New stocks of interest

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

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

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

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

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

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)

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)

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

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

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

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)

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)

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)

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)

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.