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Fantasy Finance
XI'AN, China, May 24, 2012 /PRNewswire-Asia/ -- China Integrated Energy, Inc. (OTC Pink: CBEH) ("China Integrated Energy" or the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced the completion of the thorough Independent Investigation conducted by the Audit Committee into allegations raised in reports published in early 2011. Although the specific findings and conclusions of the Committee, as advised by its legal and forensic accounting professionals, remain privileged, the Company announced that the Committee has informed it that the Committee is satisfied that the vast majority of the short sellers' claims were baseless. Based on its investigation, however, the Committee has made observations, primarily regarding strengthening internal controls, which the Company will actively pursue.
Beginning in March 2011, short sellers calling themselves Sinclair Upton and Alfred Little published claims that China Integrated had made misrepresentations or other alleged wrongdoing regarding (1) cash in the bank, (2) related party transactions allegedly benefitting the Company's Chairman and his family, (3) the Company's overall financial health, as demonstrated by differences between Chinese filings with the SAIC and US filings with the SEC, (4) certain accounting practices, (5) the value and ownership of gas stations owned or leased by the Company, (6) the Company's affiliations with educational and research institutions, (7) the Company's auditors, (8) whether the Company enjoyed certain tax exemptions, (9) the Company's licenses , (10) the VIE structure, (11) the Company's wholesale distribution network, and (12) the Company's production of biodiesel.
In May 2011, the Audit Committee engaged Shearman & Sterling LLP to lead the independent investigation into these allegations. Each of these allegations was thoroughly investigated. While some issues remain as to production at the Company's Tongchuan biodiesel facility, and while the investigation revealed the need to strengthen internal controls and take similar measures, the primary substance of all other allegations has been proven groundless. Sales of biodiesel accounted for approximately 17% of the Company's revenue in FY2010. The Committee applauded the Company for its full cooperation given throughout the investigation.
Speaking on behalf of the Company, its Chairman, Xincheng Gao, stated: "We are heartened, but not surprised, to hear the Audit Committee's conclusions. From the day the short sellers issued their attacks, we have consistently and vehemently denied them. Unfortunately, in this climate, people like the short sellers can say anything and then it is up to the Company to prove its innocence. While we are happy that we have been able to do so, the effort has cost the Company, and therefore its shareholders, a great deal. We are of course struck by the fact that the short sellers accused us of making false statements to benefit ourselves financially, when, in fact, that is precisely what the short sellers did. We will continue to defend ourselves and also continue to work with the Audit Committee to resolve any remaining issues regarding biodiesel production. We also appreciate that this thorough evaluative process inevitably and productively leads to useful recommendations, which will make our Company stronger and even more responsive to the interests of its shareholders."
About China Integrated Energy, Inc.
China Integrated Energy, Inc. is a leading non-state-owned integrated energy company in China engaged in three business segments: the production and sale of biodiesel, the wholesale distribution of finished oil and heavy oil products, and the operation of nine retail gas stations. The Company operates biodiesel production capacity within two plants located in Tongchuan, Shaanxi province, and one plant in Chongqing, China. The Company utilizes a distribution network covering 16 provinces and municipalities, established over the past 11 years, to distribute both heavy oil and finished oil, including gasoline, petro-diesel, and biodiesel. For additional information on the Company, please visit http://www.chinaintegratedenergy.com.
An online investor kit including a company presentation, news releases, price quotes, stock charts, and other valuable information for investors is available at http://www.chinaintegratedenergy.com. To subscribe to future releases via e-mail alert, visit http://www.chinaintegratedenergy.com/alerts
Safe harbor statement
This news release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. China Integrated Energy, Inc., may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q, and 8-K in its annual report to shareholders, in news releases and other written materials and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under law.
For more information, please contact:
China Integrated Energy, Inc.
