Fuqi International ( (FUQI) has been growing at a rapid pace and has an incredibly strong balance sheet with a cash balance of $173 million and a market cap of only $330 million. With a P/E slightly above 5 and exploding earnings, this is an interesting opportunity. Some downsides are that Fuqi has recently had some controversy when it restated earnings. We would like to see the company generate cash. Although Fuqi has blowout earnings, shareholders are yet to see positive cash flow.
China North East Petroleum (NEP) is engaged in the exploration and production of crude oil in Northern China. If you believe that China is hungry for energy and the next crisis could be related to the global oil production surplus going into a deficit, this is a practical way to capitalize. It's hard to say since we're waiting on a report that could send the share price skyrocketing. To do this, all China North East needs to do is offer non-GAAP guidance on a forward basis.
I've been following China Redstone Group (CGPI.OB) since mid-February when I was forced to pass up a purchasing opportunity that has since returned over 100%. It launched under the ticker APBS and recently retickered. Fully diluted, my share count is 13.4 million and for fiscal I'm looking at top-line revenue of $36 million and net income of $15.8 million. Did you know that the death care industry has consistently ranked among the top 10 most profitable industries in China? You do now.
Sinohub (SIHI) is involved in electronic sales although it doesn't modify the products in any way. It provides packing, warehousing, logistics, and import/export services. Sinohub currently trades at a P/E of just over 6. The company just released 2010 revenue guidance of $180 million, not bad for an expanding $85 million company. Not bad at all.Gold Horse (GHII.OB) is a speculative play that will be very rewarding to shareholders if it is able to continue gaining construction contracts. Gold Horse is a construction company in Hohhot, the capital of Inner Mongolia trading at one-sixth of book value and four times earnings. The company has some recurring streams of revenue that should continue generating money for shareholders. Investors should be very careful as there was some question as to whether Gold Horse would go bankrupt, but recently it secured more construction contracts. We have tried endlessly to get in touch with the U.S.-based Chief Financial Officer Adam Wasserman and unfortunately are still waiting for a response.
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