GeoInvesting Research, GeoAlerts, and GeoWire Releases

China Gerui Advanced Mate (CHOP) - Comments & Business Outlook

Wed, 10 Mar 2010 05:00:00 GMT

"We are pleased with our fourth quarter and full year results," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "Our top line growth was driven by our ability to increase the volume of our sales to meet continued robust customer demand and rising average selling prices for our products. The majority of our revenues come from the domestic consumer market in China, which we believe will continue to exhibit growth. Additionally, our continued focus on operational efficiency and cost controls helped us increase our gross and operating margins and achieve strong bottom line performance. We continue to improve the overall utilization rate of our production capacity and better mobilize existing resources towards higher-margin product offerings to further increase our profitability."

Mr. Lu added, "Our immediate focus for 2010 is increasing our production capacity and expanding our product portfolio into higher margin coated steel and wide strip products. We also expect to continue to benefit from the sustained rise in the purchasing power of the Chinese consumer, who is the ultimate buyer of the products our customers produce. Another market trend that we expect to benefit from is the continuing movement toward import replacement in our industry. Our customers are increasingly turning to our high-end precision steel products, which are more competitively priced but of the same quality as the premium priced imported products that they have historically relied upon."

For the first quarter of 2010, the Company expects to achieve revenues of between $54 million and $56 million and net income of between $10.5 million and $11 million. The Company expects to file its Annual Report on Form 20-F for the fiscal year ended December 31, 2009 on or before April 30, 2010.

Source: PR Newswire (March 10, 2010)

Eastern Envtl Solutions Corp (EESC) - Research

Wed, 10 Mar 2010 05:00:00 GMT

We will follow the Eastern Envtl Solutions more closely due to the following events:

Announced that it will increase its disposal capacity by 25% in the first quarter of 2010 at its Harbin municipal solid waste (MSW) landfill. GlobeNewswire (March 1, 2010)
Entered into a letter of intent with Veolia Environment, one of the world's leading environmental services firms, on a project to establish a power plant that would utilize recaptured landfill gas from Eastern Environment's Harbin landfill to power turbines and generate electricity. Marketwire (February 9, 2010)
After two and half years of suspended operations in it Land Fill Company was notified by the Harbin Municipal Urban Administrative Bureau (HMUAB) that it could recommence operations at the landfill as of October 30, 2009. PR Newswire (November 16, 2009)

"Among our planned initiatives, we are implementing new recycling technologies that will provide additional revenue streams from our existing landfill. These new revenue streams will likely include the sale of methane to the electric power industry, as well as implementing waste-to-energy and waste-to-fertilizer processes.

This was a special situation that slipped through the GeoTeam's cracks. We will monitor events and their impact on EPS.

Harbin Electric Inc (HRBN) - Comments & Business Outlook

Wed, 10 Mar 2010 05:00:00 GMT

Looking ahead, Mr. Yang commented, "We are ready to move the Company forward to a sustained profitability in 2010 supported by a solid platform that we have built over the past years as we expect continuous growth and leverage our strong financial position and promising portfolio of products. Although the first quarter is traditionally slower with the long Chinese new-year holiday, we do not expect this seasonality to impact our business significantly compared to the fourth quarter. We also expect that the Chinese government's commitment to sustainable economic growth and the accelerated industrialization and urbanization of China will continue to drive our business and support our long term growth objectives. We look forward to a productive 2010 as we continue to capture the synergies of the Xi'an Simo acquisition, advance R&D and strengthen growth in all core businesses. We believe that 2010 will be another strong year for Harbin Electric and we remain committed to our strategies to achieve both our near and long term goals and maximize value for our shareholders."

Source: PR Newswire (March 10, 2010)

Alpha Pro Tech Ltd (APT) - Comments & Business Outlook

Tue, 09 Mar 2010 05:00:00 GMT

Al Millar, President of Alpha Pro Tech, commented, "Our fourth quarter revenues and profitability continued the positive momentum that we experienced in our earlier quarters in 2009, which allowed us to deliver record results. We continued to see substantial sales growth in our REX Synfelt synthetic roof underlayment and, to a lesser extent, our house wrap products. We are currently working on opportunities with existing and new distributors, and we are optimistic about the Building Supply segment throughout 2010 and further into the future. In the Disposable Protective Apparel segment, we expect increased sales from a broad base of our distributors in 2010, but sales to our largest distributor, which were up in 2009, are expected to soften in 2010. Our N-95 Particulate Respirator face mask sales started to slow down in the latter part of the fourth quarter and are expected to return to pre-H1N1 levels in 2010, unless concerns relating to the global H1N1 Influenza A pandemic resume."

Source: Business Wire (March 9, 2010)

Asia Entertainment & Reso (AERCF) - Investor Presentations

Tue, 09 Mar 2010 05:00:00 GMT

Asia Entertainment & Resorts Nov. 2009 Investor Presentation

China Energy Corp (CHGY) - Research

Mon, 08 Mar 2010 05:00:00 GMT

On March 2, 2009 we initiated a trading position in China Energy shares in the mid $1.00 area. The company reported it 2009 financial results via a 10K filing:

	Full Year 2009	Full Year 2008	Period Change
GAAP Revenue	$41.7 million	$19.9 million	109.5%%
GAAP EPS	$0.11	$0.09	22.2%
Reported Tax Rate	30.0%	28.0%	7.1%
Tax-Adjusted GEO Supplied Non-GAAP EPS a	$0.11	$0.04	175.0%
Fully Diluted Shares	45.0M	45.0M	0.0%

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

	4th Quarter 2009	4th Quarter 2008	Period Change
GAAP Revenue	$21.9 million	$5.5 million	298.2%
GAAP EPS	$0.15	$0.09	66.4%
Reported Tax Rate	Benefit	Benefit	n/a
Tax-Adjusted GEO Supplied Non-GAAP EPS ^a	$0.09	$0.05	80.0%
Fully Diluted Shares	45.0M	45.0M	0.0%

While the 2009 year showed respectable growth, a closer inspection revealed that a good deal of the growth came in the fourth quarter. Investors might continue to take to this story if the fourth quarter is a harbinger of things to come and if the company improves its balance sheet.

There a couple of issues investor should be mindful of that could influence performance and P/E expansion:

Net-working capital is negative which is reflected in a current ratio that is less than one. Ideally, investors would probably prefer to see a current ratio of at least 2 to 1.
The Debt to equity ratio is 66.0%. Ideally, investors would probably prefer to see this ratio at less than 20%.

Information we need to digest in order to gain insight into the near term growth potential of China Energy Corp:

China Energy has the rights to operate the LaiYeGou coal mine in Inner Mongolia.

China Energy Corp recently completed a two year infrastructure improvement project to its mine and now has the capacity to produce approximately up to 800,000 metric tons per year by the end of 2010.

"The expansion included the installation of “longwall” mining equipment, the construction of wider laneways for access to the mine and from mine to coal field, construction of seven work stations and emergency exits and improvements to the draught system."

2009 mining operations were temporarily hurt as these improvements were implemented. We found it interesting that the LaiYe Gou mine has established proven and probable reserves of 26.09 million metric tons.

"China Energy does not expect to encounter further interruptions in its business operations."

It appears that China Energy Corp produced 453,430k metric tons of coal in 2009 of which about 300k metric tons were produced in the fourth quarter. (still need confirmation on this, as this seems large). What we need to know is how fast operations will reach full capacity.

We will provide more details if warranted. Any input is appreciated.

Maj

Di closure: Long

China Mass Media Corp (CMM) - Comments & Business Outlook

Mon, 08 Mar 2010 05:00:00 GMT

"Conditions in the Chinese advertising market began to improve towards the end of 2009. We saw our clients start to become much more active in allocating their advertising budgets to both new and old projects during the fourth quarter. We took advantage of our strong media resources to meet their increased demand and higher advertising budgets."

"We are confident that the economy and the advertising industry will remain strong throughout 2010. We closely reviewed our stock of media resources last quarter and decided to intentionally give up certain high risk and low profitability products. We intend to focus our efforts on the sales and marketing of our primary resources to maximize our profit margin."

"The Company currently expects to generate total net revenues of between RMB58 million to RMB 64 million for the first quarter of 2010, which represents a potential decrease of 57.3% to 61.3 % compared to the first quarter of 2009. The expected decrease will be mainly because the Company no longer owns the advertising rights to CCTV's Chinese New Year Gala show, and because the Company now has fewer media resources available for sale on CCTV-4 due to efforts to improve profit margins. The guidance also reflects a potential decrease of 45.4% to 50.5% compared to the fourth quarter of 2009, primarily due to seasonality factors."