Roger Zheng
Investor Relations
Tel: +86-29-68592316
Email: zx@cbeh.net.cn
Web: www.chinaintegratedenergy.com
Christensen
Mr. Chen Yuanyuan (English and Chinese)
Mobile +86 139 2337 7882 in China
ychen@christensenir.com
Mr. Tom Myers (English)
Mobile +86 139 1141 3520 in Beijing
tmyers@christensenir.com
Hasnt been much of a need to! Theres talk on the yahoo board that the investigation is over and results are being sent to the audit committee then the SEC. Well see if it has any validity in the up coming weeks.
Really haven't looked into this one in a while.
Any Update on the investigation?
I'm here hoping to count some profits at some point.
ANNNNND here it comes... Beautiful chart. Too bad no one is here with me lol
If this can stay at this level for a few weeks longer or get pushed to the mid up .80s for a a few days this will run (Or of course positive news) I think it will bust out as the 20 and 100 day EMAs will cross.
Thanks for posting that.
http://www.loeb.com/districtcourtdismissesclassactionagainstsinoclean/
LOEB & LOEB SECURES ANOTHER VICTORY IN DEFENSE OF U.S.-LISTED CHINESE COMPANIES UNDER ATTACK FROM SHORT SELLERS
California District Court Dismisses Shareholder Class Action Against Sino Clean Energy
February 6, 2012
In the firm’s latest defense victory on behalf of a U.S.-listed Chinese company facing unsubstantiated fraud allegations from short seller attacks, Loeb & Loeb LLP successfully obtained a dismissal of a federal class action complaint against Sino Clean Energy, Inc., a Chinese producer and distributor of coal-based fuel. On January 30, 2011, the U.S. District Court for the Central District of California dismissed the action filed on behalf of the class of Sino Clean Energy shareholders, which alleged that the company misrepresented revenues and operations in filings with the Securities and Exchange Commission (SEC), with the intent to mislead U.S. investors.
The class action complaint against Sino Clean Energy was based on information contained in reports published by two short sellers claiming to have discovered “evidence” that “proved” that Sino Clean’s SEC filings were false. The “evidence” consisted primarily of multiple level hearsay from an anonymous source, an alleged video surveillance conducted by someone other than the short seller, and alleged discrepancies between the company’s SEC filings and filings by one of its subsidiaries with Chinese authorities.
The U.S. District Judge dismissed the action concluding that the plaintiffs’ reliance on these sources was insufficient to meet plaintiff’s burden to plead specific facts to allege fraud. Loeb & Loeb is also representing Sino Clean Energy in a pending defamation lawsuit against the publishers of the reports on which the class action is based, short seller blogger Alfred Little and GeoInvesting.
The Loeb & Loeb attorneys handling this matter for Sino Clean Energy were Eugene R. Licker, Laura Vasey, and W. Allan Edmiston.
Loeb & Loeb's represents CBEH too
Could this new policy have something to do with it?
alfredlittle.com/2011/12/19/al-announces-campaign-to-expose-and-defeat-threats-against-its-contributors/
surely it is.
good stuff: yahoo finance removed all links to SeekingAlpha's articles relative to CBEH.
Could this new policy have something to do with it?
http://alfredlittle.com/2011/12/19/al-announces-campaign-to-expose-and-defeat-threats-against-its-contributors/
http://alfredlittle.com/
no CBEH articles anymore...
this is really funny:
Re: Volume up. Price up. Why is there no info on CBEH on AlfredLittle.com when there was before??? 6-Jan-12 01:35 pm
Little went long on PUDA and CBEH. He said to me he also went long on hrbn before the deal.
It would be nice to hear anything from the company at this point.
Eventually this should breakout of the channel it is stuck in.
China Integrated Energy: Ripe for Significant Upside After Appointing New Auditor and Updating Guidance
3 comments | August 4, 2011 | about: CBEH
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China Integrated Energy (CBEH) last week announced the appointment of a new independent auditor, Sherb & Co., LLP, to replace KPMG. Sherb & Co will commence its audit work to re-audit the company's annual results for the year ended December 31, 2010 and will also begin the process to review the company's quarterly financial results for 2011.
