN itself. I would not be surprised if we see another triple in 2-3 years. Projected net income of over $3.20 in 2009 is very impressive.

Earnings are expected in 2 weeks. Stocks with low float like this can react violent in both directions :), especially if market conditions match; therefore, if you are in for the short term - proceed with caution. For long term - I don't think there is much to worry about (at this point). Company has been delivering on the promises for some time now.

More updates coming....

Update on Asia Automotive Acquisition (AAAC.OB)

2008-02-19T14:11:00.002-05:00

Asia Automotive Acquisition Inc. is presenting tomorrow at Roth Capital 20th annual OC Growth Stock Conference. Live web cast and powerpoint presentation will be available here:

http://www.wsw.com/webcast/roth16/aaac at 5:30 pm EST.

There is also going to be a Special Panel session on Blank Check Companies (SPAC's) that have announced an agreement to acquire an entity, but not closed as well as selected Blank Check company presentations.

Judging by the volume and activity today, there is an interest in the company now.

Update on Asia Automotive Acquisition (AAAC.OB)

2008-02-06T08:34:00.001-05:00

There was a new filing with SEC yesterday extending Equity Acquisition Agreement expration from Feb.6th to Feb 29th. That makes me believe even more that the merger will be complete this month.

New undiscovered company - China Wind Systems (CWSI.OB)

2008-02-04T20:06:00.000-05:00

Here is another interesting company and completely unknown (in my opinion):

China Wind Systems (CWSI.OB)

Wind Energy sector in China is hot. Here is the unknown company that makes components for wind systems...

It just made a reverse merger, and here is what it is now:

China Wind Systems, through its affiliates, Huayang Dye Machine and Huayang Electrical Power Equipment, manufactures and sells industrial equipment for use in the textile and energy related industries in China. Since August 2007, the Company has shifted its strategy to focus on the growing wind energy industry in China, and has begun to supply high precision rolled rings to companies in the wind power energy industry.

Check out this presentation on their web site:

http://www.chinawindsystems.cn/en/ChinaWind-%20web%5B1%5D.ppt

Read more on this company here:

http://sec.gov/Archives/edgar/data/819926/000114420408005833/v101418_8ka.htm

Few highlights:

9 months of 2006 revenues of the new company: 12.3 mil
9 months of 2007 revenues: 16.5 mil
2006 net income: 1.8 mil (operating income 2.7 mil)
2007 net income: 9.4 mil (operating income 3.9 mil)
Total O/S - 36 mil (earnings are already .26 cents for 9 months of 2007)
float should be tiny...no more than 2 mil, if I got my numbers correct....
Trading at the CURRENT PE of less than 7.

Check out the latest PR from few weeks ago:

http://biz.yahoo.com/prnews/080116/cnw025.html?.v=10

WUXI, China, Jan. 16 /Xinhua-PRNewswire-FirstCall/ -- China Wind Systems, Inc. (OTC Bulletin Board: CWSI - News; ''China Wind Systems'' or the ''Company''), which through its wholly owned subsidiaries manufactures and sells industrial machines for use in the textile and energy related industries in the People's Republic of China, today announced that it has purchased new equipment to expand its forged rolled rings manufacturing capabilities. The $4.13 million purchase was in line with the Company's strategy to focus on the growing wind power industry in China, and was largely funded with the proceeds from its recent private placement financing.

The purchase marks the first step in execution of the Company's expansion plan. In the initial phase, China Wind Systems will focus on producing rolled rings that measure up to 6 meters in diameter as well as other windmill components such as shafts. China Wind Systems plans to purchase additional equipment during phases two and three of its expansion. In phase two, the Company intends to manufacture yaw bearings and gear boxes. In phase three, the Company will manufacture other windmill components such as rotor blades. At the conclusion of its expansion, China Wind Systems will be capable of producing forged rolled-rings, measuring up to 8 meters in diameter and weighing up to 150 tons to suit different applications and processes in the wind power industry.

Recently, China Wind Systems purchased a 4,500-ton hydraulic press for use in its metal forging process to produce shafts that weigh up to 18 tons, used in 2 MW wind turbine units. The Company also acquired a ring rolling mill capable of producing rolled rings measuring up to 6 meters in diameter and weighing up to 12 tons. The equipment will be installed at its new 107,639 square foot facility in Wuxi, Jiangsu Province and the Company expects to start production at the new facility by September 2008. China Wind Systems will utilize the axial closed-die rolling technology in its forging process. The new technology will reduce material waste during the forging process by approximately 35%, ensure high precision and surface flatness, and produce rolled rings with excellent mechanical strength and high flexibility.

''Demand for rolled rings is strong, particularly for larger rolled rings used in the wind power industry. With the addition of our new equipment, we will expand our production capabilities to produce precision rolled rings that measure approximately 6 meters in diameter and shafts that weigh approximately 18 tons,'' said Mr. Jianhua Wu, Chairman and CEO of China Wind Systems. ''We expect the rolled rings segment of our business to increase significantly in 2008, growing from only 8% of revenue in 2007. Once the utilization rate for the equipment reaches 100 percent, we expect to see significant improvement in our overall profitability,'' added Mr. Jianhua Wu.

They are also presenting in this conference:

http://cleanenergynews.blogspot.com/2008/02/third-annual-piper-jaffray-clean.html

Piper Jaffray Conference - Feb 28

as well as Roth Capital conference later this month

Few updates on Asia Automotive Acquisition (AAAC.OB)

2008-02-03T08:50:00.000-05:00

Again, sorry for the lack of updates.

Merger on Asia Automotive Acquisition (AAAC.OB) is getting closer. The proxy was out few days ago, showing February as a month to hold the shareholder meeting to approve the merger. I expect the stock to trade on Nasdaq almost immediately after the final voting. After that, we might see a PR machine similar to another Chardan blank check company that completed its merger (CSCA.OB, which is now APWR). Keep in mind there are at least 4 aquisitions coming, which bring a big portion to net income.

I kept mentioning CSCA.OB (Chardan South) throughout the year, putting it on the same page in terms of potential as YTEC (Yucheng Technologies). If you recall, Yucheng Technologies (CUAQ.OB -> YTEC) went from 7$'s to $15+... We now have CSCA.OB -> APWR to go from $7's to $15+. I expect AAAC.OB to do the same once the merger is complete and it begins trading on Nasdaq. Even though the strike on the warrants is $5, they (AAACW.OB) usually tend to trade lower than that, because of the risks involved in the merger. Once the merger goes through, they will maintain $5 difference between the common, because after the merger, they can be exercised at any time.

Besides great management, strong growth and acquisitions, Asia Automotive Acquisition (AAAC.OB) also has same investors that were on successful companies, such
as Yucheng Technologies (YTEC) and A-POWER (APWR, former CSCA.OB): Jeff Feinberg, who owns 20% of AAAC.OB (he owned over 40% of CSCA.OB).

Once the merger is complete, we will have a company with only 12 mil O/S, roughly 2 mil in float, 66 mil income in 9 months of 2007 alone, and net income of 8.8 mil in 9 months of 2007. It's not hard to figure how undervalued this company is.

Comparing it to the competition, the board currently values the stock at $20's

Good Luck.

Update on Asia Automotive Acquisition Corp (AAAC.OB)

2008-01-09T20:56:00.001-05:00

Sorry for the lack of updates. I've been on long vacation and was taking a little time off the market.

Looks like our wait on AAAC.OB might be over soon.

Great news - New filing yesterday:

http://www.sec.gov/Archives/edgar/data/1332552/000095012408000065/k22454a3sv4za.txt

Highlights:

The board of directors of Asia Automotive Acquisition Corporation ("AAAC")
and its wholly-owned subsidiary, Tongxin International Ltd. ("TXI") have
unanimously approved the acquisition of the shares of Hunan Tongxin Enterprise
Co, Ltd. ("Hunan Tongxin") in the People's Republic of China, pursuant to a
Equity Acquisition Agreement whereby AAAC will purchase all of the outstanding
shares of common stock of Hunan Tongxin held by the stockholders (the "Hunan
Tongxin Stockholders"). The board of directors of AAAC also has unanimously
approved the simultaneous reincorporation of AAAC from the State of Delaware to
the British Virgin Islands, through a redomestication merger with TXI.
The date for the special meeting of shareholders related to proposed merger has been set for January 24th, 2008. Proxy is being mailed to all shareholders now.
AAAC's common stock, warrants and units are currently listed on the
Over-the-Counter Bulletin Board under the symbols AAAC, AAACW and AAACU,
respectively. TXI has applied to have its securities listed on the Nasdaq Global
Market effective at the time of the redomestication merger. The proposed
symbols are TXIC, TXICW and TXICU.

Make sure to weigh your risks associated with the merger. Good luck to All!

P.S. Note on Harbin Electric (HRBN) - The stock reached $28.00 few days before a big pullback, making it an official 250% gainer in 12 months since the original recommendation at $8 in January. I'm now considering dropping it from the list of undiscovered stocks, as it is "on the charts" now. I will probably provide one last update on it shortly.

Few updates

2007-12-12T19:38:00.000-05:00

It has been over a month without any updates. I have not had any new good long term picks, that I consider undiscovered and worth mentioning here. But, I would like to provide an update on a few stocks, that have been mentioned on this blog before.

First of all, an update on my favorite stock of 2007 - Harbin Electric Inc. (HRBN):

Harbin Electric Inc. presented at Roth China Conference on November 29th, 2007. You can listen to the presentation, which also contains slides, from here -> http://www.wsw.com/webcast/roth14/hrbn/. There is really nothing new to report on this company. It just continues to be a great performer in 2007.

This is the my original post on HRBN from January of 2007: http://undiscoveredstocks.blogspot.com/2007/01/hrbn-harbin-electric.html. Back then, the stock was trading on OTC:BB at $8, practically without any volume. What do we have today (less than a year later)? It closed at all time high of $22.54 on pretty good volume for this low float stock. (nearly 250k traded). The volume has been on a rise in the past week, as the stock began its move towards new highs. So far, the total gain on this stock is roughly 181% so far this year, and I still believe it has a great potential in 2008 and beyond.

Quick update on what I believe might become the stock of 2008 - Asia Automotive Acquisition Corp (AAAC.OB, AAACW.OB):

There is a big investor (Jeff Feinberg), that's been buying the shares of AAAC.OB almost on daily basis for the past month and more, and has now accumulated 20% of all O/S. All filings are here: http://www.sec.gov/cgi-bin/browse-edgar?company=asia+automotive&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany.

