Its been awhile since we saw the last profitable quarter. Bak put all it has into the power battery business at the Tianjin facilities. The place consumes lots of cash, especially if they got a wrong guy to run the business there for a few months in 2008. Its a lonely business where people question your wisdom of making such a bet on the power battery. Clients are not readily available, yet; equipment and investment are heavily involved with the dear cash, millions of; Shenzhen based battery for small devices faces harsh international environment, to name a few.
Things start to turn.
Both China and Obama seemingly agreed in their joint statement to push forward with the EVs, millions of EVs in the years ahead, yesterday in Beijing. The long waited state subsidies for the surviving battery businesses will be announced soon. No single battery firm can sustain such a brutal macro environment for long, not even for any US battery firm. Governments got to do something, as anticipated. Bak will be one of the pioneers and the recipiants of the pending government supporting policies.
At the micro end, Bak will probably see the light in the tunnel, as we approach the year end when auto makers eventually will make the deals of formally picking up the battery winners to their EVs. I do see Bak be one of the few winners this year.
Like Boards33 predicted, we only need one or two auto deals to lift the confidence and the PPS, not to mention the macro state level support. As I live in China, I tell you not to underestimate the government power, never. In this business, the government, not the market, is the king. Whenever you see government determined to do something, they will get it done, at a speed I never see in the west.
I think the future for this firm is bright because, in addition to automobile batteries, it also makes batteries for everything from phones to power tools. Does anyone know the product sales figures by category?
Rnd- in nominal terms you are correct with regard to the price from 2 years ago. I feel your frustration and pain, too!
What you neglect to mention, however, is that on 10/3/07, just 6 weeks earlier, CBAK traded @ $9.24 on the run up after the HP LOI PR. It took only 2 trading days for the stock to double from 4.55...
You also leave out the fact that two years ago CBAK did not have the Tianjin facility or the Hubei facility and they weren't in discussions with 9 auto makers.
This time around, when an announcement is made on a deal with an auto manufacturer the stock will move up very quickly as it did before- and you won't want to miss it. As I have said all along- when that happens I will sell some shares to cover my basis and then let the house money ride to wherever this will then go. GLTAL!