Is it typical for funds to attend these meetings and then buy shortly after if they like what they see and hear? Curious if this is a common scenario in anyones' experience. Hope the conference brings out some nice buys mid September.
I agree that the balance sheet is bad right now, but after a few quarters of earnings, it will be fixed. Chgy has spent a good part of the last two years in their production expansion program.
Management has spent a lot of money to increase production and I think that it will pay off big time. 2010 is when chgy will really shine. I would get in ahead of the big earnings that are about to come.
Just read the latest 10-Q for CHGY. I think I will have to pass. I read nothing about a mine expansion, I read that they had to close it down for 6 months due to fire-safety and that it will re-open in the third quarter. I'd consider buying the stock if it came back down to the 50day moving average, but given the balance sheet (Sucks compared to many China companies), i'd rather invest elsewhere at current PPS.
The Heat-Power section of the company I think will suffer a bit of a margin squeeze. Coal prices are going up and their heat-prices to customers is mandated by the Chinese government. I also find it weird that they do not feed their own coal to their power company...Seems a waste, maybe their geographically distant?
With that said, if they can really produce 800k tons of coal from that mine, their earnings will likely do as you say. Of course, given their numerous loans and current liabilities...That cashflow will be going towards debt repayment... Unless they plan to 'forward roll' their credit facilities...Which would almost be a first in a China company.
Chgy just completed it's production expansion. Now it has the capacity to produce 800K tons per year. It can earn .70 cents next year and if you give it a modest 5 multiple, you get a $3.50 stock. I think this is the last chance you'll get to buy under a dollar.
I looked over CHGY a bit ago, I forget why but I crossed it off my list. I have a backlog of companies to check out tomorrow but will try to take another glance at CHGY to see if I was too hasty.
By the way, I have spent ALOT of time finding new china companies to invest in (I wanted more money in the sector and could not increase my LPIH/LLFH holdings more). Let me give you the list, you can use me as a starter 'company filter' =) Alot of gems here:
CCGY - (Probably one of my favorites)
CPQQ - Risen a bit too much for me this week, i'd be a buyer sub $1.
PUDZ - Similar to LLFH but I don't like it quite as much...
MYST - Somewhat on the fence with this one, alot going on here and have not done enough DD
SGZH - This one is another coal miner like LLFH. Not as much expansion announced, but has lots of cash and very profitable. Trading at an VERY low P/E of around 2.5
Let me add
all profitable in q2.
GFRE.ob is the best among them but is known now I think.
The other three are not the perfect stocks but are worth to be in a watch list.
If I remember correctly SCLX is related with Red Chip too.
I almost forgot. Much credit on that list goes to Glen Bradford and iHub "ChinaStockPicker". I got many of those names from their picks... I used them as a 'filter' and picked the ones I liked most from their choices. Its a good way to narrow down an overwhelming universe of companies.
The conference is only one event. From speaking with a specialist at Redchip, they will be doing an entire 'Road Show'. No idea what he ment by that, but it sounded like a multi-week affair in trying to gather investment capital for the RedChip companies.
Certainly should provide a positive catalyst for the companies...