You can also check that he has 20% of O/S from here:

http://www.sec.gov/Archives/edgar/data/1088219/000091957407005742/d835788_13-d.txt

Just to give you an idea of what his last investment did - take a look at the CSCA.OB -> he has been accumulating this one as well, and, according to the latest filings now has over 38% of O/S. The stock (CSCA.OB) has moved from $7's to over $13's in a short peroid of time and has been steady at that level.

For more info on AAAC.OB, please go back to my archives for October and November of 2007, and read a summary of my DD from October that was published on SeekingAlpha -> http://www.seekingalpha.com/article/51672-eye-on-asia-automotive-acquisition-corp.

Finally, there is another stock that is worth mentioning here, as I believe this one could be a great long term hold. It does have a decent volume, so I can't say it's undiscovered, but at the same time I believe it has not reached "Discovered" level either. The company is China North East Petroleum (CNEH.OB). I will provide a small summary on this a little later tonight or tomorrow.

Good luck and remember - always do your own DD.

Update on Asia Automotive Acquisition (AAAC.OB)

2007-11-05T08:13:00.001-05:00

The company announces financial results of merger partner:

Asia Automotive Acquisition Corporation Announces Unaudited Financial Results of Merger Partner for the Three and Nine Months Ended September 30, 2007
Monday November 5, 8:00 am ET
Q3 Revenue Increases 43% to $21.8 Million from $15.2 Million
Q3 Net Income Increases 39% to $2.5 Million from $1.8 Million at 9/30/2007

http://biz.yahoo.com/prnews/071105/clm059.html?.v=101

NEW YORK, Nov. 5 /PRNewswire-FirstCall/ -- Asia Automotive Acquisition Corporation (OTC Bulletin Board: AAAC - News, AAACU - News, AAACW - News; "AAAC"), announced today the unaudited financial results for the three and nine months ended September 30, 2007 for its merger partner, Hunan Tongxin Enterprise Co., Ltd. ("Tongxin") (see attached table). As previously announced on July 25, 2007, AAAC signed an Equity Acquisition Agreement with Tongxin pursuant to which Tongxin and AAAC will merge into a newly created British Virgin Islands company, Tongxin International, Ltd.

For the three months ended September 30, 2007 Tongxin had:

* Revenue of approximately $21.8 million, an increase of 43% from $15.2
million for the same period in the prior year;

* Operating income of approximately $4.1 million, an increase of 41%
from $2.9 million for the same period in the prior year;

* Net income totaled approximately $2.5 million, an increase of 39% from
$1.8 million for the same period the prior year.

For the nine months ended September 30, 2007 Tongxin had:

* Net Income of $7.75 million, an increase of 102 % from $3.83 million
for the same period in the prior year. Net income for the current
period excludes one time costs of $230,000 for legal, accounting and
audit fees associated with the proposed transaction with AAAC.

* EBITDA of $14.6 million, or 23.2% of net revenues

p

Update on Harbin Electric (HRBN)

2007-10-31T21:16:00.000-05:00

Here are the News that are not available on the wires yet - only for subscribers to AutomotiveWorld:

http://www.automotiveworld.com/ACM/content.asp?contentid=64520

China: Harbin Electric secures supply order from Intier Automotive
By Automotive World staff writer (SS)
31 October, 2007
Source: Automotive World
Harbin Electric has secured a five-year contract to supply micro motors to North American automotive component manufacturer Intier Automotive, reports Automotive News China. Intier will in turn supply the micro motors to Chrysler LLC.

-------------
This is very big. Let's see a PR on this with more details shorly....

Last Update on CEUC.OB (now CAST)

2007-10-29T10:33:00.000-05:00

CEUC.OB is now trading on Nasdaq as of today. New symbol is CAST. It had another massive gain today. Volume looks very good. It has now doubled from the lows and has been found by the masses. I will no longer provide any updates on this company, as it no longer satisfies my "undiscovered" condition.

Good luck!

Another Update on Asia Automotive Acquisition (AAAC.OB)

2007-10-27T19:30:00.001-05:00

Just wanted to show the Board of Directors and Executive Management at Close of Transaction:

William R. Herren, Director, Chairman of Tongxin International, Chief Executive Officer
- 35+ years automotive experience including both vehicle and component operations; including 15 years corporate finance
- Profit/loss responsibility for several Delphi business units
- Directed M&A activities resulting in over $250 million in investments in Asia in mid 90s

Rudy Wilson, Director, Chief Operating OFficer in Tongxin International
- 33+ years automotive experience including 3 years living and working in China
- Served on several Chinese joint venture boards in various director capacities
- Responsible for identifying growth opportunities for new Chinese JVs

Dr. David J. Brophy, Chief Financial Officer, Secretary
- A member of the Finance Faculty at the University of Michigan School of Business Administration from 1968 and Director of its Center for Venture Capital and Private Equity Finance since 1992
- Advisory and consultant activities in the public and private sector include such funds as Compass Technology Partners, Plymouth Ventures, and Bio-Star Ventures and various government agencies in the US, Australia and France
- He is a founding member of the editorial board of the Journal of Private Equity and the International Journal of Venture Capital

William Zielke, Director
- 25+ years automotive M&A experience including 14 years experience in the China automotive market
- Served on boards with supplier firms in China, Saudi Arabia, Mexico, Belgium and Korea
- Authored board training modules and conducted training

William A. Ebbert, Director
- Formerly Executive-in-Charge of Delphi Automotive Asia Operations
- 35+ years automotive experience in finance and planning
- Directed Delphi Corporate start-up activities in Asia Pacific

Pilar Abliac-Murillo, Director
- Director of Remy International Mexican manufacturing operaions
- 25+ automotive experience including assignments in Europe and North America
- Manufacturing and HR focuses assignments

Zhang Ruanxiang, Director, Chief Executive Officer of Hunan Tongxin, Vice Chairman of Tongxin International
- Founded Hunan Tongxin in 1984
- Has been recognized twice as one of the top 10 economic outstanding business executives and once as an excellent private enterpreneur in Hunan province.
- also the committee member of China Private Enterpreneur Association and premier vice president of Hunan Private Enterpreneur Soceity

Peng Weiwu, Director, Chief Operating Officer of Hunan Tongxin
- 20+ years with Tongxin helping to grow the company
- Responsible for improving Tongxin's production process and enhancing product development resulting in the development of 128 brand products and 9 product series in the past 22 years
- Recognized by the China in Institute of Technology in 2003 for developing Tongxin's "Thin Stamping Process and Design Theory in Vehicle Manufacturing Application"

Al Xing, Director
- Background in Mechanical Engineering
- 15+ years electronics software experience in both the uS and China
- Currently employed with IBM (Canada)

Xiao Tangbing, Director
- Background in business administration
- 30+ years experience in China's machinery and electronics controls industry
- Currently chairman and general manager of Changsha Machinery and Electronic Equipment, Inc.

Update on Asia Automotive Acquisition (AAAC.OB)

2007-10-27T09:36:00.001-05:00

I would like to present an additional information on Asia Automotive Acquisition (AAAC.OB). For the most part, it is based on the proxy statement filed by the company one month ago. Here is the link:

http://www.sec.gov/Archives/edgar/data/1332552/000133255207000027/proxytest4.txt

Now, some important points from this proxy:

First, comparison to the other companies in the industry, according to the board:

Overall the Company examined 65 automotive supplier firms traded on United
States stock exchanges.Subsequently eight companies were selected based on
their single or dual focus technical competency which is similar to that
of Hunan Tongxin. Additionally, we analyzed gross and net Income margins
and revenue growth rates. The board then examined the forward price earnings
ratios of these companies. The median and mean forward price earnings ratios
for the eight companies were 17.7 and 22.4, respectively. The board used
this range of price earnings ratios as the most representative.

The board made several assumptions in deriving statistics about Hunan Tongxin
that were used solely for the purpose of management's determining a value of
Hunan Tongxin. Investors should not place any weight on these projections,
because any projection is subject to many assumptions, some or all of which
may not be correct or occur as assumed. The assumptions were for the
projection of net income for 2007. The net income assumption for fiscal year
2007 was $9.5 million. The projected net income for 2007 was determined to be
reasonable in light of the net income for 2006 of approximately $5.7 million,
and the level of existing and new contracts at the time the assessment was
made. The level of contracts has increased significantly from 2006 to 2007.
Hunan Tongxin has long-term debt of approximately $5.2 million and and cash
and marketable securities of approximately $5.9 million as of June 30, 2007
and it is assumed that it will not leverage the business going forward.

The starting point was to determine enterprise value of Hunan Tongxin, which
was derived by the following formula: enterprise value equals market
capitalization, plus long term debt, plus preferred equity, minus cash and
cash equivalents. Using this formula, the board of directors arrived at a
projected enterprise value for Hunan Tongxin of $169,100,000 for 2007. This
was derived using a market capitalization of $168,150,000 an amount
determined by taking the fair market comparable capitalization using an
implied market capitalization equal to a comparable price earnings ratio of
17.7 multiplied by the assumed earnings of Hunan Tongxin for 2007 of
$9,500,000. There is anticipated to be no additional long-term debt in 2007
over the existing $5,300,000 and no preferred equity issued and outstanding
in Hunan Tongxin. Cash and cash equivalents of Hunan Tongxin for 2007 were
assumed to be $5,900,000 resulting from Hunan Tongxin's ongoing operations.

Based on the assumed 6,380,250 shares that will be outstanding upon
completion of the Equity Acquisition, the Board computed a per share price
of $26.50, or approximately $19.06 above the redemption value of AAAC's
common stock (approximately $7.60). Stockholders should note that these
evaluation computations are not predictions of the actual market price of
AAAC either upon consummation of the transaction or at any time after that.

The AAAC board of directors believes because of the financial skills
and automotive background of all of its directors, it was qualified to
make this analysis itself and conclude that the acquisition of Hunan Tongxin
met this 80% test requirement without recourse to an independent source.
The entire AAAC board of directors is comprised of directors with extensive
experience in analyzing acquistion targets and assessing their future values.
AAAC officers William R. Herren and Rudy Wilson have been involved in
identifying and completing seven investment projects in China with over $250
million in direct investment while employed at General Motors. David J.Brophy,
leads the University of Michigan's Private Equity and Entrepreneurship Center
and brings considerable independent expertise in this area. Donald L. Runkle
brings experience from numerous global acquisitions during his tenure at
Delphi Automotive.

