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China Carbon Graphite Group, Inc. Message Board

  • helpme_hanna helpme_hanna Feb 1, 2013 1:50 PM Flag

    The long and the short of it

    Long term this could be a very good stock. The company is confident that its decision to move into the high purity niche market, notably into the ultra-high-electrode market, will pay off handsomely. The company contends that the demand is strong and growing and that CHGI is the prime contractor. Recent weakness in the market has ended and orders will be building, they say.

    Secondly, the company is certain that it will start getting orders for nuclear graphite, that the orders will build over the years, and that the market will remain rock solid way into the future.

    If the company is correct, it will do at least $1.50 per share in three or four years, and maybe less. That should be about $15 per share market price, or a twenty five bagger eventually.

    Near term the situation is less positive. Q4 of 2012, which should be announced March 31, was not good. The CEO has already said that. Furthermore, Q1 of 2013 will probably not be good either. It takes six months or more from receipt of orders to receipt of sales revenue. From what it looks like, orders were not robust, to say the least, by the end of 2012.

    So helpme_hanna

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    • On the last CC the CEO commented that Q4 will be bad, but that Q1 on should see improvements.

      My feeling was that he had already seen the orders coming in to bump up Q1, so I would not assume that they would not be relatively good.

    • Hello Hanna, I believe what you say will come true eventually. This company and the situation they are in is very similar to another company i once held and waited for conditions to be just right for a nice run..The company I was invest in was call Zoltek (ZOLT)...I was invested heavily and Zoltek didn't run up until energy prices spiked up and everyone was looking for cheaper alternatives. Zoltek produces carbon fiber for the windmill blades and they did very well. Thank you for keeping my hopes up here as i am also heavily invested in CHGI

      • 1 Reply to ctal23700
      • cta,

        There are only 24 million shares outstanding, and the company is highly resistant to dilution until the stock is much higher. That makes the current market cap only $14 million. It wouldn't take all that much to make this skyrocket.

        At full capacity and $5000 per ton revenues (not a lot with nuclear, which runs above $40,000 per ton), the annual revenue would be $120 million. At 1 1/2 times revenue (very conservative for a profitable and growing company), we would have a market cap of $180 million, or $7.5 per share.

        I can easily see CHGI doubling its capacity as the high purity and nuclear gets traction. They have the land for that and would be able to finance a lot of that without much dilution.

        All we need are orders!

        So helpme_hanna