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20 September Terra Nostra Resources Corp. (TNRO.OB) Plans Aggressive Growth in Vertical Stainless Steel and Copper ManufacturingWhen investing in China, one only needs to understand a few key elements to succeed. The primary element is business fundamentals; the next is the use of political party power. Put the two together and an investor will soon understand that the entire concept of the Chinese transformation to a semi-capitalistic system rests in the retention of power. Those that had it in the past do not want to lose it and are/have positioned themselves to retain it. To this end, an investor in China should look at a company’s fundamentals first and then move on to who is in charge - or who knows whom in the overall Chinese political/business model planning structure. If both fall into line, profit and stability will reign.
Terra Nostra Resources Corp., a copper and stainless steel manufacturer, works to vertically produce stainless steel, copper billet and down stream products. The company operates the second largest stainless steel manufacturer and one of the top 10 copper manufacturers in China. In the second quarter 2008, the company controls 51% or more interest in its two subsidiaries’. Near term future plans include increasing ownership to near 80%. The company’s stainless steal plant, Quanxin Stainless Steel, consists of three arc furnaces capable of producing 230,000 metric tons (MT) of stainless steel. All products meet series 200,300, and 400 specifications. The company’s copper subsidiary, Jinpeng Copper, produces copper billets and value added copper rods, wire and low oxygen rods. Jinpeng Copper uses a combination of scrap and raw material copper to meet its 170 MT of electrolytic copper capacity. Although it is unlikely that the company would turn down export sales opportunities, it is primarily engaged in the domestic market. In this regard, it sees significant copper opportunities as urbanization continues to advance at a rate close to unmanageable. To this end, the company is aggressively working to serve down stream value added product opportunities directed at infrastructure and building markets. Currently, the company’s product mix is more oriented toward producing billet products but is quickly expanding as the company advances its aggressive and forward thinking business plan. Although copper production may seem to be more suited in this use, the company’s 150 MT hot roll narrow strip stainless steel line is working at a solid pace to fill factory orders throughout China. Some capacity, however, has been reassigned to serve the custom stainless steel marketplace. Many investors are relatively circumspect about making investments in Chinese companies, owing to a particular lack of understanding about how the country plans to integrate a capitalistic system into a domestic economy based on an entirely different system. These investors would be somewhat correct in their wariness. Where Terra Nostra in concerned, however, there should be little if any concern. This is because the chairman of the board – Mr. Sun Liu James Po - is a person that has very high ranking authority within the economic/political integration decision making structure of the government. In a general sense, the company has a leader in a very high position of authority and is predisposed to be able to move the company forward in a very positive and profitable way. 25 April Universal Travel Group Inc. (UTVG.OB) Completes Major Acquisitions and Readies for 2008 Beijing Olympic Business
Serving the travel needs of a mobile world is no small task. Add in all the little subtleties’ of traveling from one culture to another and a recipe for disaster is in the mix. Having a system in place that accounts for all the little things is the key. If a company can account for all the little things profit will flow easily and steadily. Miss a reference to stewed dog and you business will suffer. Universal Travel Group Inc., a full service travel operator working primarily with package tours to the Peoples Republic of China, is a Los Angeles base concern with many beneficial and required ties to China. Operating in China holds certain challenges for any business operation. Operating a travel business operation in China requires an even deeper understanding of how the Chinese system operates across many different regions and cultures. Universal Travel Group has this deep appreciation and puts it to good use where foreign travelers are concerned. The company’s main objective is to become the leading travel services company going to China. To move toward this goal, the company completed several acquisitions in 2007; Speedy Dragon-air freight, Xi’an Golden Net – travel packages, Shanghai LanBao – hotel reservations and Foshan Overseas International which could generally be characterized as the in-country travel service offering regional, conference and allied travel service needs. Although the company appears to have come together fairly quickly through acquisition, it has kept pace with revenue growth and net income able to withstand corporate challenges, unusual winter weather and the coming onslaught of the summer Olympics. Revenues for 2007 were up significantly owing to the multiple acquisitions made by the company. Understanding growth for the year ending December 31, 2007 is a complicated affair, but the company does indicate that revenues came in at $44 million or a 343% increase over the preceding year. Guidance for 2008 appears to indicate a strong year for the company having weathered large snowfalls that shut down much of the company’s routes and preparation plans for the summer Olympics. Accounting may be a bit difficult until the third quarter but; from an organizational structure, political connections, regional systems and cultural knowledge point of view the company does appear to be on track toward becoming - the travel service - for all of China and not just the East Coast. 24 April China 3C Group Inc. (CHCG:BB) Meets Company’s Forecasts with 103% Net-Income Growth and No Debt on it’s Balance Sheet