With this latest step, the company is seemingly slowly getting back to business as usual after being severely impacted by, from management's point of view, an evidently somewhat unexpected turn of events earlier in the year, which although initially triggered by a number of articles published by a group of short-sellers, was subsequently handled far too carelessly by the board and for which management has certainly had to take their share of responsibility.
The initial independent investigation, in response to aforementioned publications, by the Audit Committee was cut short due to the resignation of the investigating law firm Pillsbury after payment was delayed to Pillsbury and Deloitte by management. This was due to disagreements with Pillsbury and Larry Goldman, CBEH's previous audit chairman, on both the manner in which the investigation was being conducted and the nature of the information requests by Pillsbury. The company's founder and current CEO, Mr. Gao Xincheng, was seemingly overestimating the level of commitment of its new auditor, especially in light of the whole Chinese RTO saga and possible liability concerns.
The subsequent chain of events whereby within a timeframe of a few weeks KPMG resigned due to "non-cooperation of management with the independent investigation", only 4 months after CBEH completed SOX 404 implementation based on KPMG's recommendations, and the resulting NASDAQ delisting due to "absence of auditor" was evidently unforeseen by management.
Although management was quick to act in hiring Steven Markscheid, former representative of US China Business Council, vice president of Chase Manhattan Bank and First Chicago Bank and director at GE Capital, as independent Director and Audit Committee Chair and renowned international law firm Shearman & Sterling LLP as special counsel to the Company's Audit Committee, it was too late to maintain NASDAQ listing and the share price was decimated to unseen levels. As Shearman & Sterling's independent investigation is advancing and with the appointment of Sherb & Co as new auditor, management is now finally able to provide updated guidance for FY 2011.
Jeff Chan, Chief Financial Officer of China Integrated Energy, said,
For financial year 2011, the Company's sales are currently expected to be $497 million and net income is expected to be $41 million. At the beginning of 2011, the Company provided guidance for sales of $588 million and net income of $72 million.
We have revised guidance downward for the financial year 2011 due to several factors. In the first half of 2011, our biodiesel production facilities in Tongchuan were not producing at planned capacity due to government restrictions on chemical and oil production during the International Horticultural Exposition (the "Expo") in Xi'an, which began in April 2011 and is currently still underway. We were successful, however in our efforts to maintain limited hours of production each day as the local government authorities acknowledged that our production of biodiesel is safer and less pollutive than traditional oil refining. Normal production schedules will resume after the end of the Expo in November 2011.
In addition, the newly acquired equipment for the Tongchuan Phase 2 plant is still undergoing testing. Production is scheduled to commence in the third quarter of 2011. Additionally, one of the production lines in the Chongqing plant was upgraded in the second quarter of 2011, which temporarily reduced our biodiesel production during that period.
As previously announced, four gas station leases were cancelled by Shaanxi Highway Services Co., Ltd. as part of the government's effort to reduce the number of gas stations leased to third party operators. As a result, we have received a refund of about $3.9 million (approximately equivalent to RMB26 million) for the advance lease payment that was made at the time we began operating those gas stations.
On July 8, 2011 and July 11, 2011, we received termination notices from Shaanxi Fangwei Road Gas Station and Lantian Gas Station for the gas stations leased by Xi'an Baorun at those locations. The termination of the operating lease for Lantian Gas Station is due to the expected demolition of this gas station in order to widen the road, a project undertaken by the local government...The Company expects to receive a refund for the advance lease payments made amounting to approximately $10.9 million (approximately equivalent to RMB71 million).
As a result of the termination of these leases, our retail gas station segment sales have been reduced.
To date, we have not received the corporate income tax waiver for financial year 2011 from the Xi'an local tax bureau for our Xi'an Baorun subsidiary and, hence, we expect that Xi'an Baorun will be subject to corporate income tax at the rate of 15% since it has been certified as a High & New Technology Enterprise.