Now, the background of the company being acquired:

BACKGROUND

Hunan Tongxin is the largest independent Chinese supplier of Engineered
Vehicle Body Structures ("EVBS") capable of providing products for both
light and commercial vehicles in addition to designing, fabricating and
testing dies used to stamp automotive body panels. EVBS consists of
exterior body panels including doors, floor pans, hoods, side panels,
fenders. Hunan Tongxin also manufactures complete cab structures for
commercial vehicles. Hunan Tongxin's components must meet exacting
dimensions for fit and finish before they are assembled and finally
painted. These capabilities enable Hunan Tongxin to participate
effectively in all sectors of the Chinese automotive market including
light and commercial vehicles.

STRATEGY

Hunan Tongxin captured approximately 7% of the independent EVBS market
in 2005 and plans to increase its share to 20% by 2010. It anticipates
entering the North American and European collision parts aftermarket
based on what it perceives to be products that are comparable to those
of other automotive suppliers but selling at prices that will give it
a competitive advantage.

Hunan Tongxin's goal is to become one of the world's premier EVBS
companies.

The principal elements of its core business strategies are so
follows:

* Maintaining its leadership position in China's EVBS

* Enhancing the leadership position in die design and fabrication.

* Increasing value added content for cab assembly.

* Focusing on high-value EVBS design services

Since 2004 Hunan Tongxin had successfully expanded to the following
Southeast Asia exports markets:

* Vietnam EVBS market

* Cambodia EVBS market

More updates will come soon....

Update on Chinacast Education (CEUC.OB)

2007-10-26T15:36:00.000-05:00

As mentioned earlier this morning, Chinacast is to be traded on Nasdaq. PR has just been released at 3pm EST as expected:

http://biz.yahoo.com/pz/071026/129805.html

ChinaCast Education Corporation Announces Transfer of Shares to the NASDAQ Global Market From the OTC and New Ticker Symbol: 'CAST'
Friday October 26, 3:00 pm ET

BEIJING, Oct. 26, 2007 (PRIME NEWSWIRE) -- ChinaCast Education Corporation (OTC BB:CEUC.OB - News), one of the leading e-learning and training services providers in China, today announced that it received approval to move its listing from the OTC to the NASDAQ Global Market.
ADVERTISEMENT

Trading of ChinaCast's common shares, warrants and units on the NASDAQ Global Market will begin at the market opening on Monday, October 29, 2007, under the new ticker symbols ``CAST,'' ``CASTW'' and ``CASTU'' for common shares, warrants and units respectively.

Ron Chan, Chairman and CEO of ChinaCast commented, ``We are very pleased to have our shares commence trading on the NASDAQ Stock Exchange, which we believe is recognized around the world as one of the largest and most respected U.S. markets as well as having very high listing standards. We hope that this will enhance the volume and tradability of ChinaCast shares thereby benefiting our shareholders.''

--------------------------------------------------------------------
I will probably drop CEUC.OB (CAST on Monday) from the list of undiscovered stocks, as I believe it has been discovered, judging by the latest volume and the news of Nasdaq listing.

Update on Chinacast Education (CEUC.OB)

2007-10-26T09:24:00.000-05:00

Looks like CEUC.OB has just been approved for Nasdaq according to this SEC document filed last night:

http://www.sec.gov/Archives/edgar/data/1261888/000095013407021980/f34850e8va12b.htm
Expecting PR on this now....

Also take a look a this nice write-up. Sums up my earlier research and more:

http://seekingalpha.com/article/51338-chinacast-education-undiscovered-undervalued-underplayed

Update on AAAC.OB

2007-10-25T11:38:00.000-05:00

Yesterday, there was a big block in the warrants - AAACW.OB - 380k. Today another decent block in common - 75k. I expect another filing on these transactions soon. Seems like a continuous accumulation. Company is completely under radar at this point.

Asia Automotive Acquisition Corp (AAAC.OB) - DD

2007-10-18T18:49:00.000-05:00

As promised, here is full DD on new pick: Asia Automotive Acquisition Corp (AAAC.OB), which also has warrants AAACW.OB.

This is a blank check company (similar to how YTEC, SEED, HLSYF, and many other chinese companies started)>

I'm going to start of with this link:

http://www.sec.gov/Archives/edgar/data/1332552/000136231007002247/c71230exv99w2.htm
This link shows their presentation of the upcoming acquisition of Hunan Tongxin Enterprise.

Couple of highlights:

Revenue growth of 47% from 2004-2006
Growth of 28% in first half of 2007 over first half of 2006
Gross margin increase from 29.9% to 35.5%
EBITDA increase from 16.7% to 24.1%
95% increase in net income from first half of 2006 to first half of 2007
Target net income in 2007 -> 9.5 mil (12.8 mil total O/S after the transaction and including incentives of 2 mil for reaching net income target) ...giving the total net earnings of 0.74 in 2007.
Total O/S after acquisition -> 12.8 mil including incentives, float is roughly 5 mil
Will seek NASDAQ listing after acquisition is complete
Additional 4 potential acquisitions are coming
Very experienced management with each having over 25/30 years experience in automotive industry

Now, as recent as last week, Jeff Feinberg bought a big chunk of shares increasing his share to 18% of current O/S. (total of just over 1 mil shares now owned by him)

http://www.sec.gov/Archives/edgar/data/1088219/000091957407004751/xslF345X02/p788846a_ex.xml
Couple of financial facts from new company:

On a historical basis, Hunan TX Enterprise Co. Ltd(TX) had audited revenues of $66.6 million in 2006 compared to $58.8 million in the previous year, an increase of 13.3% and earned net income of $5.7 million in 2006 compared to $752k in the previous year, an increase of 658%.

As a performance incentive, 2 million shares will be issuable to TX management on an all or none basis by March, 2008 in the event that TX attains 2007 net income of $9.5 million, which would represent a 66.7% increase from 2006.

For the first six months of 2007, on a reviewed basis, TX had revenues of $41.1 million compared to $32.8 million in the same period in 2006, an increase of 28%. In the same periods, net income rose to $5.3 million from $2.7 million representing an increase of 94%.

This is taken from here: http://biz.yahoo.com/prnews/070918/cltu069.html?.v=96

Now, let's recap - in 2006, net income was $5.7 million. In first half of 2007 alone, they already had net income of $5.3 mil, increase of 94% over last year. They expect to have a net income of $9.5 mil with only 12.8 mil O/S after incentives and transaction. Stock is currently trading at $8, with PE for 2007 of less than 12. With the growth they have, they should be trading a lot higher once the transaction is complete, and they trade on NASDAQ.

This is exactly how YTEC (former YCHTF.OB started), which I highligted back in January of 2007. The number here are even better.

Warrants have an expiration date of April 11, 2012 - PLENTY of time, making it very safe buy. They have a strike of $5.

Do your own DD and good luck.

New - Asia Automotive Acquisition Corp (AAAC.OB)

2007-10-18T12:57:00.000-05:00

Another potentially attractive chinese merger / acquisition with recent impressive buys by Jeff Feinberg is Asia Automotive Acquisition Corp (AAAC.OB and AAACW.OB)

They are acquiring profitable company - Hunan TX Enterprise Co., Ltd., with explosive growth. I will have a complete DD on this later tonight.

Update on Harbin Electric (HRBN)

2007-10-16T18:20:00.000-05:00

Harbin Electric (HRBN) stock retreated from its highs for some minor profit taking. It used market weakness as an excuse. I believe this is just a small bump. Nothing has changed. With a possible strong day in the market tomorrow, we may see another jump in HRBN.

Update on CEUC.OB

2007-10-16T18:16:00.000-05:00

A while ago, I profiled ChinaCast Education (CEUC.OB). You can find corresponding research in the earlier blog posting. Unfortunately, it completely dropped out of radar for many and it was slowly drifting down. In the past week, the stock made a big comeback, in large due to pretty good presentation posted on SEC site:

http://www.sec.gov/Archives/edgar/data/1261888/000117184307000548/exh_991.htm

But here is another kicker. Tomorrow's IPO - NED is in China Education sector, which will prompt others (already did) to search for sympathy plays. Chinacast Education (CEUC.OB) is definitely one of them. Again, refer to the previous posting for more information about this company.

Update on Harbin Electric (HRBN)

2007-10-10T22:02:00.000-05:00

I remember back in the days, YTEC was barely trading 30k a day when I first mentioned it 9 months ago....sometimes even less....it traded that much for very long time....now 100%+ higher, people are jumping all over it with at least 1mil a day.

I dropped YTEC from the list of undiscovered stocks now, as I mentioned few days ago, but HRBN is still here. It barely gets 100k day. With its float less than 4 mil, and just awesome fundamentals, earnings and revenues projections, and trading near all time high, I see it's just waiting to make a significant move.

Notice how very small fluffy PRs move the stocks lately? SEED - latest example. Company with not so good earnings announced earlier, moved up 60%+ today on very small PR that it's named as one of 200 (!!!) companies of some list.

Or CHNR going up on just pure momentum without any real news.

Imagine when HRBN releases good PR as it always does. It's not a question of "if". It's just a question of "when". Volume of anything over 300k will take it very high. For now, it still remains an "undiscovered" stock.

Update on Conrad Industries (CNRD.PK)

2007-10-09T21:00:00.000-05:00

From TA Perspective, chart is ready for a massive breakout. Perfect "Cup and Handle" has been formed. Take a look: http://stockcharts.com/h-sc/ui?s=cnrd

The breakout coupled with pre-earnings run may take the stock up really high from the current $17's levels...

NEW - Jaguar Acquisition Corporation (JGAC.OB)

2007-10-09T14:15:00.000-05:00

This one is very risky play as there are still many unknowns. So, highly speculative stock. Use extreme caution.

STV - China Digital TV Holding opened on NYSE with the boom...going from roughly $30 to $55 in 2 days. China TV market is hot.

Well, look at this company - Jaguar Acquisition Corporation. (JGAC.OB).
They just announced letter of intent to acquire China Cablecom Ltd.