Source: PR Newswire (March 8, 2010)

Jade Art Group Inc (JADA) - Comments & Business Outlook

Mon, 08 Mar 2010 05:00:00 GMT

"...Chinese economy is recovering and showing great improvement. This has a positive impact on the commercial and residential construction markets and the high-end jewelry market into which the company sells raw jade. The new sales policy, reduction on the rate of sales advances on new orders from 30% to 10%, is another factor that contributes improving the revenue JADA indicates that is not in need of capital."

Source: SEC Third Quarter 10Q filing.

Soko Fitness & Spa Group (SOKF) - Investor Presentations

Mon, 08 Mar 2010 05:00:00 GMT

March 2010 Investor Presentation.

Ats Corp (ATSC) - Comments & Business Outlook

Fri, 05 Mar 2010 05:00:00 GMT

Based on ATSC`s year to date profit margins, the Company is updating its EBITDA (1) guidance for 2009. The Company is now increasing its EBITDA (1) forecast for the year to be between $12 million and $13.5 million. The Company is reiterating its revenue guidance range of $121 million and $125 million.

Dr. Bersoff commented, "We have consistently exceeded our target EBITDA and EBITDA margins each quarter of 2009 and expect to end the year with EBITDA margins for the full year well in excess of industry norms."

BusinesssWire (November 09, 2009)

Ats Corp (ATSC) - Research

Fri, 05 Mar 2010 05:00:00 GMT

We will be tracking the Ats Corp story due to:

New contract awards. PR Newswire (March 4, 2010)
The company strong EPS growth in its third quarter. (Revenues are still weak).BusinesssWire (November 09, 2009)
The stock trades at less than one times its book value per share of $2.19.

China Electric Motor Adr (CELM) - Share Structure

Fri, 05 Mar 2010 05:00:00 GMT

Post IPO Share structure as a result of a reverse merger transaction on March 3, 2009, private placement transactions and subsequent IPO on February 3, 2010.

4,612,662: Pre reverse merger outstanding shares

4,612,662: Pre reverse merger warrants outstanding shares

3,260,659: Shares cancelled as part of the Share Exchange

3,985,768: Warrants cancelled as part of the Share Exchange (626,894 remain issued)

500,000: Warrants issued to underwriter

288,000: Conversion of debt by director into common stock

10,679,260: Newly issued revese merger shares of Common Stock

2,051,767: Private placement shares

5,000,000; Newly issued shares of common stock in IPO

750,000: Underwriter over allotment option

GeoTeam® best effort calculation of total post reverse merger outstanding shares assuming full conversions: 21,247,924

Renhuang Pharmaceuticals (RHGP) - Investor Presentations

Fri, 05 Mar 2010 05:00:00 GMT

Renhuang Pharmaceuticals March 2010 Presentation

Best if viewed at full size. Hit escape to exit.

Spectrum Brands Inc (SPEB) - Special Situations

Fri, 05 Mar 2010 05:00:00 GMT

On November 6, 2009 we issued an alert that SPEB had recently emerged from Chapter 11 bankruptcy. Over My Twenty years of investment experience buying stocks that have emerged from bankruptcy have been a highly rewarding strategy. During the chapter 11 process the company communicates with the courts and debt holders to develop a viable operating plan that will ensure the survival of the company, while satisfying its obligations. Typically, all or a good deal of the common stock is cancelled and new stock is issued upon exiting chapter 11, often resulting in a tight float. Many times, the restructured firm is eventually acquired. The chance for investment success in these situations often depends on the terms of the restructuring arrangement as it relates to money the company owes to debt holders, vendors and suppliers.

I have found the best opportunities occur when most of the debts are forgiven in exchange for newly issued stock. The fact that debt holders are willing to accept stock shows a confidence in the long-term survival of the company.

Initially, the case of Spectrum Brands posed some challenges which is why it had not been originally coded as a GeoSpecial:

All debt was not forgiven
Financial leverage is above industry averages
The company is exposed to foreign exchange risk
The company operates in economic sensitive product categories.
The stock had nearly doubled from its chapter 11 exit price by the time had i found it.

Recently, my curiosity in the SPEB story has been somewhat piqued led :

Bullish initial fiscal 2010 EBITDA guidance of $335 million to $345 million
The announcement of a proposed merger that would increased the 2010 EBITDA forecast to a range of $430 to $440 million and reduce its risk profile.
The company's comments that the merger (all-stock transaction) values Spectrum at an enterprise value of $2.6 billion, or $965 million net of debt, which equates to $31.50 per share net of Spectrum’s outstanding indebtedness. (The Merger Agreement proposes to bring Russell Hobbs’ network of well-known small appliance brands into Spectrum’s operating structure to form a new global consumer products company with an estimated $3 billion in annual revenues.)
In contemplation of this deal, Spectrum intends to pursue listing its common stock on a major exchange.

What i found particularly interesting is that SPEB announced amendments to the merger :

The board has agreed to accept alternative business combination proposals:

"To the extent that the Company receives a written alternative proposal during the go shop period that the Board of Directors, acting through or consistent with a special committee of the Board of Directors, determines would, on its own or in certain cases together with other alternative proposals, reasonably be expected to result in a superior proposal to the combination with Russell Hobbs, the Company is permitted to continue discussions with any party that submits such superior proposal after the termination of the go shop periodd."

The board is attempting to increase liquidity in its stock:

"Under the terms of the pre-amended support agreement, the Harbinger Parties were generally prohibited from acquiring additional shares of the common stock of Spectrum Brands until the termination of the Merger Agreement. The letter agreement modifies the support agreement to permit the Harbinger Parties to purchase up to 100,000 shares of the common stock per week, up to an aggregate of two million shares, in order to provide additional liquidity to Spectrum Brands stockholders."

This is a high risk Special Situation play. I am banking that the recent news may give shares a short-term lift. Considering SPEB as a long term investment option will require a significant amount of additional due diligence.

Maj

Sources: Business Wire (February 9, 2010 - 8:00 AM EST), Business Wire (March 2, 2010)

. Disclosure as of 3/5/2010: No position

L&L Energy (LLEN) - Potential Valuation Scenarios

Thu, 04 Mar 2010 05:00:00 GMT

Valuation Scenarios

Coded as a GeoBargain on May 19, 2009 at a price of $1.90

Data Inputs:

Fiscal Year Ends in April

Date	08/03/09	03/04/10
Price	$3.05	$8.47
12 Months Trailing EPS ^a	$0.29	$0.52
GeoTeam 2010 Fully Tax-Adjusted EPS Estimate Based on Company Revenue Guidance	$0.74	$1.00
EPS Growth Rate Based on GeoTeam 2010 Fully Tax-Adjusted Implied EPS Estimate	52.7%	185.7%
P/E Ratio Based on GeoTeam 2010 Fully Tax-Adjusted Implied EPS Estimate	4.12	8.47
PEG Ratio (P/E divided by growth rate)	0.08	.05

^a All EPS numbers have been adjusted by the GeoTeam® to reflect a standard tax rate.

Short-Term Valuation Scenarios

Date	08/03/09	03/04/10
Price Based on P/E of 25 on Four Quarters Trailing EPS	$7.25	$13.00
Price Based on P/E of 20 on Four Quarters Trailing EPS	$5.80	$10.40
Price Based on P/E of 15 on GeoTeam 2010 Fully Tax-Adjusted Implied EPS Estimate	$11.10	$15.00

Long-Term (12 Months Forward) Valuation Scenarios

Date	08/03/09	03/04/10
Price Based on P/E of 25 on GeoTeam 2010 Fully Tax-Adjusted Implied EPS Estimate	$18.50	$25.00
Price Based on P/E of 20 on GeoTeam 2010 Fully Tax-Adjusted Implied EPS Estimate	$14.80	$20.00

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Andatee China Marine Fuel (AMCF) - Comments & Business Outlook

Wed, 03 Mar 2010 05:00:00 GMT

Mr. An commented: "We expect growth for the fiscal year 2010 to remain strong due to the expected further strong growth in the Chinese economy, particularly the Northeast developing region and Eastern seaports. We maintain focused on a business strategy of increasing storage for our products, including potential acquisition targets to expand our reach along the Eastern coast. We continue to maintain focus on capitalizing on the opportunities to meet the growing demand for marine fuel in the region."