Our expenses are also expected to increase due to the cost of the ongoing independent investigation.
The revised guidance reflects the Company's current estimates based on the conditions and trends known to the Company as of the date of this release. Results are subject to change based upon further review by management and future changes in market and operating conditions.
Given the updated guidance on revenue and net income, alongside clarification on the current status of the biodiesel production lines, often referred to in other articles, and clarification on the number of gas stations now managed by CBEH, from 13 to 9 and now 7 stations due to lease terminations (4 owned, 3 leased), it will be interesting to see how the share price will develop in the next 6-12 months.
Comparing the guidance for expected sales of $497 million to the previous year's $438.7 million (2010) and $289.6 million in 2009, the company seems to have maintained its growth momentum despite recent developments. Expected net income of $ 41 million (2010: $37.7 million, 2009: $27.1 million) on 42.2 million shares (diluted) comes down to expected EPS of approximately $0.97 for FY 2011.
Cash and cash equivalents at the end of last year stood at $ 90.3 million compared to $ 62.4 million at the end of 2009. The $90.3 million includes $14.3 million net proceeds from a registered direct offering completed in December 2010, when the share price was still hovering around the $7 range. When taking the current cash on hand, a little over $2 per share, as buffer alongside a very favorable asset/liability ratio (264 million / 34 million last reported) and a P/B of 0.3, the current share price seems attractive in itself.
Given the timing of the provided guidance, it seems unlikely that the independent investigation and re-audit will show either a balance sheet or income statements greatly differing from the guidance provided last week. Time will tell, but this particular stock seems ripe for some significant upside during the second half of this year as management returns focus on running a growing and profitable business and winning back the trust of the investor community.
Links to the discussed PRs, directly from the company website: here and here.
This investor presentation (.pdf) provides some useful information on China Integrated's business.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in CBEH over the next 72 hours.
This article is tagged with: Long & Short Ideas, Long Ideas, Basic Materials, Oil & Gas Refining & Marketing, China
Wow an 8K today....looks like they got lots to say....a clear indication of better days ahead.
But is the guidance worth anything? How can we trust management, especially when the revision was downward? If they had come out with good news I would actually be a little more impressed.
Even downward revenue guidance is welcome information along with new auditors. Makes me believe this company actually has potential to move forward and upward. Most of the delisted china tickers remain silent... this one is talking... veryyyyyyy positive sign for me.
In fairness, I could see how anyone who bought this on the big board would be reluctant to put any more into it since most have been slaughtered.
JMO
China Integrated Energy Updates Guidance for the Year 2011
Today : Wednesday 27 July 2011
China Integrated Energy, Inc. (OTC Pink: CBEH, "China Integrated Energy" or the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today updated its guidance for the year ending December 31, 2011.
Jeff Chan, Chief Financial Officer of China Integrated Energy, said, "For financial year 2011, the Company's sales are currently expected to be $497 million and net income is expected to be $41 million. At the beginning of 2011, the Company provided guidance for sales of $588 million and net income of $72 million.
Edited version of the news release today. See article for full text. EB
Big news from managment that sent the stock up and the news wasn't even good! They sent estimates down big time! The problem is, how can you even trust management at this point? I have a few shares that I'm holding on a prayer but I don't see the point of adding more.
Got me a starter at 1.15 will add on any dips
40% gainer and not a single post? Man I'm loving where this one goes when interest returns.
Now, would the real Frauds please step forward, or should I say, would the real Muddy Waters please step forward!
LOL (LMAO!!!!)
China Integrated Energy Appoints Sherb & Co., LLP as its Independent Auditor
Today : Monday 25 July 2011
China Integrated Energy, Inc. (OTC Pink: CBEH, "China Integrated Energy" or the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that it has appointed Sherb & Co., LLP as its independent auditor. Sherb will commence its audit work to re-audit the Company's annual results for the year ended December 31, 2010 and will also begin the process to review the Company's quarterly financial results for 2011.
About China Integrated Energy, Inc.