Expecting news on this within 2 weeks according to the PR below:

http://biz.yahoo.com/iw/070927/0307525.html

Jaguar Acquisition Corporation Announces Letter of Intent to Acquire China Cablecom Ltd.
Thursday September 27, 8:00 am ET

Jaguar Intends to Enter the Rapidly Growing Cable TV Sector in China; China Cablecom Is an Emerging Consolidator of Cable TV Operating Companies Focused on China's Shandong Province; China Cablecom Raises $20 Million Bridge-Financing to Secure Acquisition

CONSHOHOCKEN, PA--(MARKET WIRE)--Sep 27, 2007 -- Jaguar Acquisition Corporation (OTC BB:JGAC.OB - News), a special purpose acquisition company ("Jaguar"), today announced a Letter of Intent ("LOI") to acquire all of the issued and outstanding shares of China Cablecom Ltd., a British Virgin Islands company, ("China Cablecom"), an emerging consolidated cable network operator in the highly populated Shandong Province in the People's Republic of China (PRC). To secure this proposed transaction, China Cablecom has raised $20 million of debt and equity bridge financing. Chardan Capital Markets acted as placement agent in the transaction.
ADVERTISEMENT

The Company anticipates providing further details on this proposed transaction in the next two to three weeks.

Pursuant to the provisions of its certificate of incorporation, the Company now has until April 13, 2008 to complete its business combination, having satisfied the criteria for extension set forth in the certificate of incorporation. The Company anticipates signing a definitive agreement relating to its business combination within the next 30 days

Again, use extreme caution and do your own DD.

Update on Conrad Industries (CNRD.PK)

2007-10-08T23:20:00.000-05:00

Just a quick note update on Conrad Indusries (CNRD.PK). Seems like the new base has been set at around $16.80. Breaking above $17.50 will indicate a major breakout. This is just a TA. The quarterly earnings will probably be released in a little over a month. So, I definitely expect a run the closer it gets to the earnings date. Nevertheless, daily fluctuations don't really matter, as this is a long term play with its current value at least $30 dollars, being undervalued only due to its PK status.

T-Bay Holdings Inc. (TBYH.OB) - New

2007-10-05T17:51:00.000-05:00

This week we saw a big jump in shares of Orsus Xelent Technologies Inc (AMEX:ORS), designer and manufacturer of award-winning mobile phones for the Asian market, due to their PR regarding updated forecasts.

Well, here is really undervalued and underfollowed stock, which found just a little bit of interest today and moved quickly before retreating on profit taking. This one could really appreciate much higher on its fundamentals along.

Here is the profile:

T-Bay Holdings, Inc., through its subsidiaries, provides a range of mobile handset design and other services to mobile handset brand owners in the People's Republic of China. It offers mobile handset design, industrial and mechanical design, software design, hardware design, and other design services, including GPS device, auto communication system, and radio frequency design. The company also manufactures components, including printed circuit boards and printed circuit board assembly, and whole mobile handsets, as well as after-sale maintenance services. T-Bay Holdings has strategic partnerships with VIA Technologies, Inc.; MediaTek, Inc., Ltd.; Anyka, Inc.; Infineon, Inc.; and Skyworks. It sells its products primarily in southeast Asia, eastern Europe, and Latin America. The company is based in Shanghai, the People's Republic of China.

First, some numbers ->

ORS O/S - 29 mil , float 5 mil
TBYH.OB O/S - 30 mil, float 11 mil

ORS -> Revenues for last year - 68 mil, net income - 6.7 mil, EPS - 0.24
TBYH.OB -> Revenues for last year - 35 mil, net income - 12 mil, EPS - 0.41

TBYH.OB is also projected to make 0.62 this year, and 1.01 next.

But enough of comparison. TBYH.OB does more than just mobil handset design.

Here is interesting PR:

http://biz.yahoo.com/prnews/070726/cnth013.html?.v=33

TBYH Expects Revenue Growth of 30-40% in FY07-08
Thursday July 26, 9:00 am ET

SHANGHAI, China, July 26 /Xinhua-PRNewswire-FirstCall/ -- T-Bay Holdings Inc. (OTC Bulletin Board: TBYH - News) today announced that for fiscal year 07-08, it expects the revenue growth in the range of 30%-40%, and net profit growth of 20-30%. The Company anticipates growth would be mainly attributed to additional design solutions it expects to introduce in the market, the continued strong performance of our existing customers and planned new projects including 3G products.
ADVERTISEMENT

The Company plans to release more than 30 total design solutions based on 4 chipset platforms in fiscal year 07-08, compared to 21 solutions based on one platform in fiscal year 06-07. This represents an anticipated 42.9% growth, and should enable the company to provide solutions covering high-end, mid-end and low-end markets.

Mr. Xiaofeng Li, the CEO of T-Bay said, "Our partnership with MTK, VIA, ANYKA, INFINEON, SKYWORKS has broadened our product lines. For the last fiscal year, we have made considerable investment in upgrading our equipment to improve our R&D capacity. We intend to continuously introduce new solutions with the world's most advanced technologies.''

''Another driver of revenue growth is from our existing customers. Currently, we have about 50 customers, most of whom performed well in the past few months. Based on the volume of purchase orders from our customers, we believe some of our big customers are gaining more market share,'' Mr. Li added. ''We have a diversified customer base which includes mobile handset manufacturers, brand name owners and distributors. We also expect to cooperate with telecom operators in the foreseeable future.''

"In addition, we expect new projects, including the RF design project, 3G extended products, as well as our new Fujian plant, will bring additional revenue from Q3 this year,'' Mr. Li said. ''We successfully achieved 38% growth in revenue with 21% growth in net profit for FY06-07, and we expect another good year with revenue growth of 30-40% and net profit growth of 20- 30%.''

Finally, I believe they also are trying to get to Nasdaq. I will check on that.

This is very undervalued chinese play that is trading at the trailing PE of 8.
And at forward PE of just above 3 for 2009.

It has very thin trading, not many follow it. So, be careful.

Make your own decisions. Good luck.

Update on few stocks

2007-10-05T17:39:00.000-05:00

Just an update on some stocks -

Since YTEC has now consistently showing decent volume, I'm dropping it from the list of undiscovered stocks and will no longer provide updates on it.

HRBN and CNRD.PK are still trading on very low volume. I believe they both still have a great potential. You have to really be careful with low volume low float stocks.

Updating the post on September 26th, when I said once HRBN breaks through 14.50-15.00 level, we'll see first target of $19. Well, this week it reached that target. This is only first target just on technical breakout. Once it starts releasing news and the volume picks up, we'll see well north of $21 level.

Please do your DD before jumping in to these low volume stocks.

Update on Harbin Electric (HRBN)

2007-10-04T21:22:00.000-05:00

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.

Update on YTEC (Yucheng Technologies)

2007-09-26T18:17:00.001-05:00

Looks like YTEC has finally caught the chinese momo. Earlier DD has been provided since beginning of the year actually, but it didn't seem to move the stock. It seems that it took serious chinese momo to finally move the stock towards new all time high on very high volume for this stock.

Just to recap its financials: Roughly 38 mil in cash, no debt, O/S = 16.9 million, float is roughly $10.35 million. Projected growth is around 40%; now has 3 analysts covering the stock - Maxim Group and ROTH Capital with Buy Ratings, and Avondale Partners with Outperform rating. Average 12 month target on these analysts is $13.50

Projected profits by the company in upcoming years:

2007 US$8.5 million
2008 US$11.9 million
2009 US$16.7 million
2010 US$23.3 million

Recently Yucheng Technologies Limited announced Strategic Online Banking Contract Win with Hangzhou City Commercial Bank. Prior to this, they have begun initial working relationships with several other major city commercial banks including Bank of Beijing, Bank of Shanghai, Bank of Nanjing and Shenzhen Ping An Bank. Here is the recent news release: http://biz.yahoo.com/prnews/070924/cnm018.html?.v=18

It's hard to say where the momentum will take stock, but one thing for sure - it's finally getting discovered. Good luck!

Update on Harbin Electric (HRBN)

2007-09-26T18:15:00.000-05:00

Harbin Electric has been releasing great news after great news. Projected revenues update in the last PR was great and exceeded my estimates. It has a low float, and thus its trading could be sideways for some time, until it catches either momentum or another great PR is released. Nevertheless, it's a great long term hold, which may have bumps here and there.

Technical analysis of the chart - $14.50 - 15.00 is a major resistance area. Once it pushes through this area, I believe we should see a nice upside. I'm expecting to see $19 as the first target from these levels.

Update on Conrad Industries (CNRD.PK)

2007-08-06T20:37:00.001-05:00

First, I'll recap my original message on April 10th (only 4 months ago), when CNRD.PK was trading at $6.50. And then, I'll update it with the latest earnings and new targets. I think it's important to look back at April's message to see what has changed and to check the amazing growth in just 4 months....So, here is the April 10th message:

-------------------------------------------------------------

Highly profitable company reported excellent earnings today.

http://www.pinksheets.com/pdfservlet?id=10409

Excerpt from this release:

REPORT TO OUR FELLOW SHAREHOLDERS
The positive changes we began to experience in the latter part of 2005 continued during 2006 as we completed the year with record
revenue, net income, and backlog, and a much improved balance sheet. At the same time our workforce achieved an outstanding
safety record.

Although, between 2002 and the first half of 2005 we experienced a difficult Gulf of Mexico energy marine construction and repair
market, we have seen in 2006 a major increase in projects for other commercial customers as well as an increase in energy projects.

Because much of our repair work comes from the Gulf of Mexico oil and gas industry, improved conditions in that industry have
positively affected our repair segment. For 2006, 45.5% of total revenue was energy related, 38.5% was other commercial and
16.0% was government. This compares to 22.6% energy, 38.2% other commercial and 39.2% government in 2005.

During 2006, we added $113.1 million of new contracts to our new construction segment, of which $42.3 million was related to the
oil and gas industry and $70.8 million was related to other commercial projects, generally attributable to increased spending for
construction activities, double skin tank barges, and harbor tugs. As a result of this increased activity, margins have improved on
recent new construction contracts. Our backlog as of December 31, 2006 was approximately $84.5 million compared to $35.4
million as of December 31, 2005. At December 31, 2006, 63.3% of our vessel construction backlog was from other commercial
contracts, 31.7% was from energy related customers and 5.0% was from government contracts. This compares to backlog at
December 31, 2005 of 38.4% other commercial, 0.0% energy, and 61.6% government.
Our construction projects in progress as of December 31, 2006 consisted of 34 vessels which includes two 124-foot towboats, five
double-skin tank barges, an ST tug, three z-drive tugs, a 200 class liftboat, five 175 class liftboats, a 3300 hp steel towboat, and
sixteen barges ranging in size from 120 feet to 160 feet. Our customers comprise a very diverse group that crosses a wide range of
businesses including the energy sector, dredging, construction, towing, and bunkering markets, as well as the US Army Corps of
Engineers.

