China Model Portfolio
posted by The Traveller on Sunday, January 02, 2011

The Trading China Model Portfolio closed the year with a gain of 37.79% since September 24, 2010. We are currently holding more than 26% liquidity, looking for good long-term entries this January. One name that looks very promising is Shengtai Pharmaceutical (SGTID), a leading producer of glucose and cornstarch, raw materials for the pharmaceutical and food & beverage industry. Shengtai promised massive growth for 2011 with net income expected to grow by more than 200% to $10 million. With fully diluted 10.5 million shares, incl. 4.4 million warrants (strike price: $2.60), the stock seems very attractive at current levels below $3. Keep Shengtai on your watch list.

China Redstone Group (CGPI) is currently trading at $4.26, up 21.71% for the year of 2010 and down 8.39% from the November 29 high at $4.65. The Trading China Tracker Score is 15 (Strong Buy).

We are closing our CGPI position for a gain of 39.67% or $1,983. While China Redstone's reported numbers and business outlook appear entirely positive, we have identified several open questions that need to be addressed. Results of our due diligence have been inconclusive so far and we have decided to lock in profits here.

Lotus Pharmaceuticals (LTUSD) is currently trading at $2.59, up 1.17% for the year of 2010 and down 13.09% from the November 10 high at $2.98. The Trading China Tracker Score is 15 (Strong Buy).

A two-for-one reverse split of Lotus Pharmaceuticals' common stock became effective on December 31st. The company announced the reverse split as "an important step toward our goal of a national securities exchange listing." The shares will be trading under the ticker symbol LTUSD for 20 business days. We have adjusted our Lotus position in the China Model Portfolio and changed the target price to $4.50. We are now expecting an uplisting to NYSE Amex in the first half of this year.

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At January 02, 2011 12:39 pm , Anonymous Anonymous said...

Happy new year!

Btw I notice that in SGTID presentation 2010 October (page 10) number of outstanding shares are 16,169,805 and warrants: 4,398,945.

- tuoki

At January 02, 2011 3:29 pm , Blogger The Traveller said...

That was before the 1:2 reverse split became effective. The stock is trading with a "D" since.

Happy new year!

At January 16, 2011 5:28 pm , Anonymous Daniel Victor said...

I read that Ye Hu,the chief financial officer,resigned. These things happen,but isn't that a bit off-putting ?

At January 19, 2011 8:47 am , Blogger The Traveller said...

Daniel, yes that is one of the reasons we haven't added SGTI to the model portfolio yet. We are currently working on a safety/risk profile for all Chinese reverse mergers and SGTI will only be added if it passes this test. More about this in ~ one week.

At January 21, 2011 4:46 am , Anonymous Anonymous said...

Hi Traveller,

I was reading about a Chinese company Minmetals that has a subsidiary Minerals & Metals Group. They are folding everything into a new umbrella company called China Minmetals Corporation Limited (CMCL) to accelerate the pace of its corporate restructuring.

The group will inject its ferrous metals, non-ferrous metals, logistics, real estate, and science-tech divisions into CMCL, which is regarded as Minmetals' first move in restructuring and as a preparation for listing.

I was wondering if you knew anything more about the listing they will be seeking.

Thank you.

At November 01, 2017 7:04 am , Blogger stevenjocb said...

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Entrepreneur, trader, programmer. Several businesses since 1990 (Software Distribution, Record Store, Communities, Publishing). Work must be enjoyable