China Integrated Energy, Inc. is a leading non-state-owned integrated energy company in China engaged in three business segments: the production and sale of biodiesel, the wholesale distribution of finished oil and heavy oil products, and the operation of nine retail gas stations. The Company operates at 200,000-ton biodiesel production capacity within two plants located in Tongchuan, Shaanxi province, and one plant in Chongqing, China. The Company utilizes a distribution network covering 16 provinces and municipalities, established over the past 11 years, to distribute both heavy oil and finished oil, including gasoline, petro-diesel, and biodiesel. For additional information on the Company, please visit http://www.chinaintegratedenergy.com.
An online investor kit including a company presentation, news releases, and other valuable information for investors is available at http://www.chinaintegratedenergy.com. To subscribe to future releases via e-mail alert, visit http://www.chinaintegratedenergy.com/alerts.
Safe harbor statement
This news release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. China Integrated Energy, Inc., may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q, and 8-K in its annual report to shareholders, filings on the OTC Disclosure & News Service, in news releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under law.
For more information, please contact:
China Integrated Energy, Inc.
Roger Zheng
Investor Relations
Telephone: +86 29 8320 4383
Email: zx@cbeh.net.cn
Website: www.chinaintegratedenergy.com
Christensen
Jenny Wu
Telephone: +86 10 5826 4939
Email: jwu@christensenIR.com
SOURCE China Integrated Energy, Inc.
Definitely good news, and it appears it has been well received.
I have begun collecting a few myself. I'm a patient person if I think it will rise.
I read the article and found nothing in it that someone could argue with, but hey, there are all sorts on the hub.
Somebody in another stock forum ticked me off today, they could not connect the dots on the article I posted earlier (last 24 hours) about the recent SEC and China chats about audit problems, enforcement, Audit problems, shorts, and so on. And I posted the following below in reply to several that said they did not see anything about shorts in the article...... I thought many readers that are newer, trying to connect the dots, might find my comments interesting. But let me mention that the article claimed that some China/US RM CEOs were caught between the option of telling auditors and the SEC to kiss off, or to violate criminal secrecy laws in China by making certain requested documents public domain.
This is a real good write up today of what is really going on, and why the shorts were so successful with the timing of their attacks on China RM US stocks like CBEH, and so successful with the damage they caused. It is because they are between a rock and hard place. The problem is differences in US and China laws. READ all the way to the end!:
Thanks for finding that article.
I asked them this morning. Should be fixed soon (the ticker here).
Interesting little tidbit I just found on the SEC move to try and audit some China RM firms.
Have you asked admin to change the ticker to pk? Would like to see current chart info.
Nice 30% rally today, in spite of NASDAQ delisting! Shorts must have covered?
China Integrated Energy securities are quoted under the symbol CBEH.PK on OTC Pink of the OTC Markets Group Inc. also listed on yahoo finance.
yahoo msg board has alot of info.
Did it ever start trading? What is the current symbol?
No that's all I got.
Any other news on CBEH?
Yepper Mike.
News of new directors:
http://ih.advfn.com/p.php?pid=nmona&article=47939697
May,18 News Update,
http://pr-usa.net/index.php?option=com_content&task=view&id=733204&Itemid=32
This came out on Google this morning. Note registration and deadline for class action suit for those that are interested
Regards,
BeanStocker
there is no new accountant! I follow cbeh more than a year
seems cbeh is one big joke, a big scam... I just can say I am very shocked about this whole history and I have no more confiance in china stocks. Seems al those china small caps are robbering the west.
even my respect and confiance about the big four-accountants is about 0%! all one big joke. the SEC... pfff, I don't know what are they doing... maybe playing with games on their computer?
I can say I lost a lot of money and I am very frustrated cause I believed in this company (and many other chinese company's). I believed cause KPMG did the audit, cause many institutionals invest big money, cause many analist says this was a goldmine....
pfff... all one big joke
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China Integrated Energy, Inc. is a leading non-state-owned, integrated energy company in China engaged in three business segments: the wholesale distribution of finished oil and heavy oil products, the production and sale of biodiesel, and the operation of retail gas stations.
