This company is so low for one reason: investors are afraid that any Chinese Company trading in the US Markets is a potential landmine. Efuture won't be one of those. Management continues to perform well, and has not engaged in pumping the company with press releases arrogantly boasting about their achievements.
Market Cap is 17.9 million based on 4.1 million outstanding shares after insider purchase.
This isn't a company you buy because of the cash on hand, it's a growth company trading at very conservative value stock levels. The reason EFUT is as low as it is right now is because of a total lack of confidence in anything Small and Chinese.
Investors see Chinese stocks being suspended weekly, with investors losing unknown amounts of money due to stocks often being suspended before the market is aware of the fraud. Rightly, people are selling many Chinese Stocks due to the fear surrounding total loss of capital.
EFUTURE will survive this period of China Bashing because it is not a fraud. So when the veil of fear dissipates, EFUTURE will then find a fairer value.
It's hard to estimate what they will do this year, but Yanchun Yan's recent comments and current backlog suggest it will be a year of considerable revenue growth for EFUTURE. Cash Balance is being buffeted by advance payments right now, so it's hard to know what the actual cash balance will be until projects are completed and payments are settled. I imagine with Efuture's high margins (of between 40%-80% depending on the product mix between software, licensing, and services - not including hardware) and advance payments being less than 30%, that cash may actually increase as projects near completion despite partial upfront payments by customers.
Although this period will test longs, it may be a wise idea to buy more at these discounted prices. As long as their isn't outright fraud, it's a clear bargain at these levels. Efuture has been aware of confidence issues surrounding Chinese Stocks and have lessened their dependency on Press Releases upon signing small new contracts, and worked with top tier international auditors to re-release their 20-F in 2009 while strengthening their ability to comply with Sarbanes-Oxley requirements and retraining necessary accounting staff whereas needed. I don't see too many parallels between the companies often spending more time promoting their stock than anything else and EFuture who just keeps plugging away on product development and managing customer relations with little to no fanfare except the yoy organic growth numbers.
2011 will be the strongest year for EFUTURE barring some big surprise, so with EFUT trading at current levels, it's hard not to buy more.