posted by The Traveller on Saturday, December 12, 2009
Biostar Pharmaceuticals (BSPM): up 20.19% for the week, total return 32.98%
The Biostar story is just beginning to unfold. There is a nice article by Maj Soueidan on TheStreet.com that tells the story again with some new details.
China Agritech (CAGC): up 2.21% for the week, total return 38.54%
China agricultural stocks have been very strong in the past four weeks. After having exploded from below $19 to the low $30s this month, CAGC is currently consolidating its gains. The stock has been added to the IBD100 last weekend. On Friday China released economic numbers which point to inflation for the first time this year. This could give ag stocks in general a further boost.
China Architectural Engineering (CAEI): up 23.81% for the week, total return 21.50%
On Thursday CAEI was rebounding strongly on high volume based on technicals. Despite its currently weak fundamentals, remember that this is a world class engineering firm with a track record of many large and prestigious projects.
China Armco Metals (CNAM): down 3.08% for the week, total return -6.25%
China Armco didn't do anything this week. The company expects to launch operations in its steel recycling and scrap metal recycling business early in 2010. The recycling facility is expected to be capable of recycling one million metric tons of scrap metal per year which will position the Company as one of the top 10 largest recyclers of scrap metal in China.
China Biologic Products (CBPO): up 1.55% for the week, total return 15.00%
Despite having moved up to Nasdaq, trading volume is still low and there isn't much accumulation of the stock yet. CBPO is a value play in the Chinese healthcare sector that is still under the radar... we just have to be patient here.
China Kangtai Cactus (CKGT): up 22.73% for the week, total return 42.94%
Strong week for China Kangtai which brought a new 52-week high at Friday's close. And all that on no news from the company. My price target for the stock is still far away and shows room for a further double from current levels.
China North East Petroleum (NEP): up 20.18% for the week, total return 35.11%
I have totally underestimated this stock, to be honest. Despite a strong dollar and weak oil dropping below $70 this week, NEP has skyrocketed above the previous high of the year and scratched the $7 mark already. I had only added a quarter position to the China portfolio for concerns about falling oil prices dragging NEP down but that is apparently not happening. If you had bought more of the stock in the $5 area or below, congratulations.
I am doubling my position in the China Portfolio here. I am ADDING 500 NEP for Friday's close at $6.85. I am also raising the target price from $7.50 to 8x 2010e EPS of $1.28 to $10.20.
China Recycling Energy (CREG): up 24.10% for the week, total return 21.91%
China Recycling successfully raised $26.75 million to finance phase 2 and 3 of the Erdos TCH power generation project. And this financing happened without any dilution to shareholders. With a little delay the stock jumped to a new 52w-high on Friday.
China Sun Group (CSGH): down 5.33% for the week, total return 3.23%
Nothing happened this month so far, this is a sit and wait value play which might start to take off at any given moment. Fundamentals, story and outlook are unchanged from my initial profile.
GC China Turbine (GCHT): down 11.56% for the week, total return -20.73%
This is a very speculative stock in the China Portfolio and for that reason I have only added a quarter position so far. GCHT is a start-up manufacturer of wind turbines. The company currently has the capability to produce an average of 30 wind turbines per month which allows it to fulfill its initial orders of 150 wind turbines, worth in excess of US$ 128 million within one year. The company has yet to post revenues and profits, will likely have to invest a lot of money into more production facilities and the development of the planned 3.0MW utility scale turbines, and there are many risks involved in this plan incl. dilution and government policy changes. I consider this to be a very promising story but associated risks demand to keep the portfolio position small for the time being.
Gulf Resources (GFRE): up 3.60% for the week, total return 17.06%
This Friday, Gulf Resources raised $25 million in a private placement. The new shares were sold at $8.50, a 16% discount to Thursday's closing price. While the stock initially traded down to $9 on the news it steadily climbed higher and ended the day in positive territory. I view this as a very positive sign for the performance of the stock in the coming weeks.
Lotus Pharmaceuticals (LTUS): down 4.55% for the week, total return 9.49%
After a failed break-out attempt in early December we are now still waiting for the real move higher. For that to happen LTUS has to break resistance at $1.12 and trade above that level for two days with volume. Fundamentally this stock is worth $5 so it doesn't matter if it sits in the 90 cents or slightly above $1, the real move has yet to come and it should be mind-blowing. I will double the China Portfolio position as soon as the break-out scenario unfolds.
New Energy Systems (NEWN): down 3.72% for the week, total return -1.43%
NEWN successfully completed the acquisition of fellow Li-ion battery manufacturer Anytone this week. 3.6 million new shares have been issues on an average stock price of $6.60 per share. While this acquisition at 5.0x 2010 projected net income for Anytone could be considered a steal, the stock currently sits at a level even lower than the $6.60 acquisition price. At current levels, I consider NEWN to be one of the lowest risk positions in the China Portfolio and a core holding for 2010.
Orient Paper (ORPN): up 0.54% for the week, total return -1.58%
In a filing with the SEC on Friday afternoon, Orient Paper indicated that the listing of their common stock on NYSE Amex is imminent. No PR has been released yet so there is a chance to accumulate the stock before this news breaks. I expect ORPN to trade above $10 with such a press release and to hold this level with the uplisted to Amex. I do already have a full position of ORPN in the China Portfolio which I can't raise by the rules set for this model portfolio.