During 2006 we delivered 30 vessel construction jobs of various types and sizes which are the most jobs delivered in one year by
our Company. We delivered nine deck barges, an anchor scow, four crane barges, two inland double skin tank barges, four spud
barges, three double skin tank barges, three landing barges, a fish stocking vessel, an aluminum fire and patrol boat, and two inland
tow boats.

During 2006, revenue increased 88.4% to $121.8 million from $64.7 million in 2005. The increase in revenue for the current year is
primarily a result of the overall increase in production hours. Vessel construction hours increased 73.0% compared to 2005, while
repair and conversion hours increased 125.2% compared to 2005.
We reported net income of $5.9 million and net income per diluted share of $0.81 for the year ended December 31, 2006 compared
to net income of $111,000 and income per diluted share of $0.02 for the year ended December 31, 2005. This increase in net income
is primarily the result of a very strong market for our repair services.

We revised our loan agreement and extended our maturity date to 2011 and increased our line of credit to $10 million. We reduced
our total loan balance from $18.3 million at December 31, 2005 to $10.2 million at December 31, 2006 while increasing our net
working capital from $6.3 million at December 31, 2005 to $7.6 million at December 31, 2006.

Our Company is very different today compared to a few years ago. We have a more diversified customer and product mix. We’ve
expanded our capacity with the investments that we’ve made and we’ve grown our workforce and management in order to handle
the additional production levels. With an improved marine environment, the strong support of our loyal employees, customers and
suppliers, our record new construction backlog and stronger financial condition, we are optimistic about our continuing ability to
increase gross profit and the bottom line in 2007, leading to an increase in shareholder value.

To sum it all up:

Net income for 2006 is 0.81 compared to 0.02 for 2005 (5.9 mil vs 111k)

Revenues increased 88.4% to $121.8 million from $64.7 million in 2005

EPS progression through 2006 is as following:
.13, .17, .19 and .32 for Q1 through Q4, respectively. Earnings are fully taxed and diluted.

Backlog up to $85M versus $35M yoy. And that's for new constructions...
Doesn't even include repair revenues (which account for 40% of total revenues)

Could be at least $1.2 in earnings for 2007 for $7 dollar stock....
At highly convservative PE of 10, this should be at least $12 dollar stock....

Add to this, low O/S and float (momo)

O/S is only 7.28 mil

Last, but not least, it's a hurricane stock with potentially big hurricane season on the way.

Profile:

Conrad Industries, Inc. engages in the construction, conversion, and repair of various marine vessels for commercial and governmental customers in the United States. It also engages in the fabrication of modular components of offshore drilling rigs; and floating, production, storage, and offloading vessels. The company constructs various steel and aluminum marine vessels, including large and small deck cargo barges, single and double hull tank barges, lift boats, push boats, towboats, offshore tugboats, and offshore supply vessels. Its conversion and repair of steel and aluminum marine vessels consist of lengthening the mid-bodies of vessels, modifying vessels to permit their use for a different type of activity, and other modifications to increase the cargo carrying capacity or functionality of a vessel. The company operates four shipyards in South Louisiana and Texas with direct access to the Gulf of Mexico. Conrad Industries was founded in 1948 and is based in Morgan City, Louisiana.

They used to be listed on Nasdaq, but were not profitable, and chose to delist in 2005 due to Sarbanes Oxley expenses.....
Now, that they are highly profitable, they may try Nasdaq again, in my opinion.

Once again - highly profitable, low float, low O/S, hurricane momo, unknown play...just repoted huge earnings.

References:

http://www.pinksheets.com/quote/finance.jsp?symbol=CNRD

--------------------------------------------------------------------------------

Now, here is an update as of August 6th, 2007:

The stock is now up approximately 170% since original recommendation in April.
Late Thusday of last week, they reported huge earnings:

http://www.pinksheets.com/otciq/ajax/showFinancialReportById?id=11384

They reported $0.63 dilluted ($0.64 basic) on revenues of $41.3 million.
O/S is only 7.3 mil, float is only 3.6 mil.

Here is the new progression of earnings showing amazing sequential growth:

Sequential growth:

Q1 2006 = $0.13
Q2 2006 = $0.17
Q3 2006 = $0.19
Q4 2006 = $0.32
Q1 2007 = $0.45
Q2 2007 = $0.63

Earnings in last 2 quarters exceed total 2006 earnings by ~50%.....At this rate, they may get well above $2.20 in earnings in 2007...

Key points from the latest earnings release:

Backlog was $82.4 million at June 30, 2007 as compared to $84.5 million at December 31, 2006 and $70.8 million at June 30, 2006. Subsequently, we signed contracts with various customers for a total of $13.7 million, including options. Additionally, we were awarded a contract with a contract price of $22.5 million by the Texas
Department of Transportation which we expect to sign during August 2007 for the construction of a 264’x66’x15’ passenger/vehicle ferry scheduled for delivery during 2009.

This means they have $82.4 mil + another $36.2 mil in backlog.

Even at highly conservative PE of 15 given this kind of growth, this is a $33 stock....

Food for thought:

Check the competitor:

http://finance.yahoo.com/q?s=tod -> Todd Shipyards Corp. (NYSE:TOD)

Only $0.57 reported for 2006 on $125.5 mil in revenues in Todd Shipyards (TOD) and the stock is trading at $22 at PE of 38.

Chinacast Education (CEUC.OB)

2007-06-22T11:06:00.000-05:00

I'd like to introduce a new interesting company - Chinacast Education (CEUC.OB).
The stock trades on Bulletin Board with average volume of only 23k.

Few points:

- It's a China Education Sector - compare it to stellar performance of New Oriental Education & Technology Group (EDU).

- Recents results: ChinaCast Education Corporation Announces First Quarter Results With Net Income Up 41 Percent From Last Year
http://biz.yahoo.com/pz/070521/119995.html

FIRST QUARTER HIGHLIGHTS

-- Gross margin of 57% and net margin of 33% versus 47% and 22% in Q1
FY2006
-- Q1 Revenues off 6% due to re-structuring of Tongfang Education
joint venture and lower equipment sales which were particularly
high in the first quarter of 2006
-- Establishment of a new wholly-owned subsidiary, ChinaCast Language
Training Education Technology Limited ("CLTET"), to provide English
language training services in China
-- Signing of additional post-secondary education institution distance
learning customer -- Shanghai University of Electric Power

- In addition, they have recently signed an additional post-secondary educational e-learning customer, Shanghai University of Electric Power, and plan to roll out up to 50 remote training classrooms over the next 12 months.

- hope to be listed on the NASDAQ within the next 90 days according to the PR on May 21st.

- Only 26 mil O/S

- and finally, Intel Corporation announced their 8.2% investment in ChinaCast Education (2,144,511 shares) on Jun 12 -> http://www.sec.gov/Archives/edgar/data/50863/000005086307000258/sc13g2.htm

More updates are coming on this...

Cobalis (CLSC.OB) update

2007-06-22T11:01:00.000-05:00

Cobalis kept on delaying results and then came out with a statement on May 31st that they will need to perform an audit on the results:

The Company said its concerns included the possibility of incorrect data entry in patient-symptom diaries. Given inconsistencies it has identified, the Company does not know at this time which data are correct, and it said it must review source documents and conduct other quality control measures as part of its audit. Cobalis said the audit will also include an examination of the consistency of data collection methods in both studies
http://biz.yahoo.com/bw/070531/20070531006102.html?.v=1

Due to that, it's extremely risky investment, as this approval was their only hope in my opinion. I don't recommend staying in this stock unless you are willing to risk everything.

Yucheng Technologies (YTEC) Update

2007-06-11T12:12:00.000-05:00

In just 2 days (June 13th), Yucheng Technologies will no longer have warrants. June 13th is the last day to exercise these warrants or they will be extinguished.

Within 10 days (perhaps around June 20th) we should see filing for 2006 annual results, as well as Q1/2007 results along with the conference call. Current estimate for this quarter is 0.06 (as estimated by Maxim Group analysts). I believe we should see steady increase in pps following the warrants redemption. It will be interesting to see how many warrants were exercised and the total amount the company received based on that.

Cobalis Corp (CLSC.OB) - speculative

2007-05-12T09:47:00.000-05:00

Speculative buy - Cobalis Corp (CLSC.OB)...This is under radar biotech company expects to report Top-Line Results for twin pivotal Phase III Clinical Trials of PreHistin(TM) in seasonal allergic rhinitis.

The twin trials are completed, and all of the data from the 23 sites has been collected and is being audited.

In March the company announced that it has completed the locking of the database for its pivotal twin Phase III Clinical Trials of PreHistin(TM) in seasonal allergic rhinitis. An independent contract research organization (CRO) will now begin the process of implementing the statistical analysis plan designed to analyze the data from the pivotal trials.

"We are pleased to have reached this milestone in our PreHistin trials and look forward to reporting top-line results over the next month," commented Dr. Gerald J. Yakatan, Chief Executive Officer for Cobalis Corp. "These twin trials represent two of the largest clinical trials conducted utilizing this novel anti-allergy approach. Our goal is to be able to offer a new, over-the-counter anti-allergy treatment option for allergy sufferers that goes beyond currently available remedies."

The 1,551-patient pivotal Phase III trials investigated the efficacy and safety of treatment with Cobalis' PreHistin on moderate to moderately severe seasonal ragweed allergy patients. The twin trials were designed to support regulatory approval in the United States and key global markets. The studies' primary endpoint is the average improvement in total nasal symptom score (TNSS) in weeks four, five and six of treatment. To observe duration of effect after treatment, patients maintained diaries for symptomology over the final four weeks of the ten-week study.

Very good presentation in November of 2006 here to give you more details on the company:

http://www.wsw.com/webcast/rrshq10/clsc.ob/

If the results are good, I expect the share price to at least double from these levels. ($1 - $1.05 currently)

Yucheng Technologies (YTEC) - Update

2007-05-12T07:49:00.000-05:00

Yucheng Technologies has just posted their presentation for upcoming conferences. The presentation is available on the SEC site:

http://www.sec.gov/Archives/edgar/data/1356462/000114420407024421/v074666_ex99-1.htm

2 presentations are coming up this week and we could possibly see earnings release as well....

Yucheng Technologies (YTEC) news

2007-05-09T17:02:00.000-05:00

More great news from Yucheng Technologies (YTEC) -

Yucheng Technologies Approved for NASDAQ Global Market Listing
Mr. Weidong Hong, CEO of Yucheng, stated: "We are pleased that Yucheng meets the higher standards for listing on the NASDAQ Global Market. This is an important milestone for the company because it will provide increased market visibility and greater access for investors interested in being shareholders."

http://biz.yahoo.com/prnews/070509/cnw032.html?.v=1

This will bring a great exposure to institutions and should generate a lot more interest from individual investors.