Oil Distribution - We are a high-volume distributor, selling primarily gasoline, diesel, and heavy oil in fourteen provinces and municipalities through seven sales offices located in various regions of China. read more
Biodiesel Production and Sales - We operate a 100,000-ton biodiesel production plant located in Tongchuan City, Shaanxi Province and a 50,000-ton plant in Chongqing City, China. We will increase our total production capacity to 200,000 tons by constructing a new 50,000-ton production facility, adjacent to our 100,000-ton plant in Tongchuan City. read more
Retail Gas Stations - We operate seven retail gas stations located in Xi’an City and other areas in Shaanxi Province with plans for expansion. read more
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Wholesale Distribution of Finished Oil and Heavy Oil Products
Oil Distribution
We wholesale a variety of oil products including gasoline, diesel, and heavy oil. Gasoline and diesel represent the majority of oil products consumed in China due to automobile and truck usage. Diesel is also used in agricultural farming machines and power generation. Heavy oil is for further refinery into finished oil products, and also broadly used as fuel for ship boilers, industrial furnaces and heating purposes. Wholesale distribution of finished oil and heavy oil products accounted for approximately 67.6% of our total sales in 2009, and approximately 66.3% of our total sales in 2008.
We purchased approximately 65.5% of our gasoline and diesel oil products from our top five suppliers in 2009. During 2009, we purchased approximately 30.8% of our gasoline and diesel oil products from Shaanxi Yanchang Group, the fourth largest oil company in China, with whom we have had a strong long-term relationship. While Shaanxi Yanchang Group supplies most of our gasoline and oil, we are actively seeking other sources as well.
Wholesale Oil Distribution Photo Gallery
Click the image below to view photos.
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Oil Storage
We use four oil storage depots, which in the aggregate have the capacity to store approximately 59,000 m3 of oil products. Two of the state-owned depots are located on railways that provide us convenient access for distributing our products. We also have access to a 2.65-kilometer railway track connecting the oil storage depots located within our biodiesel production facility to the main railway in Tongchuan City, Shaanxi Province.
Oil Sales and Marketing
We have developed a stable sales network for our products in fourteen provinces and municipalities. We now employ thirty-six full-time salespersons, and as our business grows, we intend to further expand our network and develop more sales channels. For our wholesale distribution of finished and heavy oil, we will distribute to two additional provinces in the next eighteen months, adding additional salespersons and establishing more regional sales offices. We plan to increase our sales volume through enhancing our distribution footprint, and further penetrating our existing customer base and business territories.
Our Customers
We currently sell our finished oil and heavy oil products to regional distributors in China that supply to retail service stations, and directly to end users through our retail gas stations. We have adopted different terms for payment based upon the financial strength of the customer. For example, we have entered into agreements with PetroChina, SINOPEC, and other state-owned enterprises whereby we deliver products to agreed-upon locations, and these customers agree to pay us after delivery. However, we require partial pre-payment and cash on delivery from our customers that operate distributorships, or own and operate private gas stations, typically 10% to 15% of the total purchase price. We have not experienced any uncollectible accounts receivable or bad debt write-offs during the past three years.
In 2008 and 2009, our top five customers purchased approximately $49.3 million and $113.2 million of our products, representing approximately 22.8% and 39.1% of our sales during that period, respectively. China Petroleum and Chemical Corporation Chuanyu Trading Co., Ltd., our largest customer, accounted for approximately 26.6% of our sales in 2009.
Production and Sales of Biodiesel
Biodiesel Production
In 2006, we built a 10,000 square meter biodiesel production facility with an annual design capacity of 100,000 tons in Tongchuan City, Shaanxi Province. Our achievable utilization rate, after taking into account national holidays and required periodic maintenance, is 90%. In October 2010, we acquired a 50,000-ton plant in Chongqing City, China. By the end of 2010, we will increase our total production capacity to 200,000 tons by constructing a new 50,000-ton production facility, adjacent to our 100,000-ton plant in Tongchuan City.
