I expect that revenue growth for this lithium-ion battery maker will be massive following its two recent acquisitions, but it remains to be seen how this will translate to earnings per share given the significant and not fully transparent issuance of equity.

As a strong positive, this company has also been very insistent that I go and tour its new facilities, so I am guessing it has some impressive new operations that management is eager to show off.

I hope to make such a tour in January and meet the company's new chairman, Weihe Yu. In short, the valuation on this stock is currently cheap, but for good reason.

I view the appointment of Weihe Yu (formerly CEO of the company's recent acquisition target) as a positive, but I caution readers that the company still does not have an independent board, making it ineligible (for now) for listing on Nasdaq or Amex and leaving open the possibility of less than optimal (from a shareholder perspective) terms on acquisitions and financings.

On the other hand, if New Energy Systems is able to execute with the same level of success as Hong Kong Highpower Technology, it will have the potential for explosive growth.

The two companies are in identical businesses and are neighbors in the same Shenzhen business park.

Rodman & Renshaw analyst Amit Dayal initiated coverage on this stock in August when the price was $1.17 and the daily volume was only about $20,000. His target was $5.00, which I strongly questioned at the time because my own target being only about $3.50. When shares stabilized in the $5.00 range I called him to congratulate him on the great stock pick and for his better understanding of the battery business than my own.

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