Earnings Previews, Part 1
posted by The Traveller on Saturday, March 27, 2010
American Lorain (ALN) reports on March 30 before the open. The stock is doing well so far this year (up 15%) after it beat Q3 estimates nicely. One analyst expects ALN to report Q4 revenues of $58.3 million and EPS of $0.20. This one has further upside with a good earnings report.
Biostar Pharmaceuticals (BSPM.OB) has already pre-announced FY09 numbers with $52-$54 million revenue and $16-$17 million operating income. Watch for confirmation when they report next week. BSPM has already provided guidance for FY10 with $69-$71 million revenue and $16.2-$17 million net income, mind the difference between 'operating' and 'net' here. The stock is expected to move up from the OTC/BB in the very near future, keep your eyes close on this for an announcement.
China Agritech (CAGC) reports on March 31 before the open. The stock is up a whopping 95.7% for the year and now sports a hefty market capitalization of almost half a billion dollars. Whatever they report it will hardly be sufficient to support the current stock price from the fundamental side, but an earnings beat combined with strong forward guidance might reignite the strong momentum CAGC enjoyed for most of its Nasdaq life.
China Green Material (CAGM.OB) is down 12% for the year so far but as the stock reached its all-time-high at the turn of the year it is still performing well. CAGM is currently priced at 10x trailing earnings and 3x sales and I believe for being able to test its highs again the company should report an uptrend in both earnings and net income, both year-over-year and sequentially. CAGM reported $1.11m net income on $4.19m revenues for the Third Quarter of 2009.
China Auto Logistics (CALI) reports on Monday, March 29 before the open. The stock has not participated in the China automotive stocks rally so far and is one of the few in the sector that are down for the year (15%), trading range-bound between $4.20 and $4.70 since late January. Look for revenues of at least $60 million and net income of $2 million for a possible break-out.
China Clean Energy (CCGY.OB) is up 29% for the year already but I see much room for further upside as the company guided back in January for Q1/2010 revenues of $7.3 million or 150% growth from 2009 numbers. Their new chemical plant started operating on a commercial basis in January and for the yet-to-be-reported Fourth Quarter it was still in trial production. We do not know if this trial phase generated significant revenues and I do not expect the company to report outstanding numbers for this period, but that doesn't matter as we should see a reiteration of Q1 guidance which positions the company as a growth play that is trading well below book value.
China Electric Motors (CELM) will be reporting their first quarter as a public company after the market closes on Tuesday, March 30. I would keep a close eye on that one as CELM's industry peers (HRBN) reported strong growth for Q4/2009 and CELM has yet to issue guidance for 2010 and basically introduce itself to the US investing world with their first public conference call. Everything about this company looks very promising to me and we could see big money taking a shot at CELM if those events go well.
China Growth Development (CGDI.OB) is due with their annual report by March 31. We won't see a conference call, probably not even a press release, the company's investor relations are non-existent and it's one of those hidden OTC stocks most people have never heard of. CGDI is profitable, reported $900k net income on $4.5 million revenue in their most recent quarter, and the stock is trading at less than half of its book value. If they report another profitable quarter on top of those numbers then the stock could take off from currently depressed levels. A highly speculative trading idea for a possible 100%+ gain.
China Energy Recovery (CGYV.OB) is another widely unknown China OTC play. But contrary to CGDI all the metrics here say 'avoid'! The stock is down 42% for the year and closed 2 cents off its lows on Friday. Watch for Fourth Quarter numbers more than FY09 ones. The company will likely report a small profit for the year but the trend has been down lately. Last quarter CGYV reported a loss of $0.12 million on revenues of slightly above $6 million.
China 3C Group (CHCG.OB) is trading well below book value and cash on hand, actually it looks like one of the cheapest stocks around based on those numbers alone. Though the stock is down 10% for the year and trading around 45 cents for the past two months. The company posted a big loss for the Third Quarter and Fourth Quarter numbers will likely not look better as CHCG expects their "business performance for the 2009 fourth quarter to be on par with that of the third quarter." The key here is to look for signs that the company can turnaround their business, if there is light on the horizon the stock would be a clear buy at current levels:
"While we expect the remainder of 2009 to be challenging, we remain focused on building a platform for long-term sustainable growth. We have a lot of work to do but believe we have the right plan and managerial team in place to execute on our mission. We look forward to updating you on our developments in the months ahead." (Source: Q3/09 press release)China Carbon Graphite (CHGI.OB) is in a strong uptrend lately, both for their business with a 50% sequential rise in earnings last quarter, as for their stock price which has appreciated almost 60% this year. Watch out for a confirmation of this trend with Q4 and year end numbers that are due next week. The stock benefited hugely from an internet plug this month but is down about $1 from its mid-month highs and that would be the target for the stock with a trend confirmation.
China Gengsheng Minerals (CHGS) plans to release fourth quarter results on Monday, March 29, after the close. The stock has gained 40% so far this year on several catalysts as the NYSE Amex listing and new contract announcements. Though CHGS is currently trading well below its March 5 high of $4.30. For the stock to resume its uptrend I would be looking for revenues of $15.5-$16 million and net income of about $1.8 million.