Biodiesel Facilities Photo Galleries
Click the images below to view photos of our biodiesel facilities.
Biodiesel Proprietary Production Technology
First Generation Technology
We have been awarded three patents relating to the use of multiple feedstock interchangeably in biodiesel production. Our biodiesel feedstock includes non-edible seed oil, waste cooking oil and vegetable oil residue, most of which have limited alternative uses. We have submitted eight additional patent applications, of which six have passed the preliminary examination and the other two have been accepted for review.
We maintain a flexible procurement model in which we adjust the relative quantities of each type of raw material we purchase, depending on their respective purchase prices, to minimize our raw material costs. In 2009, non-edible seed oil, vegetable oil residue and waste cooking oil accounted for approximately 40%, 43% and 17% of our raw material costs relating to our biodiesel production, respectively.
Our first-generation biodiesel meets the Chinese Biodiesel Standard B100. Our biodiesel can be blended with regular petro-diesel and used by existing diesel engines with no change in engine performance.
Second Generation Technology
The new 50,000-ton second-generation biodiesel production facility, adjacent to our 100,000-ton first-generation production facility, is estimated to reduce production costs by 20%. In addition to the feedstock used in the first-generation facility (i.e. non-edible seeds, waste cooking oil, vegetable oil residue), the new second-generation facility can utilize a diverse supply of raw materials, such as crop straw (wheat straw, corn straw, cotton straw, weed, etc.), agricultural waste (tree branches, tree leaves), as well as organic waste, providing us with better input cost controls while ensuring optimal capacity utilization.
Furthermore, the new technology is able to recycle unused feedstock and water used in the production process, meeting our environmental goals while delivering further cost reductions. China currently produces 1.3 billion tons in organic waste annually.
Our second-generation biodiesel meets Europe IV fuel standards and can be mixed with both diesel and first-generation biodiesel at any ratio.
Biodiesel Raw Material Supply
We have access to a range of biodiesel raw materials. Besides non-edible seed oil, we can also use waste cooking oil and vegetable oil residue for biodiesel production. We have signed raw material purchasing contracts with local associations, some of which are governmental entities. These associations organize local farmers to plant and harvest oil plants. The purchasing contracts obligate most of the associations to first offer to sell the feedstock to us.
Shaanxi Province is one of the largest cultivators of Chinese prickly ash, an oil plant, in China. Together, the local farmers in Shaanxi Province have planted approximately 240,000 acres of Chinese prickly ash, 857,000 acres of cornel, and 10,000 acres of Chinese pistache. Although we could satisfy all of our current feedstock demands solely with Chinese prickly ash, we continue to diversify our feedstock supply to lower input costs. The abundant supply of feedstock currently available in Shaanxi Province is sufficient for our current needs, and should be sufficient for our expanded demands for raw material once we expand our biodiesel production facility or acquire a new facility.
Biodiesel Sales and Marketing
We are the only non-state owned biodiesel producer with a nationwide distribution license. We continue to leverage our distribution infrastructure to sell our biodiesel to existing customers and to acquire new ones. The main advantages of biodiesel over petro-diesel are pricing, efficiency, safety (due to a higher flash point), and the fact that biodiesel is environmentally friendly. Our targeted markets are power plants, marine transportation companies, seaport operations, and other industrial customers which consume large volumes of diesel fuel.
Operation of Retail Gas Stations
We sell all grades of gasoline and diesel at our seven retail gas stations. Our customers include automobile, bus, and truck drivers.
Our advantages are:
Retail Gas Station Photo Gallery
Click the images below to view photos of our retail gas stations.
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Outstanding: 44.5M
(as of January 7, 2014)
Float: 11.9M
Institutions Holding Shares: 46
Percent Held By Institutions: 21.54%
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