Chinese companies have continually been
getting hammered as investors both retail and institutional head for the exits. This is creating
some buying opportunities but China Vesting cautions...unless a company has some
sort of "proof of existence" or legal accountability, then staying on the
sidelines is the best bet.
This is exactly why China Vesting upgraded China Direct (CDII) to our Dragon
Undervalued Index a few months back. CDII is in fact an American-based company
with a U.S. management team.
The company has been unfairly punished and
shares are down to 52 week lows.
At $0.89 per share the
entire company is worth just $31.43 million dollars. As of the most recent
quarter ending March 31, 2011 CDII had $9.4 million in cash and $12.8 million in
marketable securities. That means the market is currently valuing the
operations at $9.23 million. To remind readers...
China Direct expects revenue for the
full 2011 fiscal year of $180 to $200MM with net income of $12MM.
At some point it... and
the point is probably now... the company should just go private and conduct an
IPO on Nasdaq in a few years. What would it cost to build a business producing
the kind of numbers CDII will in 2011? Don't just take it from us...call China
Direct at its Florida headquarters and find out for yourself at 1-877-China-57.
Meanwhile China Direct continues to do impress on the operational front. The
company announced today that its magnesium segment operations received new
purchase contracts valued at approximately $19.2 million in the first two months
of the third quarter of fiscal 2011 that began on April 1, 2011. Deliveries of
these new orders are expected to take place throughout the remainder of fiscal
2011 and into the first quarter of fiscal 2012.
It is important to understand that
China Direct (CDII) is
an American company doing business in China and not just a Chinese company
listed on a U.S. exchange. China Vesting has actually visited CDII's
Florida headquarters and met with the company's entire senior management team.
We then visited CDII's Shanghai headquarters located right by the famous Jin
Jiang Hotel in Shanghai and spent considerable time with the company
Chairman/CEO and CDII's China team. It is impossible not to see some strange
things in China when you've visited hundreds of cities and companies. We can
tell you one thing, there is a peace of mind in knowing the people behind this Chinese company
live in the U.S., have their families in the U.S., and also are held to
U.S. standards across the board.