Being able to step-up when the opportunity presents itself is a sign of a company’s solid positioning and ability to ramp from an average position to an outstanding position. In many respects, timing plays a large part in being ready to step-up but so does understanding how the local/regional game is played. Putting the two together, when the chance presents itself, means a company is likely to be going large fairly soon. China 3C Group Inc., a leading wholesale distributor and retailer in Eastern China, offers a range of products to its over 900 retail stores. In the very near future it will also begin to offer small electronic products in Wal-Mart China Stores. The company works primarily with electronic products as its main base but offers a full range of products to suit every need. It is noted for its far reaching distribution network within eastern China and its ability to respond quickly to changing trends and reported issues within the network. In many respects, the company’s partnering with Wal-Mart is a perfect fit. The companies have a similar product base and appear to operate with the same business principles. The first steps of this particular alliance are limited to small electronic items such as small home appliances, computers and computer peripherals. How long the companies intend to keep the relationship at this level is anybodies guess, although given that China 3C Group has a wide selection of wholesale items to offer the two companies are likely to find more common ground quickly. The company is fairly well established within the eastern portions of China. These regions, or provinces, are the principle centers of population within China and the regions where a new middle-class of Chinese is forming. From an economic standpoint, the formation of this middle-class is happening at a very quick pace. It is quickly adapting too many established trends found in the western consumer. With this in mind, it is not all that far a leap to suggest that Wall-Marts entry into the market and China 3C Groups association with a model that has been successful in the west will be successful with this Chinese middle-class. If recent economic history is an indicator, China 3C Group is positioned to be a big winner as China permits access to a “new” western retail experience. 01 March China TechFaith (CNTF.O) Continues to Report Quarter over Quarter Growth
Where developing countries are concerned, it just makes economic sense to develop telecommunications systems that can actually reach people where they work and live. Often this means remote farming regions or in the steps of mountain ranges. Ad a population base, in developing countries, of 100’s of millions and cellular companies would need to work to not make money. China TechFaith Inc., A mobile phone handset designer, has been experiencing high growth over the last two quarters. Generally, this growth can be attributed to the company’s Smartphone and feature phone products which are essentially two phones in one. These products, which have found 60% of sales in China and 40% of sales internationally, are very well received and should continue to be one of the more popular models available. Although technological advance and design trends are always in flux, most find these phones more advantageous because they offer both Global Access and Code Division capabilities, making them more versatile in larger geographic regions. Although the company expects its primary products to experience a flattening is sales in the second quarter, it is optimistic about future revenue figures. Currently, the company is in talks with Google about its future phone service plans and how it may be a part of it. Given Googles’ capital strength, any affiliation will likely bode well for the company. Judging from recent company statements, indicating that they are expecting a more even balance between Chinese sales and international sales, there is a confidence about its overall position within the handset marketplace. Chinese potential in this area is exceedingly large, given telecommunications infrastructure within the country as a whole, and its need to improve wherever possible. This is even more apparent in outline districts away from its East coast where installation of landlines may be academic. Where cellular in China and, to a certain extent, other developing countries is concerned this company is becoming well positioned for rapid growth. China American Holdings Inc. (CAAH:BB) Accessing Chinas' Markets