Source: PR Newswire (March 2, 2010)

China Kangtai Cactus Bio (CKGT) - GeoSpecial Notes

Wed, 03 Mar 2010 05:00:00 GMT

CKGT issued revenue guidance this morning. The company did not provide any net income or EPS guidance. The stock did not react in a way that some may have hoped so we worked through the numbers to achieve a better grip of EPS implications. We came up with the following:

December Year	Full Year 2010 Guidance	Period Change	Full Year 2009 Guidance	Period Change	Full Year 2008
GAAP Revenue	$34.8 million	35.0%	$25.8 million	27.1%	$20.3 million
GAAP EPS	n/a	n/a	n/a	n/a	$0.28
Tax Rate	n/a	n/a	n/a	n/a	15.8%
Fully Tax-Adjusted GEO Supplied Non-GAAP EPS ^a,b	$0.56	40.0%	$0.40	33.3%	$0.30
Fully Diluted Shares	19.7M	0.0%	19.7M	5.9%	18.6M

__________________________________________________________________

December Qtr. 4th Quarter 2009 Guidance 4th Quarter 2008 Period Change

GAAP Revenue $7.7million $6.3 million 22.2%

GAAP EPS n/a $0.03 n/a

Tax Rate n/a n/a n/a

Fully Tax-Adjusted GEO Supplied Non-GAAP EPS ^a,b $0.13 $0.13 0.0%

So, even though the 2009 year will show growth in EPS, it is possible that short-term investors were unimpressed due to the possibility of a weak fourth quarter. (Our EPS calculation for the 2008 4th qtr. is much less than the $0.18 GAAP EPS that Reuters portrays). We look forward to the company’s year end release and the light it might shed on 2010 prospects. We particularly would like to understand what CKGT financing needs are. Until this time we we will keep CKGT coded as a GeoSpecial.

^aNon-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.The GeoTeam® non-GAAP figures apply a 25% and 36% tax rate for Chinese and United States companies respectively.

^b China Kangtai Cactus Bio did not provide EPS guidance. The GeoTeam® calculated an implied EPS figure using the current outstanding share count, current margins and revenue guidance. Using the current share count is likely an unrealistic assumption.

China Shandong Industries (CSNH) - Reverse Merger Activity

Wed, 03 Mar 2010 05:00:00 GMT

China Shandong Industries completed its reverse merger on January 21, 2009.

Company snapshot:

Global marketer of straw-wicker products, wooden crafts and solid wooden furniture. Its products are sold by well known mass market retailers including Wal-Mart, ABM Group, Argos Limited, IKEA, Zara and others.

Post Merger Share Calculation:

1,046,500: Pre reverse merger outstanding shares
875,000: Shares cancelled as part of the Share Exchange
1,543,500: Newly issued shares of Common Stock

GeoTeam® best effort calculation of total post reverse merger outstanding shares after 15 for 1 forward split and assuming full conversions: 25,725,000

Financial Snapshot:

In 2008, the company achieved sales of $43 million and net income of approximately $6 million. This works out to ProForma EPS of $0.23.
In the first six months of 2009 the company achieved sales of $29.7 million and net income of $4.6 million. This works out to ProForma EPS of $0.18.
Still awaiting financial for the back half of 2009.
Book value per share as of June 2009: $1.13.

Source: SEC 8K (November 12, 2009)

China Shandong Industries (CSNH) - Financials

Wed, 03 Mar 2010 05:00:00 GMT

	Six months ended June 30, (unaudited)				Twelve months ended December 31,
	2009		2008		2008		2007

Net revenues	$	29,696,088.95	$	19,263,982.33	$	43,310,013.06	$	37,128,229.93
Cost of sales		22,166,805.37		14,000,599.16		32,069,654.71		30,062,768.37

Gross profit		7,529,283.58		5,263,383.17		11,240,358.36		7,065,461.56
Operating expenses:
Selling		298,728.82		355,639.86		698,121.63		718,170.03
General and administrative		772,274.39		809,847.95		1,876,523.23		754,841.85

Operating income		6,458,280.37		4,105,217.71		8,665,713.49		5,592,449.68
Other income		10,056.44		7,090.53		12,034.07		14,265.54
Interest income
Interest expenses		291,916.71		325,036.16		765,034.07		430,083.28

Income before income taxes		6,176,420.10		3,787,272.08		7,912,713.49		5,176,631.93
Income tax		1,544,105.03		944,987.43		1,978,178.37		776,494.79

Net income		4,632,315.08		2,834,962.29		5,934,535.12		4,400,137.14

G Willi-Food Intl (WILC) - Comments & Business Outlook

Wed, 03 Mar 2010 05:00:00 GMT

Mr. Williger commented: "We are pleased to report significant improvement in our sales and margins in 2009 on the strength of our higher-margin product introductions. While we did see pressure on sales from the global recession in much of 2009, we are encouraged by the strong sales volumes and margins in the third and fourth quarters of 2009. We are optimistic about our start in the first quarter of 2010 and believe we can continue to benefit from a multi-channel approach and broad kosher product base that addresses a trend toward more health-conscious food choices. We will continue to focus on controlling expenses and production costs to keep our prices competive, and we will continue our efforts to expand our reach to retail and wholesale markets in the U.S."

Source: PR Newswire (March 3, 2010)

Sinocoking Coal (SCOK) - Comments & Business Outlook

Wed, 03 Mar 2010 05:00:00 GMT

PINGDINGSHAN, Henan Province, China--(Business Wire)-- SinoCoking Coal and Coke Chemical Industries, Inc. (NASDAQ:SCOK) (the "company" or "SinoCoking") today announced that it broke ground today on the construction of its new state-of-the-art coking facility in Pingdingshan city, in Henan Province, China. The new coking facility, which will cost an estimated $70 million to complete, is expected to launch production of metallurgical and chemical coke, coal gas, and various chemical products by early 2011. The cleaner, more efficient coking facility will have an anticipated maximum annual production capacity of 900,000 metric tons of coke. SinoCoking management projects that if completed as planned, the launch of the new facility could result in a five-fold or more increase in the company`s annual coke production and sales volume from the fiscal year 2012 and beyond, compared to current levels.

Ufp Technologies Inc (UFPT) - Comments & Business Outlook

Wed, 03 Mar 2010 05:00:00 GMT

"I am very pleased with our strong finish to 2009," said R. Jeffrey Bailly, Chairman & CEO. "Solid demand in our medical and military markets, coupled with the positive impact of our now fully integrated acquisitions, enabled us to generate record profits."

"These results are a testament to our company’s depth and our responsiveness to changing market conditions and growth opportunities," Bailly said. "Early in 2009, we scaled back the business in the face of significantly reduced customer demand. Yet we maintained the ability to identify exciting acquisition candidates, quickly close the transactions, and efficiently integrate those businesses." "We finished the year in excellent financial condition.

With $15 million in cash, we are well positioned to grow our business both internally and through additional strategic acquisitions," Bailly added. "This, combined with improving customer demand, leaves me optimistic about 2010 and beyond."

Source: Business Wire (March 3, 2010)

China Energy Corp (CHGY) - Research

Tue, 02 Mar 2010 05:00:00 GMT

2009 10K Excerpts:

China’s coal industry is growing and its customer base is chronically under-supplied. There are pressures from the government to use clean or alternative energies instead of coal due to environmental concerns; however, coal reserves in China are abundant and less expensive than switching to clean or alternative energies.
Given the increase in demand for coal production for electricity and heating in China, the Central government is encouraging local governments to build more power stations, coking factories, calcium carbide factories and silicon iron factories across the country.
For the Coal Group, we attempt to obtain contracts granted by the government, because in such cases transportation would be guaranteed from LaiYeGou coal mine to the final destination. Where contracts are privately arranged, transportation is arranged through the hire of third party transporters by customers. In some instances, coal is purchased by third parties in close proximity to train stations where transportation to customer destinations is more efficiently arranged. However, transportation to destinations is limited to those for which routes are in place.