Earnings are coming up shortly this month, as well as 2 conferences - one at Roth Capital and Susquehanna Financial Group - both next week.

Oncology Med (ONCO.PK) -

2007-05-09T17:00:00.000-05:00

$1.28 high from 0.83 original call 2 days later....speculative stock gained over 50% in 2 days....closing recommendation

Conrad Industries - Target reached - $12

2007-05-09T16:58:00.000-05:00

Conrad Industries - $12 Target reached. Still a very good company with lots of potential, but original target of $12 is reached. (75% since original recommendation 3 weeks ago).

Oncology Med (ONCO.PK)

2007-05-07T11:43:00.000-05:00

Highly speculative stock - Oncology Med Inc.(ONCO.PK):

Here is the recent news:

http://finance.yahoo.com/q?s=onco.pk

May be interesting here at 83 cents...

Oncology Med, Inc. which was formerly known as Vianet Technology Group has changed it name and will now go trade under the symbol ``ONCO''.

Oncology Med's mission is to be a pioneer in the advancement of the treatment of cancers. The Company plans on growing its business through acquisitions in addition to the organic growth of its first acquisition Comprehensive Physics & Regulatory Services, which will now conduct business under the trade name of Oncology Med.

CPRS is a 12-year-old firm that provides specialized internet-based treatment plans and medical physics consulting services for radiation centers. Oncology Med's acquisition of CPRS will provide the foundation for the entity to achieve significant revenue growth. Management believes that the acquisition/merger will provide CPRS with greater access to capital with which it intends to commence enhanced sales and marketing efforts which it believes will lead to greater revenues and profits.

As part of the reorganization, Dr. William Walker, President of CPRS, has become chairman of Oncology Med, Inc. Dr. Walker stated, ``I am very excited that we are a publicly traded company and are able to take advantage of the capital markets to fuel our exciting growth. We believe that with the future hiring of sales personnel our revenue opportunities will increase. Additionally we feel we are going to be able to accomplish potential acquisitions while becoming a vertically integrated oncology company.''

Currently, there are over 2,000 radiation centers in the country providing radiation services to cancer patients. Depending on the type of cancer and condition of a patient, on average, receives approximately 26 treatments during the course of radiation therapy. During the course of treatment, patient records and actual care have to be closely monitored and generally require approximately 5 patient reviews made by a qualified medical physicist. These patient or chart reviews assure proper patient care. In many radiation centers, lack of a full time available physicist can result in less than optimal patient reviews.

CPRS addresses these needs by providing a full range of patient specific radiation service treatment plans in addition to online treatment plans. This solves two key barriers of entry for radiation centers seeking to offer new technology by making available the most advanced treatment methodology to smaller radiation centers without substantial investment for equipment and staff. The Company, therefore, offers the possibility to enable radiation centers to increase revenues and profits while lowering expenses and improving quality.

CPRS operates its remote treatment planning services out of its facility located in Pittsburgh, Pennsylvania. The center houses computer stations with treatment planning software and equipment that receives and sends required patient data and images in accordance with healthcare data security standards. The center is staffed and currently equipped to service substantial additional business volume. Medical Physics services and specialty consulting are also provided at client sites.

THE MARKET -- The radiation oncology market is growing worldwide. Internationally the market is in its infancy. In the U.S. over 5,000,000 Americans have cancer. There are 850,000 new cancer cases diagnosed annually with 60% of all cancer patients being treated by radiation therapy. Radiation centers treat an average of 650 patients annually and smaller radiation centers generate revenues of up to $ 5,000,000 or more.

Dr. Walker is a professional medical physicist with 35 years of experience in clinical practice, research and program management. He holds a B.S. in Civil Engineering from the Virginia Military Institute, an M.S. in Radiation Biophysics from the University of Kansas and a Ph.D. from the University of Florida in Environmental Engineering (Medical Physics). He is certified by the American Board of Health Physics, licensed by the State of Florida as a Therapeutic Radiological Physicist and is a registered Professional Engineer. Dr. Walker headed the U.S. Nuclear Regulatory Commission's medical and academic licensing program and later was the Radiation Safety Officer and Radiation Safety Program Director for the National Institute of Health. He is the author of numerous papers on medical and health physics and currently serves as an officer and member of the Board of Directors of Advanced Oncology Network, Inc. He is also a member of the Board of Directors of Abundant Blessings (Jamaica) Cancer Treatment Centre, Ltd. and Universal Healthcare Management Systems.

About Oncology Med, Inc.

Oncology Med is a public company engaged in the fulfillment of services related to the treatment of various cancers. It currently provides analysis and design of radiation treatment plans in order for radiation oncologists to administer radiation plans to cancer patients. Current services facilitate radiation treatment programs ranging from external beam radiation to more advanced radiation treatment technologies.

More information about Oncology Med, Inc. can be found at http://www.oncologymed.com

Yucheng Technologies Update (YTEC) - Fund Purchase

2007-04-26T16:54:00.000-05:00

Well, Yucheng Technologies (YTEC) is breaking to new highs. Volume has been increasing lately. And today it a big fund purchase by Globis Capital Partners -
one of Japan's leading venture capital (VC) firms with JPN 21 billion yen under management:

http://www.globiscapital.co.jp/en/about/index.html

Here is the filing: (they bought 5.8% of O/S - 565k shares)

http://www.sec.gov/Archives/edgar/data/1268460/000091476007000069/p75621_13g2.htm

Also, huge block in warrants today - 310k

Lots of activity lately in warrants (YTECW)

Conrad Industries (CNRD.PK)

2007-04-10T17:06:00.000-05:00

Highly profitable company reported excellent earnings today.

http://www.pinksheets.com/pdfservlet?id=10409

Excerpt from this release:

REPORT TO OUR FELLOW SHAREHOLDERS
The positive changes we began to experience in the latter part of 2005 continued during 2006 as we completed the year with record
revenue, net income, and backlog, and a much improved balance sheet. At the same time our workforce achieved an outstanding
safety record.

Although, between 2002 and the first half of 2005 we experienced a difficult Gulf of Mexico energy marine construction and repair
market, we have seen in 2006 a major increase in projects for other commercial customers as well as an increase in energy projects.

Because much of our repair work comes from the Gulf of Mexico oil and gas industry, improved conditions in that industry have
positively affected our repair segment. For 2006, 45.5% of total revenue was energy related, 38.5% was other commercial and
16.0% was government. This compares to 22.6% energy, 38.2% other commercial and 39.2% government in 2005.

During 2006, we added $113.1 million of new contracts to our new construction segment, of which $42.3 million was related to the
oil and gas industry and $70.8 million was related to other commercial projects, generally attributable to increased spending for
construction activities, double skin tank barges, and harbor tugs. As a result of this increased activity, margins have improved on
recent new construction contracts. Our backlog as of December 31, 2006 was approximately $84.5 million compared to $35.4
million as of December 31, 2005. At December 31, 2006, 63.3% of our vessel construction backlog was from other commercial
contracts, 31.7% was from energy related customers and 5.0% was from government contracts. This compares to backlog at
December 31, 2005 of 38.4% other commercial, 0.0% energy, and 61.6% government.
Our construction projects in progress as of December 31, 2006 consisted of 34 vessels which includes two 124-foot towboats, five
double-skin tank barges, an ST tug, three z-drive tugs, a 200 class liftboat, five 175 class liftboats, a 3300 hp steel towboat, and
sixteen barges ranging in size from 120 feet to 160 feet. Our customers comprise a very diverse group that crosses a wide range of
businesses including the energy sector, dredging, construction, towing, and bunkering markets, as well as the US Army Corps of
Engineers.

During 2006 we delivered 30 vessel construction jobs of various types and sizes which are the most jobs delivered in one year by
our Company. We delivered nine deck barges, an anchor scow, four crane barges, two inland double skin tank barges, four spud
barges, three double skin tank barges, three landing barges, a fish stocking vessel, an aluminum fire and patrol boat, and two inland
tow boats.

During 2006, revenue increased 88.4% to $121.8 million from $64.7 million in 2005. The increase in revenue for the current year is
primarily a result of the overall increase in production hours. Vessel construction hours increased 73.0% compared to 2005, while
repair and conversion hours increased 125.2% compared to 2005.
We reported net income of $5.9 million and net income per diluted share of $0.81 for the year ended December 31, 2006 compared
to net income of $111,000 and income per diluted share of $0.02 for the year ended December 31, 2005. This increase in net income
is primarily the result of a very strong market for our repair services.

We revised our loan agreement and extended our maturity date to 2011 and increased our line of credit to $10 million. We reduced
our total loan balance from $18.3 million at December 31, 2005 to $10.2 million at December 31, 2006 while increasing our net
working capital from $6.3 million at December 31, 2005 to $7.6 million at December 31, 2006.

Our Company is very different today compared to a few years ago. We have a more diversified customer and product mix. We’ve
expanded our capacity with the investments that we’ve made and we’ve grown our workforce and management in order to handle
the additional production levels. With an improved marine environment, the strong support of our loyal employees, customers and
suppliers, our record new construction backlog and stronger financial condition, we are optimistic about our continuing ability to
increase gross profit and the bottom line in 2007, leading to an increase in shareholder value.

To sum it all up:

Net income for 2006 is 0.81 compared to 0.02 for 2005 (5.9 mil vs 111k)

Revenues increased 88.4% to $121.8 million from $64.7 million in 2005

EPS progression through 2006 is as following:
.13, .17, .19 and .32 for Q1 through Q4, respectively. Earnings are fully taxed and diluted.

Backlog up to $85M versus $35M yoy. And that's for new constructions...
Doesn't even include repair revenues (which account for 40% of total revenues)

Could be at least $1.2 in earnings for 2007 for $7 dollar stock....
At highly convservative PE of 10, this should be at least $12 dollar stock....

Add to this, low O/S and float (momo)

O/S is only 7.28 mil

Last, but not least, it's a hurricane stock with potentially big hurricane season on the way.

Profile:

Conrad Industries, Inc. engages in the construction, conversion, and repair of various marine vessels for commercial and governmental customers in the United States. It also engages in the fabrication of modular components of offshore drilling rigs; and floating, production, storage, and offloading vessels. The company constructs various steel and aluminum marine vessels, including large and small deck cargo barges, single and double hull tank barges, lift boats, push boats, towboats, offshore tugboats, and offshore supply vessels. Its conversion and repair of steel and aluminum marine vessels consist of lengthening the mid-bodies of vessels, modifying vessels to permit their use for a different type of activity, and other modifications to increase the cargo carrying capacity or functionality of a vessel. The company operates four shipyards in South Louisiana and Texas with direct access to the Gulf of Mexico. Conrad Industries was founded in 1948 and is based in Morgan City, Louisiana.