China American Holding Inc., An American/Chinese holding company, is an access point to the tiger that is the Chinese economic/manufacturing machine. Trough the company’s subsidiaries, China American Holdings manufacturers and distributes products internally; to/in China while distributing around the world. If you are interested in investing in a company that distributes toys to the United States, or manufactures products that go into many of the end-products exported from China, this is one of the companies to consider. Other then the full spectrum of toys that China has become known for; chemicals for non-refillable tubes and air conditioning units and intellectual property rights are the main product base of the company. The company, however, has not limited its subsidiary choices to the more basic products that China is known for. Currently, the company is also offering security products that identify people for admittance to restricted areas. Chief among these products is a devise that reads retina, palms and fingerprints for identification and admittance. As this portion of the security market increases China American Holdings will benefit to a large degree. There is little doubt that the company will become a cash cow in the near term. However, the company is currently exposed to the fact that it is dependent on export issues and internal Chinese economic conditions. The dollar will not remain low forever and the Chinese financial system cannot remain in its current form for to much longer (mid-range time frame.) How China American Holding’s responds to these two challenges will dictate how large it will grow and how quickly. But it is fairly likely to grow given its current golden position in a global marketplace. China Jianggsu Golden Horse Inc (CJGH.PK).,Growing Nicely Under the RadarWhen customers and consumers use their purchases they rarely think about all the individual parts of the product that make up the whole. Those individual parts, however, make up a significant market if they are the right parts. If you look a little closer at a product, you may find that investing in the little things can often lead to larger profits. China Jiangsu Golden Horse Inc., a ball baring manufacturer, works to provide a variety of ball bearings to domestic and international markets. The company indicates that it has had a successful 2007 and has used its current position as a top 5 ball baring manufacturer domestically to expand plant and equipment. Expenditures appear to be in line with a consistent and predictable expansion strategy within domestic and international markets. World demand for ball bearings has been a solid catalyst for the company. It manufactures a variety of ball bearings from ceramic to steel. Although income generation could not be characterized as overwhelming, it is solid and predictable as the company ads longer term contracts and increases production levels to meet current and future demand world-wide. Expenses have been in line with expansion plans with the only real exposure to income being the costs of raw materials. Generally, all indications are that the company is proceeding on a very well calculated and executed strategy designed to keep the company well positioned for long term growth within a fairly consistent and reliable global market. Considering the global market for ball bearings, and Chinas’ position within the export market, the company should face little exposure to swings in international markets. The company exports to the USA, Brazil, India and Germany while keeping pace within China. The future also looks bright for the company as new contracts have been signed and a continuing expansion of new products are offered. All appearances point toward a solid future of stable growth for Golden Horse. Jade Art Group Inc. (JADG: BB) Signs Vertical Agreements for a Superior Grade of Jade
Some may say that steel has built our modern world. Take a closer look and one might find that marble is a better material to stake that claim. The value that marble has carried for thousands of years is undeniable. It is not, however, the only valuable stone found in history and also not the only one where a profit can be made. Jade Art group Inc., A development stage Chinese jade concern, is quickly working to vertically integrate a unique jade deposit found within the Peoples Republic of China. Current raw material contracts have been signed on both ends of the vertical spectrum. The first involves a 50 year contract with the mine for distribution rights to 90% of the deposit. The second involves several contracts, totaling $US11 million, for the resultant jade in various grades to artisans and commercial vendors. From a general perspective, the company plans to offer its jade through its subsidiaries to jade and wood carved products dealers within China and internationally. In-of-themselves, the jade contracts signed might not appear to be impressive. However, if a closer look is taken, one would find that they are actually very impressive. This particular jade deposit is thought to be one of the oldest jade formations in China. Its particular characteristics are such that; the size of the jade pieces, physical composition and general appearance make it very attractive to artisans and commercial users the world over. The company’s current plan is to work the entire vertical spectrum of the jade market. Around the world, and particularly in China, jade is a prized material for carving and physical structures. Within China, finding a vender for a particular grade of jade can be a very profitable venture not unlike the marble quarries of Italy. With a fifty year contract in place, the company looks to be positioning itself for a good solid long term run at providing a superior material to a very stable and wealthy marketplace, beginning to end.
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