The Coal Group does not have competition in the usual sense of the term that most other businesses experience. Although there are approximately 30,000 coal mining companies throughout China, because demand currently exceeds supply, competition is not a concern in the operation of our business. The electricity and heating supply industry is also growing; however, the government is taking steps to monitor and control economic growth in the rural areas to ensure that the economy is developing at a stable rate.
The NDRC, in its efforts to improve the efficiencies in the coal mining industry, is taking the approach of shutting down smaller mines or any mine which does not meet its specified basic production requirements. The LaiYeGou mine is considered one of the larger mines in the area, and, therefore, we do not believe it will be subject to such potential closure. Our production levels are determined by market demand.
Our business of buying and selling coal on a proprietary basis expanded in 2009 as a result of our receipt of additional quota from the local railway bureau to transport coal by train. We were able to trade more coal as a result of our ability to deliver more coal to trading partners by rail. Quota is awarded by the local railway bureau based on an application prepared by us each year. Parties are awarded additional quota based on their successful use of quota in the previous year. We have received a larger amount of quota for 2010 than we held in 2009; however, our ability to use any or all of this quota in 2010 is not guaranteed and will vary with market conditions, and our ability to source commercially acceptable coal purchases and subsequent trades.
Heat Power has two distinct operations: supplies steam heating directly to end users throughout the XueJiaWan district in Ordos City, Inner Mongolia: and it also supplies electricity through Electric Power Group. Revenues generated by Heat Power were $9,748,301 in 2009 compared to $7,008,528 in 2008. The $2,739,773 change was a result of an increase in sales volume resulting from an over 50% increase in the coverage area of Heat Power’s operations, and a 31% increase in megawatts sold by the electric Power Group. In addition, sales in 2008 were artificially low due to a temporary shutdown of electricity power plant operations for air quality control purposes in connection with the 2008 Beijing Olympics.
We believe that cash flow from collection of accounts receivables, customer deposits and bank and shareholder loans will be sufficient to sustain our working capital needs.

Jade Art Group Inc (JADA) - Research

Tue, 02 Mar 2010 05:00:00 GMT

We stumbled upon the Jade Art Group GeoMessage board today where a member has inquired about the company. We were actually watching this story closely before the 2008 global crisis. However, the company's dependency on high end consumer demand and the construction industry hit the company hard. The escalation of the global recession resulted in the company missing its 2008 financial guidance and a commensurate drop in its share price.

Points to Ponder

Negative excerpts from the 2009 third quarter filing:
- "The Chinese economy has experienced a slowing growth rate due to a number of factors, including the global economic crisis, the appreciation of the RMB and economic and monetary policies adopted by the Chinese government aimed at preventing overheating of the Chinese economy and inflation. This has had a negative impact on the commercial and residential construction markets and the high-end jewelry markets into which the Company sells raw jade. As demand has declined, our customers have been negatively affected which, in turn, has resulted in a slowdown in customer orders and the inability of the Company to obtain new customers in the second half of 2008, and the first half of 2009. The Company cannot predict how long the downturn in the Chinese economy will last, the continuing impact of the downturn on its business and operating results and the timing of any subsequent recovery."
- "The Company has continued to receive orders from, and make sales to, its existing customers through its quarter ended September 30, 2009. However, the Company has not obtained new customers since the second quarter ended June 30, 2008. Four of the Company's nine customers have fulfilled their purchase obligations under their respective contracts with the Company. Two of the Company's customers remain obligated to purchase a total of 3,750 metric tons of raw jade, for a total purchase price of $11.5 million. However, as a result of the adverse impact of the downturn in the Chinese economy on these customers, the Company has informally agreed to extend the period in which the customers must fulfill their purchase obligations to a date to be mutually agreed upon in the future."
The current outstanding share count of 80 million is also another mitigating factor that dampened our enthusiasm.
The chart has been pretty erratic.

So, that is the half glass empty perspective.

Some investors may be able to find a silver lining in this story:

Jade reported strong third quarter 2009 results where EPS rose 60% to $0.08 on a 41.0% increase in revenues.
Jade reported strong results from its existing customer base leaving room for improvement if it can attract new customers.
I think we can all agree that the markets that JADA targets have drastically improved and could pave the way for more EPS growth. This could also offer hope that some of its customers past due purchase obligations may be satisfied.
- The increase in revenue resulted from an increase in orders of raw jade received by the Company from our customers due to better economic environment and the new sales policy of our company. Having experienced a slowing growth rate, Chinese economy is recovering and showing great improvement. This has a positive impact on the commercial and residential construction markets and the high-end jewelry market into which the company sells raw jade. The new sales policy, reduction on the rate of sales advances on new orders from 30% to 10%, is another factor that contributes improving the revenueJADA indicates that is not in need of capital

Without an interview,it's tough to make a definitive investment decision. However, the stock is selling substantially below its book value per share of $0.90 despite Armageddon being in the rear view mirror. Risky investors may want to consider JADA now, while conservative minds may want to wait for the release of year end results.

Investors should be aware of one more wrinkle:

The Company is obligated to pay the remaining balance of $903,074 owed to former GHL shareholders in connection with the Merger Transaction on or before March 31, 2010, together with interest at the rate of 4% per year.

Bbv Vietnam Sea Acquisition Co (BBVVF) - Blank Check Activity

Mon, 01 Mar 2010 05:00:00 GMT

BBV Vietnam S.E.A. Acquisition Corp. (OTC Bulletin Board: BBVUF, BBVVF and BBVWF) announced today that it has signed a definitive merger agreement with Migami, Inc..

About Migami, Inc

Migami, Inc. licenses drug-delivery systems and technologies to pharmaceutical companies for international distribution and develops and distributes anti-aging cosmetics world-wide, with a special emphasis on Asia.

No additional details are currently available on Migami. The GeoTeam will attempt to locate additional information.

Possible arbitrage strategy if shareholders approve the proposed business combination

Data to be considered: (We are searching for warrant amendments that could affect strategy)

Current Price of Common Stock: $8.00
Current Ask Price of Warrants: $0.40 (warrants have a wide bid/ask spread)
Strike price of Warrants: $5.00
Implied intrinsic value of warrants: $8.00 - $5.00= $3.00

Strategy

Buy the warrants at current price of $0.40.
If the business combination is completed and the warrants become exercisable then the warrants should approach the implied intrinsic value.
Profit = (New Value of Warrant, Properly Priced) minus $0.40.

Biostar Pharmaceuticals (BSPM) - Comments & Business Outlook

Mon, 01 Mar 2010 05:00:00 GMT

"2009 was a very positive year for Biostar. The success of our marketing strategy for our Xin Aoxing Oleanolic Acid Capsule ("Xin Aoxing Capsule") helped us achieve the best financial results in our company's history for 2009," commented Chairman Mr. Ronghua Wang. "We also experienced growing sales for our other products as we penetrated China's rural markets. For 2010, our focus is on driving higher sales volumes of Xin Aoxing Capsule in the existing and new provinces we serve, introducing new products, and leveraging our rural network sale strategy to generate incremental revenue growth," added Mr. Wang.

4th Quarter 2009 Guidance Ending December ^a

	4th Quarter 2009 Guidance	4th Quarter 2008 Reported	Period Change
GAAP Revenue	$52.0 to $54.0 million	$15.8 to $17.8 million	55.8% to 75.5%
Non-GAAP Operating Income ^b	$4.11to $5.11 million	$2.97 million	38.4% to 72.1%
Non-GAAP EPS	$0.12 to $0.16 ^c	$0.14	-14.3% to 14.3%
Fully Diluted Shares	25.05 million ^d	23.33 million	7.4%

FULL YEAR 2009 Guidance Ending December^a

	Full Year 2010 Guidance	Period Change	Full Year 2009 Guidance	Period Change	Full Year 2008 Reported
GAAP Revenue	$69.0 to $71.0 million	32.7% to 31.5%	$52.0 to $54.0 million	53.3% to 59.2%	$33.9 million
Non-GAAP Operating Income^b	n/a	n/a	$16.0 to $17.0 Million	105.1% to 117.9%	$7.8 million
Non-GAAP Net Income^b	$16.2 million to $17 million	33.3%	$12.1 to $12.8	80.1% to 91.0%	$6.7 million
Non-GAAP EPS	$0.62 to $0.65 ^c	22.1%	$0.51 to $0.53 ^c	70.0% to 76.7%	$0.30
Fully Diluted Shares	26.1 million	8.9%	23.96 million ^d	3.0%	23.26 million

Source: PR Newswire (February 25, 2010) (March 1,2009)

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b Non-GAAP EPS figures generally exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures. The GeoTeam® non-GAAP figures apply a 25% and 36% tax rate for Chinese and United States companies respectively.

^cThe company provided 2009 operating income guidance and 2010 net income guidance. The GeoTeam provided implied EPS figures from this data as well as implied full year 2009 net income figures.

^dGeoTeam assumption.

Visteon Corp (VSTNQ) - GeoSpecial Notes

Mon, 01 Mar 2010 05:00:00 GMT

Earlier today we mentioned that we are tracking the Visteon Corp story. We were able to locate verbiage in a document, filed by secured creditors on December 17, 2009, that states that current common stock holders' interest will be cancelled and thus deemed worthless if the proposed reorganization plan is approved. We are still attempting to locate a revised document, filed by unsecured creditors on January 19, 2010, for similar verbiage.