They used to be listed on Nasdaq, but were not profitable, and chose to delist in 2005 due to Sarbanes Oxley expenses.....
Now, that they are highly profitable, they may try Nasdaq again, in my opinion.

Once again - highly profitable, low float, low O/S, hurricane momo, unknown play...just repoted huge earnings.

References:

http://www.pinksheets.com/quote/finance.jsp?symbol=CNRD

Yucheng Technologies (YTEC) - Update on Financials

2007-04-08T14:20:00.000-05:00

Update on financials:

Number of shares immediately post transaction:

9.5mn shares
6.9mn warrants outstanding

From the company presentation:

Cash per share ($1.78 - assumes $17mn cash and 9.5mn shares)

2005 Earnings per share based on 8.8mn shares (excluding 773,000 shares
tied to performance in 2006) is $0.36

2006 Earnings per share - $0.64; management hits and exceeds the net profits target

EPS growth if management hits 40% growth is about 30% for common
shareholders (before CUAQ warrant conversion)

Highly Incentivized Management

Cash Bonus for Share Price Increase:

- US$5 million bonus if CUAQ receives an aggregate of US$34.5 million in gross proceeds in additional financing (i.e. successful warrant exercising if share price is maintained at US$8.50)
- US$1 million bonus if share price (at least 60 consecutive trading days) is above US$10.00 in 2006
- US$2.0 million if Share Price Average is above $12.00 in 2007
- US$3.0 million if Share Price Average is above $14.40 in 2008
- Total cash bonus will not exceed US$10 million

Share Bonus for Earnings Growth:

- 952,832 shares each year from 2007-2010 for meeting or exceeding 40% annual growth in net profits:

Year ending December 31 Net Profit
2007 US$8.5 million
2008 US$11.9 million
2009 US$16.7 million
2010 US$23.3 million

- All-or-nothing share bonus plan

New Interview with CFO on Wall St. Reporter

2007-04-02T11:17:00.000-05:00

Interview with CFO (Peter Li) has just been posted on Wall St. Reporter....

http://www.wallstreetreporter.com/profile.php?id=23408&a=1

In this interview, Peter Li, CFO of Yucheng Technologies, talks about the company, its prospects and future.

Yucheng Technologies (YTEC)

2007-04-01T10:57:00.000-05:00

Today I'd like to summarize prevous DD on Yucheng Technologies - a company with great potential - (now trading on Nasdaq as YTEC with warrants YTECW)

It's a new Chinese entity combined from a couple of companies purchased by China Unistone and renamed to Yucheng Technologies.

Here is a little on the deal: China Unistone was organized to effect a business combination with an operating business that is based in China and that has significant growth potential. After the consummation of the stock purchase and redomestication merger, the operating companies of Yucheng will be Sihitech, and its subsidiaries, and e-Channels, all of which are located in China. Together these companies will provide IT services and system integration, web banking, and electronic multi-channel software and solutions to the Chinese banking industry. These companies, founded in the late 1990's have, collectively, demonstrated significant growth since commencing operations. China Unistone believes that the operating companies have the infrastructure in place to expand their business through cross selling, increase their customer base, and develop new services and products. As a result, China Unistone believes that a business combination with Sihitech and e-Channels will provide China Unistone stockholders with an opportunity to participate in a combined company with significant growth potential. The combined company conists of Sihitech and e-Channels companies. Here is something for 2005: In 2005, Sihitech and e-Channels had combined revenues of $25.2 million and total net income of $3.1 million. Post closing, Yucheng will have six operating subsidiaries which include Sihitech, e-Channels, Beijing Sihitech Software, Shanghai Sihitech, Shanghai Sihitech Software and Guangzhou Sihitech. There also will be two representative offices in Fuzhou and Xian. The combined company will have a combined employee staff of approximately 550 employees

Lots of info on it can be found here: http://www.secinfo.com/dVut2.vbdf.htm

Now to the profile:

Yucheng Technologies Ltd. is an IT solution and services provider to the Chinese banking industry. Headquartered in Beijing, China, Yucheng has established an extensive footprint to serve its banking clients nationwide with five subsidiaries and representative offices located in Shanghai, Guangzhou, Xian, Xiamen, and Chengdu. Yucheng currently has more than 600 employees across China. Yucheng provides a comprehensive suite of IT solutions and services to Chinese banks from system integration and IT consulting, to IT solutions, software platform, and outsourced operations. Yucheng counts 12 out of the 15 top commercial banks in China as its customers. Yucheng is especially strong in banking channel management IT solution and services, such as web banking and call centers. It has the largest market share in the web banking application market in China by user base according to a third party research report. Yucheng is ranked one of the top five IT solution providers, along with IBM and Digital China by IDC's "China Banking Industry IT Solution 2006-2010 Forecast and Analysis" report released in September 2006. Yucheng management team consists of industry veterans with extensive experience in serving the Chinese banking industry.

Earnings:

Latest 2006 Annual Results highlights (released 2/16/07):

57% growth in revenue to RMB 310.6 MN (US$ 39.8)
94% growth of net income to RMB 47.7 MN (US$ 6.1 MN).
profit margins are 27.9%
net income is 0.64

Notice the company was trading on OTC BB then.

http://biz.yahoo.com/prnews/070216/cnf002.html?.v=1

Yucheng Technologies Limited Releases its Preliminary Unaudited Annual Results for its 2006 Fiscal Year Friday February 16, 7:00 am ET BEIJING, Feb. 16 /Xinhua-PRNewswire/ -- Yucheng Technologies Ltd. (OTC Bulletin Board: YCHTF - News; OTC Bulletin Board: YCHWF - News) is a leading IT solutions and services provider to China's banking industry. Through its operating subsidiaries, the company provides a comprehensive suite of products and services to China's banking industry, from system integration, IT consulting, software solutions and outsourced operations, of which its web banking solution enjoys 70% market share on an end-user basis. Since the merger agreement that was signed on December 20, 2005 between the 2 Chinese operating companies, Beijing Sihitech and e-Channels and the OTCBB listed shell company China Unistone, the operating companies have been consolidating its operations to become more efficient in its service offerings and draw on its strengths to expand its product offerings and client base. To date, the company sees a positive trend in its operations due to the consolidation and growth. Based on the preliminary unaudited financial statements of its Chinese operating companies for the full year 2006, excluding the merger transaction costs and the shell company's result, Yucheng management is pleased to announce that the Chinese operating companies achieved 57% growth in revenue to RMB 310.6 MN (US$ 39.8) and 94% growth of net income to RMB 47.7 MN (US$ 6.1 MN). Of the total revenue, system integration, IT consulting, and software and outsourced businesses contributes RMB 197.8 MN (US$25.3MN), RMB 62MN (US$7.9MN), and RMB 50.8MN (US$6.6MN) respectively. The Yucheng Chinese operating company achieved gross margin of RMB 87MN (US$11.1MN), of which system integration, IT consulting, and software and outsourced operation contributes RMB 24.9MN (US$3.2MN), RMB 30.7MN (US$3.9MN), and 31.4MN (US$4MN) respectively. Mr. Weidong Hong, the CEO of Yucheng Technologies stated "We continue to see the benefits from the combination of Sihitech and e-Channels, as well as the latest acquisition of Sunrisk, through our increased resources, including staffing, product offering diversity and capital. We believe that 2006 is a stellar year on a combined basis of the Chinese operating companies, evidenced by a solid step forward in the migration up the product value chain to high- growth and high-margin non-system-integration businesses. Looking forward, we believe that 2007 will also be a successful year as the company draws on its resources to expand its client base and continues to leverage our combined and newly acquired companies' cross-selling opportunities to gain market share." The audited financial statements will be included in the 20-F form required for Yucheng to file by June 30, 2007.

Summary:

It's a profitable Chinese company with significant growth and large profits margins.

They have only 9.5m O/S with 3.45m in float. And already booked 6.1m in net income for 2006.

Plus, they recently purchased another profitable company: http://biz.yahoo.com/bw/070122/20070122006146.html?.v=1
BEIJING--(BUSINESS WIRE)--Yucheng Technologies Ltd. (YCHTF.OB, YCHWF.OB) today announced that its wholly owned subsidiary, Beijing Yucheng Technologies, signed a stock purchase agreement to acquire 100% ownership of Sunrisk Information Technology Ltd., a Beijing based risk management solution and service provider to Chinese banks. The consideration for the acquisition of the stock of Sunrisk Information Technology Ltd. was all cash deal which was partially paid at the time of acquisition, with the balance due on January 31, 2007 and March 31, 2008 based on the 2006 and 2007 results of operations. For 2006, Sunrisk's unaudited revenue was approximately US$ 1,536,000 (RMB 12 million) and unaudited net profit was US$ 960,000 (RMB 7.5 million) under US GAAP.

And finally, they began trading on Nasdaq 3 weeks ago.
Their warrants (YTECW) could be very rewarding with exercise price of $5 and expiration in 11/2008

Yucheng Technologies - Nasdaq Listing

2007-03-14T23:45:00.000-05:00

HRBN #2?

Yucheng Technologies Ltd. Announces its Listing on the NASDAQ Capital Market
Wednesday March 14, 10:04 am ET

http://biz.yahoo.com/prnews/070314/cnw010.html?.v=27

BEIJING, March 14 /Xinhua-PRNewswire/ -- Yucheng Technologies Ltd. today announced that its common stock and warrants have commenced trading on NASDAQ Capital Market under the symbols YTEC and YTECW respectively, effective today -- Wednesday, March 14, 2007.

Yucheng Technologies Ltd., a leading IT solution and services provider to the local Chinese banking industry, is the combination of Beijing Sihitech Technology Co., Ltd., Beijing e-Channels Technology Co., Ltd., and China Unistone Acquisition Corporation. It was previously traded on the OTCBB under the symbols YCHTF.OB and YCHWF.OB upon the consummation of its merger on November 24, 2006.

