New - Asia Automotive Acquisition Corp (AAAC.OB)

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)

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

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)

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)

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)

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.
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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)

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

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.
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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

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)

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)

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)

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)

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)

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

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.