Visteon Corp (VSTNQ) - Special Situations

Mon, 01 Mar 2010 05:00:00 GMT

We are following the Visteon Corp story as the company:

Is reviewing creditors' plan that may enable Visteon Corp to exit bankruptcy
Reported a significant 2009 fourth quarter GAAP profit on increased sales.

This story entails significant risk.

It will take us some time to go through Visteon Corp financials to determine if the company reported a non-GAAP profit for the fourth quarter.
More importantly, even though a bankruptcy plan has been proposed, it has not yet been endorsed by the company. Investors need to be aware that reorganization plans often result in share holders' ownership stake being reduced or totally wiped out. We usually wait for the final approval of a plan before moving forward, when we have had great investment success. We will peruse court records to locate any documents pertaining to the reorganization plan.

ex-GeoBargain Alpha Pro Tech Ltd (NYSE AMEX:APT) reports strong 4th qtr.; mask sales to regress in 2...

Wed, 10 Mar 2010 14:05:00 GMT

ex-GeoBargain Alpha Pro Tech Ltd (NYSE AMEX:APT) reports strong 4th qtr.; mask sales to regress in 2010

GeoSpecial China Gerui Advanced Mate (NASDAQ:CHOP) crushes analyst estimate of $0.19. 4Th Qtr EPS co...

Wed, 10 Mar 2010 13:51:00 GMT

GeoSpecial China Gerui Advanced Mate (NASDAQ:CHOP) crushes analyst estimate of $0.19. 4Th Qtr EPS comes in at $0.27.

GeoBargain Harbin Electric Inc (NASDAQ:HRBN) exceeds analyst estimates fo $0.47 for 2009 4th Qtr. Re...

Wed, 10 Mar 2010 13:37:00 GMT

GeoBargain Harbin Electric Inc (NASDAQ:HRBN) exceeds analyst estimates fo $0.47 for 2009 4th Qtr. Reports EPS of $0.62. Comments strong.

Asia Entertainment & Reso Wts (OTC BB:AERLF) attains new 52-wk high. Coded as a GeoSpecial @ $1.70 ...

Tue, 09 Mar 2010 20:40:00 GMT

Asia Entertainment & Reso Wts (OTC BB:AERLF) attains new 52-wk high. Coded as a GeoSpecial @ $1.70 based on arbitrage opportunity. See prior notes.

China Agri-Business Inc (OTC BB:CHBU) coded as a GeoSpecial @$0.53 based on repricing of risk.

Tue, 09 Mar 2010 20:39:00 GMT

China Agri-Business Inc (OTC BB:CHBU) coded as a GeoSpecial @$0.53 based on repricing of risk.

Please see new GeoBargain note on Soko Fitness & Spa Group (OTC BB:SOKF)

Tue, 09 Mar 2010 16:53:00 GMT

Please see new GeoBargain note on Soko Fitness & Spa Group (OTC BB:SOKF)

Rick Pearson highlights GeoBargain China Carbon Graphite (OTC BB:CHGI). Please see our original res...

Tue, 09 Mar 2010 15:01:00 GMT

Rick Pearson highlights GeoBargain China Carbon Graphite (OTC BB:CHGI). Please see our original research note on the stock.

GeoBargain China MediaExpress Holdings (NYSE AMEX:CCME) signs exclusive agreement to Provide Televis...

Tue, 09 Mar 2010 14:31:00 GMT

GeoBargain China MediaExpress Holdings (NYSE AMEX:CCME) signs exclusive agreement to Provide Television Programming and Advertisements for the Qingdao Airport Express Buses.

Sinocoking Coal Shares Explode

Mon, 22 Feb 2010 17:34:00 GMT

News summarizing Sinocoking Coal (NASDAQ:SCOK) business opportunities has extended its shares strong momentum into this morning's trading session. Recall, we added the stock to our data base on February 10, 2009 at $4.30. At near $20.00, SCOK now trades a P/E of 15 on June ending 2010 forecasted implied EPS of $1.26. Investors should be aware that as SCOK enters 2011, it may require financing to achieve its aggressive expansion plans to expand capacity.

Now, we are curious if GeoBargains L&L Energy (NASDAQ:LLEN) and Songzai Intl Holdings (OTC BB:SGZH) will follow suit.

Arriving at short-term conclusion on SGZH is a little tough since the company has limited investor relations and had what appears to be some temporary issues that negatively impacted its 2009 third quarter results. Still, the company trades at a P/E of 5 and maintains a low price to book multiple.

LLEN trades at a P/E of 9 on 2010 EPS guidance of $0.94 (fiscal year ending April) and is well into its expansion strategy.

Valuation Comps.	Trailing P/E	2010 P/E	P/Book
SCOK	15	15	6.26
SGZH	5	n/a	1.77
LLEN	18^a	9	6.94

^aAdjusted for a 25% tax rate.

Other Chinese coal companies include Puda Coal (NYSE Amex:PUDA), Yanzhou Coal Mining Co (NYSE:YZC) , China Coal Energy Co (PINK:CCOZF) .

GeoInvesting.com Disclosure

Positions: Long LLEN, SGZH, no positions in SCOK, PUDA, YZC or CCOZF

You agree that you shall not republish or redistribute in any medium any information on the GeoInvesting website without our express written authorization. You acknowledge that GeoInvesting is not registered as an exchange, broker-dealer or investment advisor under any federal or state securities laws, and that GeoInvesting has not provided you with any individualized investment advice or information. Nothing in the website should be construed to be an offer or sale of any security. You should consult your financial advisor before making any investment decision or engaging in any securities transaction as investing in any securities mentioned in the website may or may not be suitable to you or for your particular circumstances.

Chinese Pharmaceuticals to Watch Part 1

Fri, 19 Feb 2010 14:00:00 GMT

by Zack Buckley

When shopping in the supermarket, shoppers always flock to the half off sales. In the stock market, a half off sale creates worldwide panic. Although these circumstances are actually exceptional for long term investors, most people fear the world is ending. I welcome half off sales in the stock market because they are a great way to build long term wealth.

The Chinese pharmaceutical industry presents multiple bargains for value investors. Pharmaceuticals sales in China have been growing at a rate of 15.5% annually from 2005-2010. There is a strong demand for pharmaceutical products in China due to growing income, a larger middle class, and a rapidly aging population. The elderly population in China grew from 130 million in 2000 to 171 million in 2010. Healthcare spending by the elderly is 5 times higher.

In addition the government has made healthcare one of its primary initiatives; as a result, a Universal Health plan package geared to deliver $123 billion in the next three years has been issued.

The industry is rapidly consolidating, where the market leaders are rapidly growing in value. Characteristics of future markets leaders are

A strong nationwide sales and distribution network
Strong research and development capabilities
Access to capital in order to expand

While some companies trade with P/E ratios as high as 63, Lotus pharmaceuticals has a P/E of only 5.12. You would expect a low P/E to be indicative of a stalwart company. However, Lotus Pharmaceuticals grew revenues at 59% from 2005-2008 and has net income up 700% since 2005. Lotus Pharmaceuticals revenue streams are a combination of pharmaceuticals wholesaling and the development and sale of proprietary drugs. Their primary growth strategies are expanding their distribution sales channels in order to increase sales, expanding production capacity through the building of a large factory, and bringing new drugs to the market by partnering with top R&D institutions. We believe a company this cheap should not be overlooked. In summary, lotus is a comprehensive company with both strong manufacturing capability and a nationwide distribution network, great R&D capabilities with a new drug pipeline including a Class I drug, and a very attractive valuation.

China Medicine Corp (OTCBB:CHME) has a current P/E ratio of 5.91 and P/S of 0.69. The company is rapidly growing and has developed a proprietary product rADTZ, which is made to decrease animal mortality rates by fighting Aflatoxins, should substantially enhance revenues. They estimate the addressable market for rADTZ is up to $4 billion and that the successful commercialization and licensing of rADTZ has the potential to substantially improve revenue and profit picture in the years to come. Their distribution consists of 300 hospitals and 500 other medical companies, which leads to 2000 drug stores. Revenues are up to 53 million in 2008 from 15 million in 2005. A company like this is extremely cheap. A comparable company is 3sBio, which has a P/E of 22 and a P/S of 3.96. China medicine is much cheaper than 3sBio with better return on equity and profit margins.