Yucheng Technologies Ltd. is the first local Chinese IT solution and services provider to the Chinese banking industry to be listed on NASDAQ. Weidong Hong, CEO of Yucheng Technologies Ltd., stated: "We are thrilled to be listed on the NASDAQ Capital Market, which brings international public company prestige to our existing market leadership position, our strong local management team, and proven track record in the banking IT segment in China. Being a NASDAQ listed company, Yucheng will be in an even better position to be the preferred and trusted local choice to provide the IT solutions and services that local Chinese banks increasingly need to expand their capabilities and enhance their competitiveness in an increasingly open financial services industry."

About Yucheng Technologies Ltd.

Yucheng Technologies Ltd. (Nasdaq: YTEC; YTECW) is an IT solution and services provider to the Chinese banking industry. Headquartered in Beijing, China, Yucheng has established an extensive footprint to serve its banking clients nationwide with five subsidiaries and representative offices located in Shanghai, Guangzhou, Xi'an, Xiamen, and Chengdu. Yucheng currently has more than 660 employees across China. Yucheng provides a comprehensive suite of IT solutions and services to Chinese banks ranging from system integration and IT consulting, to IT solutions, software platform, and outsourced operations. Yucheng counts 12 out of the 15 top local commercial banks in China as its customers, and is especially strong in banking channel management IT solution and services, such as web banking and call centers. It has the largest market share in the web banking application market in China by user base according to a third party research report. Most recently, Yucheng made a strategic investment to provide risk management services to meet its clients' growing demand in this area driven by its profit conscientiousness and Basil Accord II compliance. Yucheng is ranked one of the top five IT solution providers, along with IBM and Digital China by IDC's "China Banking Industry IT Solution 2006-2010 Forecast and Analysis" report released in September 2006. Yucheng management team consists of industry veterans with extensive experience in serving the Chinese banking industry.

http://biz.yahoo.com/prnews/070314/cnw010.html?.v=27

2007-03-08T12:11:00.000-05:00

Harbin Electric continues to deliver. Earnings are out and they look good. I expect the stock to hit high teens in less than 6 months. (it already gained over 60% from original DD at $8.10)

4Q06 Revenues Increase 66.9% to $12.0 Million
Fiscal 2006 Revenues Increase 70.9% to $40.4 million

http://biz.yahoo.com/prnews/070308/cnw007x.html?.v=1

Net Income for 2006 increased to $18.4 million, or $1.01 per diluted share, compared to $10.0 million, or $0.67 per diluted share, for 2005. This increase was driven mainly by increased operating income and the non cash gain of $6.4 million, or $0.35 per diluted share, included for the change in fair value of warrants.

Our total fully diluted share count at the end of 2006 was 18,306,569 compared to 15,143,891 at the end of 2005. The increase was driven by warrants granted to investors and options granted to employees during 2006.

Highlights for the Fiscal Year 2006 include:

Entering into a joint research and development agreementwith the Institute of Electrical Engineering of the ChineseAcademy of Sciences ("IEECAS") to produce a train andsystem to be tested at the Beijing Airport railway line inthe People's Republic of China by the end of 2008;
Closing of a US$50.0 million debt financing with CitadelEquity Fund Ltd. and Merrill Lynch International;
Strengthening of our Board of Directors by adding 3 newindependent board members;
Commenced construction of new manufacturing facility in theShanghai Zhuqiao Airport Industrial Zone focused onautomobile market.

Yucheng Technologies (YCHTF.OB)

2007-02-06T10:03:00.000-05:00

Potential long term stock - Yucheng Technologies. YCHTF.OB (has warrants YCHWF.OB, which I like more).

Lots of info on it can be found here:

http://www.secinfo.com/dVut2.vbdf.htm

Basically, it's a new Chinese entity combined from a couple of companies purchased by China Unistone and renamed to Yucheng Technologies.

Here is a little on the deal:
China Unistone was organized to effect a business combination with an operating business that is based in China and that has significant growth potential. After the consummation of the stock purchase and redomestication merger, the operating companies of Yucheng will be Sihitech, and its subsidiaries, and e-Channels, all of which are located in China. Together these companies will provide IT services and system integration, web banking, and electronic multi-channel software and solutions to the Chinese banking industry. These companies, founded in the late 1990's have, collectively, demonstrated significant growth since commencing operations. China Unistone believes that the operating companies have the infrastructure in place to expand their business through cross selling, increase their customer base, and develop new services and products. As a result, China Unistone believes that a business combination with Sihitech and e-Channels will provide China Unistone stockholders with an opportunity to participate in a combined company with significant growth potential.

The combined company conists of Sihitech and e-Channels companies. Here is something for 2005:

In 2005, Sihitech and e-Channels had combined revenues of $25.2 million and total net income of $3.1 million. Post closing, Yucheng will have six operating subsidiaries which include Sihitech, e-Channels, Beijing Sihitech Software, Shanghai Sihitech, Shanghai Sihitech Software and Guangzhou Sihitech. There also will be two representative offices in Fuzhou and Xian. The combined company will have a combined employee staff of approximately 550 employees.

It's a profitable entity with significant growth and huge profits margins. (read SEC)
Their business plan is to hit these profits (not revenues):

2007 $ 8,500,000
2008 $ 11,900,000
2009 $ 16,700,000
2010 $ 23,300,000

They have 9.5m O/S with a lot less in float. And already 3.2m in profits. Plus, they just purchased another profitable company:
http://biz.yahoo.com/bw/070122/20070122006146.html?.v=1

BEIJING--(BUSINESS WIRE)--Yucheng Technologies Ltd. (YCHTF.OB, YCHWF.OB) today announced that its wholly owned subsidiary, Beijing Yucheng Technologies, signed a stock purchase agreement to acquire 100% ownership of Sunrisk Information Technology Ltd., a Beijing based risk management solution and service provider to Chinese banks. The consideration for the acquisition of the stock of Sunrisk Information Technology Ltd. was all cash deal which was partially paid at the time of acquisition, with the balance due on January 31, 2007 and March 31, 2008 based on the 2006 and 2007 results of operations. For 2006, Sunrisk's unaudited revenue was approximately US$ 1,536,000 (RMB 12 million) and unaudited net profit was US$ 960,000 (RMB 7.5 million) under US GAAP.

So, here is what Yucheng does:

Yucheng Technologies Ltd. is an IT solution and services provider to the Chinese banking industry. Headquartered in Beijing, China, Yucheng has established an extensive footprint to serve its banking clients nationwide with five subsidiaries and representative offices located in Shanghai, Guangzhou, Xian, Xiamen, and Chengdu. Yucheng currently has more than 600 employees across China. Yucheng provides a comprehensive suite of IT solutions and services to Chinese banks from system integration and IT consulting, to IT solutions, software platform, and outsourced operations. Yucheng counts 12 out of the 15 top commercial banks in China as its customers. Yucheng is especially strong in banking channel management IT solution and services, such as web banking and call centers. It has the largest market share in the web banking application market in China by user base according to a third party research report. Yucheng is ranked one of the top five IT solution providers, along with IBM and Digital China by IDC's "China Banking Industry IT Solution 2006-2010 Forecast and Analysis" report released in September 2006. Yucheng management team consists of industry veterans with extensive experience in serving the Chinese banking industry.

Finally, I believe they applied for Nasdaq....according to SEC documents...I like the warrants (strike price is $5, expiration - 11/2008

Update - Nasdaq Listing (HRBN)

2007-01-26T11:15:00.000-05:00

As mentioned last week, here comes Nasdaq listing...

http://biz.yahoo.com/prnews/070126/cnf009.html?.v=17

Harbin Electric Announces Approval for Listing on NASDAQ Global MarketFriday January 26, 8:30 am ET
HARBIN, China, Jan. 26 /Xinhua-PRNewswire-FirstCall/ -- Harbin Electric, Inc. (OTC Bulletin Board: HRBN - News), announced today that its common stock has been approved for listing on the NASDAQ Stock Market. The Company expects to commence trading on the NASDAQ Global Market on Wednesday, January 31, 2007 under the ticker symbol "HRBN." Until that time, the Company's shares will continue trading on the OTC Bulletin Board. The NASDAQ Global Market, formerly the NASDAQ National Market, includes approximately 1,450 companies.

"We are proud to meet the strict requirements for listing on the NASDAQ Global Market, which reflects the significant progress we have achieved in growing our business and delivering strong financial results," commented Tianfu Yang, Chairman and CEO of Harbin Electric Inc. "We believe that a listing on NASDAQ will increase our visibility, strengthen our shareholder base and enhance shareholder value."

Mr. Yang continued, "2007 will be a year in which Harbin Electric penetrates new markets, develops new products, and continues to gain share within current customers while continuing our expansion into the international marketplace. Achieving a NASDAQ listing was a major goal for us during the first half of 2007 and we are excited to have accomplished this early in the year. I would like to express my appreciation to our Board of Directors, experienced management team and dedicated employees for this significant corporate achievement."

HRBN - Harbin Electric

2007-01-18T13:43:00.000-05:00

Potentially good long term investment in Harbin Electric (HRBN.OB) - http://finance.yahoo.com/q?s=hrbn.ob
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001266719&owner=include&count=40

The company is specializing in the linear motors. This is US company based in Beijing, China, which makes it undiscovered China play. They are forecasted to earn .82 in 2007, and almost twice as much (over 1.50) in 2008.

So, basically the forward P/E is below 6 right now...(stock is currently trades between 8.10 and 8.20). Bejing is planning to build the world's biggest subway, which is projected to surpass London as the city with the world's most extensive underground. There is potentially a very big market for railway projects for Harbin Electric's Linear Motors. Recently they announced that they entered into a joint venture research and development with Institute of Electrical Engineering of the Chinese Academy of Sciences to produce a train and system to be tested at the Beijing Airport railway line in China by the end of 2008.

Company is also trying to get on the Nasdaq with a possible listing before April 1, 2007, as well as engage a Qualified Auditing Firm. Here is the section from the recent financing deal they made with Citadel & ML:

Section 4.25 Listing of the Company's Common Stock.

The Company shall make such filings, registrations or qualifications and take all other necessary action and will use its best efforts to obtain such consents, approvals and authorizations, if any, and satisfy all conditions that the Nasdaq Capital Market or Nasdaq Global Market may impose on listing the Company's common stock and shall use its best efforts to obtain such listing by no later than April 1, 2007 and maintain such listing continuously thereafter.

And finally, Dutton and Associates began covering this stock with a Strong Buy Raiting. Once again, this is not a daytrade, but a potentially multi-bagger long term investment...

As of December 18, 2006 it had only 16.6 mil O/S, and insiders own 13.6 mil shares, leaving only 3 mil in the float.

http://finance.yahoo.com/q?s=hrbn.ob