China Yongxin Pharma Inc (OTCBB:CYXN) has a current P/E ratio of 4.9 and a P/S ratio of .25. The company has three divisions, they run 93 retail drugstores in China, similar to Walgreens, they are a distributor of pharmaceutical products, and they have their own proprietary ginseng products. The company s products are Chinese traditional medicines, chemical pharmaceuticals preparations, flower teas, natural health products, healthy food, cosmetics, and medical equipment. CYXN will focus on expanding its retail chain across China. The company has continued to grow its wholesale business and is moving to expand the higher margin retail and manufacturing activities in the pharmaceutical business. Management also plans to eventually uplist, once the company qualifies.

Company	Market Cap, $Millions	P/E	Price/Sales	Rev Growth CAGR %, 2007 to 2008	Net Income CAGR Growth %, 2007 to 2008
China Yongxin Pharma Inc (OTCBB:CYXN)	20.2	5.0	0.33	23%	13%
China Nepstar Chain Ads (NYSE:NPD)	705.6	25	2.0	22%	30%
Lotus Pharmaceuticals (OTCBB:LTUS)	65.6	5.1	0.96	51%	11%
China Medicine Corp (OTCBB:CHME)	53.9	5.9	1.0	27%	33%
3 Sbio Inc Ads (NASDAQ:SSRX)	239.9	24	0.99	35%	-23%

It is clear that these are three great bargains in the Chinese pharmaceuticals industry. I have a hard time believing markets are efficient when I look at these companies. These companies seem to be trading well below their intrinsic values, although I reserve the right to be wrong. In fact, I have founds tons of undervalued Chinese ADRs. That is why I am going to China this summer to visit as many publicly traded companies as I can fit into two and a half months. In the past three years on their trips to China, The Motley Fool researchers have identified companies that are now all up between 100-500% since their recommendations, I hope to do the same.

Author Disclosure: Long all mentioned stocks, at time of this writing.

Hidden Clues on Franklin Wireless Corp. (OTC BB:FKWL)

Wed, 17 Feb 2010 19:39:00 GMT

Franklin Wireless Corp. (OTC BB:FKWL) was coded as GeoSpecial at $1.90 based on break out quarter.

It appears that Franklin Wireless Corp., an emerging developer and marketer of wireless broadband data communications products, is about to report a break out quarter. The company filed a NT 10Q (late filing notice) where it indicates that sales for its fiscal second quarter ended December 2009 exploded to $25.0 million vs. $4.6 in the prior year. To put this into perspective, FKWL reported revenues of $24 million for all of it s 2009 year ended in June.

Potential risks:

   No details were provided on net income
   Not sure if this is a one time event
   The company does not generally issue press releases, so news could fall on deaf ears.

We will issue more details once they become available.

GeoInvesting.com Disclosure

Positions: Long FKWL

You agree that you shall not republish or redistribute in any medium any information on the GeoInvesting website without our express written authorization. You acknowledge that GeoInvesting is not registered as an exchange, broker-dealer or investment advisor under any federal or state securities laws, and that GeoInvesting has not provided you with any individualized investment advice or information. Nothing in the website should be construed to be an offer or sale of any security. You should consult your financial advisor before making any investment decision or engaging in any securities transaction as investing in any securities mentioned in the website may or may not be suitable to you or for your particular circumstances.

2/17/2010 GeoUpdate - China Agritech Inc (NASDAQ:CAGC), Culp Inc (NYSE:CFI)

Wed, 17 Feb 2010 16:12:00 GMT

China Agritech Inc (NASDAQ:CAGC)

Added to GeoBargain list on 8/24/2009 at $2.95 ($5.90 post 1 for 4 reverse split and a 2 for 1 forward split).
Current price: $21.60

CAGC had a huge run from in its initial inclusion on the GeoBargain list on. The company should report 2009 EPS of close to $1.30, giving it a trailing P/E of around 16. Because of the stock s low P/E, we will keep it on the GeoBargain List. We generally remove a stock from this list if it attains a trailing P/E of 25 or a forward P/E of 15. The company has issued strong 2010 revenue guidance. However, given the stock s huge run, uncertainty surrounding 2010 EPS and CAGC's recently shelf offering (giving them the ability to issue stock) may make it prudent to take some profits off the table.

We do think that management has an under-promise over-deliver type of philosophy, so we will monitor developments closely for:

News that would increase guidance such as an acquisition
Clarity on 2010 EPS Guidance
Trading opportunities if the stock pulls back

Culp Inc (NYSE:CFI)

Coded as GeoSpecial on the Radar on 12/7/2008 at $8.50. See alert.
Issued a trading alert on 2/8/2010 at $11.50. See alert.
Current Price: $15.88

We are removing CFI from the GeoSpecial on the Radar List and cashing in on our positions initiated on February 8, 2010. The stock's price elevated much faster than we had anticipated and with a P/E of 15 on 2010 EPS, it seems fairly priced in the short-term. We will continue to monitor CFI as the company has been smashing analyst estimates.

GeoInvesting Terms of Service.

Conference Call Intel - Cpi Aerostructures (NYSE Amex:CVU)

Tue, 16 Feb 2010 20:10:00 GMT

by Maj Soueidan, President GeoInvesting

Listening to conference calls is one of the many strategies I apply for gathering Intel on future prospects of companies. Even though these calls are considered public information, investors just don t have the time to look beyond a press release, giving us a chance to take advantage of information inefficiencies. I particularly salivate at opportunities to listen to calls between earning releases, such as investor presentations, when investors often become increasingly lazy. I look forward to selling them my shares at higher prices when the company repeats bullish information in its earnings press release.

As I just issued an update on Cpi Aerostructures (NYSE AMEX:CVU) on January 26, 2010, I was eager to listen to an investor presentation replay that took place on February 11, 2010. I hoped to attain a better grasp on my assumption that CVU would report a stellar 2009 fourth quarter as well as glean insight into the growth outlook heading into 2010.

I have been on hundreds of conference calls and I can say that this is one of the most bullish I have experienced. So much so, I added to my position. CEO, Ed Fred, was articulate and inferred several times that his aggressive EPS guidance for 2009 of $0.63 to $0.69 and long term growth expectations, supported by its new business model that focuses more on subcontracted work than primary government contracts, are still in tact. I found this particularly interesting since this is similar strategy Electronic Control Securities (OTC BB:EKCS), a stock I just profiled on the street, has embarked upon.

Unfortunately, the company did not provide specific 2010 guidance. I found this odd since during the presentation the company expressed confidence that it may able to achieve net income of $8 million in 2011 on $75 million in revenues. As in my initial article, I am left to ponder what 2010 might look like. The problem lies with the three year compounded annual growth rate (CAGR) assumption CVU issued at the end of 2008 of 50% to 60% for net income and 30% to 35% for revenues. Without getting too technical, the CAGR formula basically only takes into account your beginning and end year periods. So, over a three year period, as long as you hit the the year three number implied by the formula, it doesn t matter what happens in year two. Regardless, loaded with the ammo of 2011 expectations and a confirmation of its long-term growth forecast, I came up with a best efforts 2010 EPS target of $0.96. Analyst estimates are calling for 2010 EPS to reach $1.01. I urge investors to make their own assumptions and listen to the conference call replay.

CVU plans to comment on 2010 guidance in its year end press release.

Additional key points from the presentation:

Has long term visibility due to contract pipeline and its emphasis as a subcontractor to defense companies such as Lockheed Martin (NYSE:LMT) , Northrop Grum Hol (NYSE:NOC) and Sikorsky Aircraft
Guidance does not include nearly 400 million of unawarded contract bids
Guidance does not account for the government having to devote funds to the repair of planes that return home from IRAQ.
Guidance does not include upside from contracts CVU is currently involved in.
Room for gross margin improvement from 25% to 30% - 35%.
Happy with results and will continue to get better

GeoInvesting.com Disclosure

Positions: Long CVU, EKCS

You agree that you shall not republish or redistribute in any medium any information on the GeoInvesting website without our express written authorization. You acknowledge that GeoInvesting is not registered as an exchange, broker-dealer or investment advisor under any federal or state securities laws, and that GeoInvesting has not provided you with any individualized investment advice or information. Nothing in the website should be construed to be an offer or sale of any security. You should consult your financial advisor before making any investment decision or engaging in any securities transaction as investing in any securities mentioned in the website may or may not be suitable to you or for your particular circumstances.

Investment Strategy For 2010

Tue, 16 Feb 2010 17:45:00 GMT

by Maj Soueidan, President GeoInvesting

Noise Creates Pullback. It has been a turbulent few weeks for U.S. listed China stocks. The financial markets were initially spooked by China s decision to enact soft liquidity tightening measures that included a temporary restriction of lending in January and an increase in reserves for some banks.

This news combined with the sharp run-up the China sector has experienced and concerns over debt problems in Portugal, Spain and Greece gave investors an excuse to lock in profits.

There have also been ramblings by skeptics that China is the midst of a real-estate bubble and that its banks are overextended with risky loans that could lead to a credit meltdown. This is all the more reason for China to be proactive!

I have never claimed to be an expert on macroeconomic events nor will I start now. If Bernanke and his esteemed team can t get it right my chances are doubly limited. But I will say this: it seems a little too early to proclaim China s growth story game, set, and match. It is illogical to paint as a bleak a picture as pundits would have it, asserting that China growth is fake-fueled only by stimulus.

Whether they like it or not, history shows that appropriate fiscal stimulus is needed to spark a recovery. And be sure, China has the capabilities for more stimulus funds if required, which it will deploy if necessary. I find it amusing that the half-glass-empty camp moans that the Chinese leadership is embarking on goals to slow growth from 10.7% to around a targeted 8% growth. The latter was always the expectation, and now it s not enough? I see nothing wrong with China s proactive move as the government obviously sees strong signs of future growth and is taking early steps to control inflation and possible bubbles. These are moves that the current critics claimed we should have enacted during the pre-2008 expansion to avoid economic disaster.

Thus Far in 2010: News from China is Bullish

China exports recently turned positive
The IMF just increased its global growth forecast.
China lifted its January loan restrictions and makes comments saying that it is committed to growth and low inflation.
Australia coal contract with china. Biggest ever show global growth is gaining steam.

I prefer to also listen to companies such as Orient Paper (NYSE AMEX:ONP), China Agritech Inc (NASDAQ:CAGC), China Fire & Security Group (NASDQ:CFSG), and Telestone Technologies (NASDAQ:TSTC) that have begun to preannounce solid 2010 financial expectations to guide my current outlook.

Pull backs are healthy. To abandon China now, especially after the sectors retreat, would be foolish. I am not sure that investors have a choice. Where else do you have companies consistently growing EPS at 30%+ and selling at ridiculously low valuation multiples? I believe that once U.S. investors really discover this hidden market it will only get better. Volatility will still persist due in part to what I believe is an overall lack of investor participation.

Dilution Could Limit Opportunities. Although I view the pull back in Chinese shares as healthy that will likely present a gift for investors who have the cahanos to put their money to work, we certainly have to be more selective and remain cognizant of risk this time around. One of the major risks that could put a slight damper on opportunities is the amount of equity some Chinese firms are raising at insanely cheap valuations. This could obviously limit P/E expansion. I am hoping that financing terms will improve as more investors find this space and balance supply and demand, helping to reduce volatility. Also, keep in mind that due to the Chinese New Year, the first quarter is typically weak for many Chinese firms.

Global Recovery in its infancy. We have to remember it has only been a year from economic doomsday and the rest of the world has barley begun to contribute. As long as global governments stay committed to maintaining tenacious recovery policies and technology innovation forges ahead, I am hopeful a slow recovery will be sustained. This can happen despite political rhetoric, such as Obama s muted attempts at socialism. In the end, I prefer not to fight the Fed and world governments, a battle that could end in regret. Last week s positive news outlining a plan for Greece s debt problems is a case and point.

My 2010 Strategy. In 2010, I have begun place emphasis on U.S. Micro-Cap plays as they have lagged the Chinese stock moves. If you search hard enough, you will find many smaller firms that are experiencing nice upticks in revenues and earnings per share. These are the same companies being overshadowed by the lackluster top-line growth of their larger cap counterparts.

Even though I am still bullish on China, I have to be cognizant that its government measures to control growth could negatively impact investor psychology, leading to volatility in the sector. Thus, I will still selectively invest in China and increase the weight of micro-cap U.S. investments to tame my portfolio s volatility.

Stocks to Follow in 2010

Symbol	Closing Price*	Industry/Business	Reasons Bullish**
U.S. Stocks
Alpha Pro Tech Ltd (NYSE Amex:APT)	$3.69	Medical Appliances & Equipment/Roofing Products	Stock pulled back sharply despite strong growth outlook
Astrotech Corp (NASDAQ:ASTC)	$2.53	Aerospace/Defense Products & Services	Exploring ways to enhance shareholder value; This is a large part of ASTC business
Buckeye Technologies Inc (NYSE:BKI)	$11.50	specialty fibers and non-woven materials	Exceeds analyst estimates; Bullish outlook
Bofi Holding Inc (NASDAQ:BOFI)	$13.01	Online Banking	Online bank survives the crisis and has impeccable EPS track record
Cpi Aerostructures Inc (NYSE Amex:CVU)	$6.20	Aerospace/Defense Products & Services	2009 4^th qtr should be strong; Positive long term outlook
Iec Electronics Corp (NYSE Amex:IEC)	$5.81	Contract manufacturing/testing	Issues bullish guidance; Impeccable growth track record
Electronic Control Securities (OTC BB:EKCS)	$0.33	Defense	Turned profitable; Healthy contract backlog
Obn Holdings Inc (OTC BB:OBNI)***	$0.10	Diversified Investments	Just turned profitable; Selling Under book
G Willi-Food Intl (NASDAQ:WILC)	$6.9	Processed & Packaged Goods	Revenue growth may begin to occur
U.S. Listed Chinese Stocks
Biostar Pharmaceuticals (OTC BB:BSPM)	$3.85	Pharmaceutical	Bullish guidance; Hot sector
China MediaExpress Holdings (NYSE Amex:CCME)	$11.85	Advertising	Bullish guidance; Shareholder friendly management
China-Biotics Inc (NASDAQ:CHBT)	$14.83	Probiotics Products	Hired CFO; Strong EPS growth continues
China Kangtai Cactus Bio (OTC BB:CKGT)	$2.32	Cactus Based Products	Had break out 3^rd quarter
China Yida Holding Co (NASDAQ:CNYD)	$11.85	Leisure/Advertising	New ventures will begin to impact business
Huifeng Bio-Pharma Tech (OTC BB:HFGB)	$0.98	Pharmaceutical	Issues bullish guidance
New Energy Systems Group (OTC BB:NEWN)	$6.80	Batteries	Bullish guidance; Makes accretive acquisitions; future dilution unlikely
Orient Paper (NYSE Amex:ONP)	$9.96	Paper & Paper Products	Bullish guidance; EPS In breakout mode
Telestone Technologies (NASDAQ:TSTC)	$18.69	Communication Services	Bullish guidance; AR position continues to improve

* As of February 12, 2010
** All but a few are selling at very low P/E to growth ratio (PEG)
*** Emphasis on Japan

See Five Stocks Set to Thrive in 2010 - CHBT, NEWN, HFGB, BOFI, IEC

GeoInvesting.com Disclosure

Positions: Long ONP, CAGC, CFSG, TSTC, APT, ASTC, BKI, BOFI, CVU, IEC, EKCS, OBNI, WILC, BSPM, CCME, CHBT, CNYD, NEWN,

You agree that you shall not republish or redistribute in any medium any information on the GeoInvesting website without our express written authorization. You acknowledge that GeoInvesting is not registered as an exchange, broker-dealer or investment advisor under any federal or state securities laws, and that GeoInvesting has not provided you with any individualized investment advice or information. Nothing in the website should be construed to be an offer or sale of any security. You should consult your financial advisor before making any investment decision or engaging in any securities transaction as investing in any securities mentioned in the website may or may not be suitable to you or for your particular circumstances.

Five Stocks Set to Thrive in 2010

Thu, 11 Feb 2010 20:50:00 GMT

by Maj Soueidan, President GeoInvesting

Picks on the China Front - CHBT, NEWN and HFGB

China-Biotics Inc (NASDAQ:CHBT). Until recently, probiotics producer China Biotics shares had been in a moderate uptrend, a reflection of strong sales EPS growth and allowing the company to consistently surpass analyst estimates. However, since the CFO announced his resignation on October 23, 2009, shares had retreated by as much as 30%. I often track high level management departure situations in order to take advantage of reduced stock prices caused by investor trepidation and uncertainty. If I can determine that there were no material reasons for the departure and that the position will be filled expediently, I can assume that the stock will recover its losses. On January 22, 2010 CHBT announced the hiring of a new CFO. As luck would have it the news has become lost amidst the markets retreat. With a P/E of less than 10 and its recent above average EPS performance, I am banking that investor appetite for CHBT shares will return.

My thoughts have been reinforced as CHBT just announced that its fiscal 2010 EPS rose 45.45% to $0.32 on a 47.47% increase in revenues to $15.8 million.

New Energy Systems Group (OTC BB:NEWN). New Energy Systems Group operates in the lithium battery industry. On September 15, 2009, Richard Pearson highlighted the stock when the symbol was CMTP, prompting me to take a closer look at its growth story and add to my share position. The move paid off, but I am expecting more returns from my investment.

I recently interviewed management to determine if shares would follow a similar pattern achieved by shares of Hong Kong Highpower Tech (NASDAQ:HPJ) which attained a January high of $9.82 from its October low of $2.87 and sported a forward P/E of 24. After interviewing management, I am more confident that New Energy may have the vigor to lift shares to new heights.

Prior to mid 2008, NEWN primarily manufactured just battery shells. While not a horrible strategy to target a battery market growing 20% annually, the company felt it needed to modify its business plan to gain a long-term competitive advantage. To that end, it embarked on an acquisition strategy to vertically integrate its business, add new product lines and enter international markets. In fact, New Energy recently announced a $3 million deal in Europe, the company s first big deal outside of China.

This new focus has resulted in the ability to manufacture, assemble and distribute end products as well as beef up its R&D capabilities. New Energy claims to be the only vertically integrated player of its type in China and is experiencing cost savings that are passed on to the retailer. In fact, the company claims that it is actually being approached by some major and well known retailers in the U.S. The new model has increased its customer base and also opens up an additional revenue source as a private label manufacturer to original equipment manufacturers, or OEM s.

The company has issued EPS guidance of $1.23 for 2010, which assumes a tax rate of approximately 22%, giving it a forward P/E of 5.3x for a company that grew nearly 80% for the first nine months of 2010. More exciting is the fact that its guidance does not include international business, where margins are 4 times higher than domestically.

I was also glad to hear that the company sees no current need to raise money in the form of equity. The stock has gone relatively unnoticed which could change once its shares graduate from the bulletin board, hopefully in the near future.

Also encouraging are the company s efforts going forward to increase visibility through investor relations and the fact that they plan to participate in an upcoming Rodman conference in March. These are sure fire ways to let investors know that they care about shareholder value.

Huifeng Bio-Pharma Tech (OTC BB:HFGB). This stock was one of several that was referenced in a past GeoTeam article. It recently eclipsed its book per share of $0.55 and had a brief stint over $1. HFGB is a diversified pharmaceutical firm. The company recently hired an IR firm, reviving the hope that it may be ready for bigger things. In fact, on February 4^th, 2010, the company issued 2009 net income guidance around $3 million and 2010 guidance of $4.5 to $5.0 million. The stock currently trades at about a P/E of 6 on 2009 implied EPS guidance of $0.13.

Picks on the U.S. Front BOFI and IEC

Bofi Holding Inc (NASDAQ:BOFI). Shares of online banking operator BOFI have bucked the recent market drop and actually hit a high of 13.72 on February 11, 2010. Since the Geoteam highlighted BOFI on November 3, 2009, the company has:

Considered raising capital to expand growth initiatives
Attracted Wall Street analyst coverage
Reported superb top and bottom line growth for is fiscal 2010 second quarter.

I continue to believe that investors will eventually price BOFI shares more along the lines of an exciting growth company rather than a mundane financial player.

Iec Electronics Corp (NYSE Amex:IEC). A recent purchase of mine is quietly garnering investor interest. In simple terms, IEC offers contract manufacturing services and tests circuit boards to ensure that its clients processes function properly during pre and post market applications. The company addresses the customers unique needs through innovation and specifically targets online technology monitoring services, a business model it believes is unmatched by its competition and can lead to long term loyalty.

Its efforts resulted in revenues and fully taxed EPS that grew from $40.9 million and $0.04 per share in 2007 to $67.8 million and $0.32 per share in 2009. A recent acquisition has opened up a new growth venue, enabling the company to meet the underserved needs of companies that possess older legacy technology whose service contracts have expired.

IEC recently issued impressive financial guidance for fiscal 2010, reflecting its acquisition as well as organic growth. SEC filings also indicate insider buying activity, even as the stock is near its 52 week high. See company presentation.

GeoInvesting.com Disclosure

Positions: Long CHBT, NEWN, HPJ, HFGB, BOFI, IEC

You agree that you shall not republish or redistribute in any medium any information on the GeoInvesting website without our express written authorization. You acknowledge that GeoInvesting is not registered as an exchange, broker-dealer or investment advisor under any federal or state securities laws, and that GeoInvesting has not provided you with any individualized investment advice or information. Nothing in the website should be construed to be an offer or sale of any security. You should consult your financial advisor before making any investment decision or engaging in any securities transaction as investing in any securities mentioned in the website may or may not be suitable to you or for your particular circumstances.

Cpi Aerostructures Gears for Strong Fourth Quarter

Tue, 26 Jan 2010 21:00:00 GMT

In 2009, The GeoTeam alerted investors to hidden clues for a handful of stocks via related notes and articles.

Merrimac Industries Inc (NYSE Amex:MRM) was mentioned in a note posted December 13, 2008. Six day after our call that the company was on the sell block the company announced it would be acquired .
After an article on November 12, 2009, China Armco Metals (OTCBB:CNAM) subsequently had, at its high, gained 31% .
Since mentions of Hong Kong Highpower Tech (NASDAQ:HPJ) and Amcon Distributing (NYSE Amex:DIT) in a November 2, 2009 article, at their highs, the stocks had gains of 264% and 29%, respectively.

In line with this theme, we believe three clues hint that Cpi Aerostructures (NYSE Amex:CVU) could report a rather significant 2009 fourth quarter.

1. Throughout 2009 Cpi has issued guidance, calling for net income of $3.9 million to $4.3 million and revenue of $42 million to $45 million. Using midpoint figures and the company's 2009 nine month financial results, the guidance implies earnings per share will increase 80.0% to $0.27. Sales would also rise 35.9% to $12.5 million.

2. In conference calls, the company has repeatedly stressed that if it believed it could not meet its guidance it would relay a message to Wall Street. Well, it is the beginning of the new year and management has not issued such a message, strengthening our confidence that the fourth quarter will be strong.

3. On January 14, 2010, a press release was issued stating that fourth quarter order flow had intensified.

What we don't possess is specific information on the company's 2010 forecast to be provided in conjunction with the 2009 year end results. We generally prefer to invest in companies that are capable of achieving consistent 30% EPS growth, so we will eagerly await the 2010 guidance. That being said, Cpi has offered additional clues indicating 2010 will be a year of growth:

1. In its 2008 fourth quarter financial release Cpi offered insight into its long-term growth goals in sales and net income growth:

"Using 2008 as the baseline, for the three-year period ending in 2011, we expect to achieve a compound annual growth rate for revenue in the range of 30% to 35%, with a resulting compound annual growth rate for net income in the range of 50% to 60%.

2. The company offered broad bullish commentary regarding 2010 prospects:

We expect 2010 to be another year of growth and we plan to issue our guidance when we announce results for the 2009 fourth quarter and year.

The GeoTeam had hoped the company could have been slightly more specific.

3. Per its third quarter financial report:

"Unawarded solicitations remain at a high level with open solicitations totaling a maximum realizable value of approximately $393 million."

If the company can confirm 2010 EPS growth of at least 30%, CVU may offer a compelling opportunity for both growth and value investors. The stock is trading at a P/E of 9.32 on 2009 analyst EPS estimate of $0.66 and near its book value per share of $5.92.

Investors also have to be cognizant of some risks:

There may be a tendency for CVU to report lumpy quarters at times, a situation we are hoping will change as the company grows.
On September 17, 2009 CVU filed an S-3, enabling the company to raise $10 million. This could be dilutive or accretive depending on use of proceeds (although the company has expressed that accretive acquisitions are part of its overall strategy).

GeoInvesting.com Disclosure

Long CVU

You agree that you shall not republish or redistribute in any medium any information on the GeoInvesting website without our express written authorization. You acknowledge that GeoInvesting is not registered as an exchange, broker-dealer or investment advisor under any federal or state securities laws, and that GeoInvesting has not provided you with any individualized investment advice or information. Nothing in the website should be construed to be an offer or sale of any security. You should consult your financial advisor before making any investment decision or engaging in any securities transaction as investing in any securities mentioned in the website may or may not be suitable to you or for your particular circumstances.

December Qtr.	4th Quarter 2009 Guidance	4th Quarter 2008	Period Change
GAAP Revenue	$7.7million	$6.3 million	22.2%
GAAP EPS	n/a	$0.03	n/a
Tax Rate	n/a	n/a	n/a
Fully Tax-Adjusted GEO Supplied Non-GAAP EPS ^a,b	$0.13	$0.13	0.0%