China Ruitai International (fka CRUI)

[sidedraft]

Revoked by SEC:

http://www.sec.gov/litigation/admin/2014/34-71323.pdf

[Renee]

CRUI SEC Suspension:

http://www.sec.gov/litigation/suspensions/2013/34-70552.pdf

Order:

http://www.sec.gov/litigation/suspensions/2013/34-70552-o.pdf

[Harleyman]

Sold out today and will be resigning as moderator....GLTYA!!!!

[Harleyman]

let's hope we r both right

[jmurfk]

Not too dumb if you've been sitting on this one, lol.

[Harleyman]

10-k out,

.26 versus .22

CHINA RUITAI INTERNATIONAL HOLDINGS CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


Years ended December 31,
2010 2009

Sales $ 43,183,319 $ 35,736,104
Cost of sales (see note below) 30,382,960 23,865,156
Gross margin 12,800,359 11,870,948

Operating expenses:
General and administrative expenses 1,380,869 2,611,721
Selling expenses 1,780,940 1,547,688
Total operating expense 3,161,809 4,159,409

Income from operations 9,638,550 7,711,539

Other income/(expense)
Interest income 985,386 2,370,482
Interest expense (2,347,235 ) (2,473,370 )
Commercial leasing income 1,334,515 -
Cost of commercial leasing (861,104 ) -
Other income/(expense) 255,775 (40,835 )
Other expense, net (632,663 ) (143,723 )

Income before income tax expense 9,005,887 7,567,816

Income tax expense 2,072,593 1,891,955

Net income before allocation to non-controlling interests 6,933,294 5,675,861

Less: Net income attributable to non-controlling interests 69,137 56,759
Net income attributable to China Ruitai 6,864,157 5,619,102

Other comprehensive income
Net Income before allocation to non-controlling interest 6,933,294 5,675,861
Foreign Currency Translation Adjustment 925,958 43,448

Comprehensive income $ 7,859,252 $ 5,719,309
Less: Comprehensive income attributable to non-controlling interests 78,417 57,193
Comprehensive income attributable to China Ruitai $ 7,780,835 $ 5,662,116

Earnings per share – Basic and diluted $ 0.26 $ 0.22
Weighted average number of common shares outstanding
- Basic and diluted 26,000,000 26,000,000

[Harleyman]

cut a dumbass redneck a break, lol!

[jmurfk]

Yep, nice one.

[Harleyman]

lol, boy don't we wish we had crystal balls!

[jmurfk]

Hmmmm

[Huggy Bear]

I went after some more of those .68 but didnt get any.

Some lucky SOB did though.


malc

[Harleyman]

same here malc. had .75 bid in forever, wouldn't fill, put it in today and it filled at .74, very happy to be in!

[Huggy Bear]

Glad I waited to get my shares at the entry price I wanted. Finally in today at .74

I will load some more tommorrow or friday if this bargain price stays up for the rest of the week.


malc

[Harleyman]

raised my bid yesterday, still nothing......arghhhhh, but I will get it...

[Koufax]

Loaded up today. There was some volume, and I grabbed my shares.

How are you guys doing?

[Harleyman]

Koufax,
I just checked my order which I placed on 10/25 and 9:41 am, still not filled, lol!!!!! I remain hopeful!

[Koufax]

So is anyone getting stock? With trading so thin, it is hard to do, eh?

[Huggy Bear]

Wow, looks like someone wanted in pretty bad today.

2500 @ .85 and three minutes later 1600 more @ one buck.

Not exactly breakout volume but sure looks like one person wanted to be locked and loaded now and obviously willing to even smack the one dollar ask. Will be interesting to see what happens from here...

[Harleyman]

Thanks Stone, I always appreciate your feedback.

[Huggy Bear]

Harleyman - That is an excellent new Ibox. Now all we need are some more eyes upon it but I think they will be coming...

[Koufax]

They are apparently using wood now as 10% of their input. They are hoping to step it up to 50%. What that does to their product I don't know.

Apparently even with cotton they use the dregs, the short fibers that are not useful for making clothes.

[Huggy Bear]

I think you have pretty much summed up the opinion of the three of us on this board, lol.

I plan on getting in, but carefully so as not to drive the price up. I don't think there is any hurry.

But then again the interest is really starting to grow here, and yesterday saw someone buy 100 shares at a dollar each... I think that was the only trade of the day... Of course you never know when more eyes will find their way here and I'm for sure not saying anything on CGS or anywhere else, not that my opinion matters much, just saying... Until we are all loaded up, eh?

I find it interesting that they mentioned that while they think the price of cotton has stabilized, they are pursuing other raw materials, in specific wood waste materials right? Well, thats def. way cheaper than cotton and cellouse is being extracted from it thats for sure, the processes are already developed and being refined - Hell, half the biodiesel industry has already been all over it. The question is whether or not the technology has progressed enough to make it cost effective to extract raw materials from waste, as opposed to commodity, sources.

Now I'm not a technical guy and I could be totally wrong but seems to me that if the cotton part of the equation can be replaced with some form of essentially free raw material then once that process becomes fine tuned it should ultimately increase the margins, to what extent is only determined by the price of cotton compared to using an alternative raw material.

The biodiesel industry in whole has really gotten beaten up over this particular issue. And with the fallen price of petroleum, combined with the rising costs of their raw material, corn, well, it hasnt boded well for the bottom line. The most funded US company using wood waste materials to produce their biodeisel, Verenium, still is not profitable from what I've seen. Point being, I'm not sure how viable the this kinda alternative is yet.

Going to dig more this weekend on this and other issues. But tonite its out later to play some blues and have a date nite with the wife sans kids. Ahh, friday...

malc.

[Koufax]

I plan on getting in, but carefully so as not to drive the price up. I don't think there is any hurry.

I am optimistic about the future of this company, but not so optimistic that I would bet the ranch on it. I think that the business will be quite succesful. The real question is whether the US investor will see any benefit from it.

Please note as well that Global Hunter has a report out that includes the following:

"The company does not have a near term catalyst or expansion plans. The 500MT EC line was the first capex plan since 2007. Along with illiquidity, we expect the company to raise additional capital for further growth."

One interesting piece of information came out of the meeting. I asked about all the bank loans on the balance sheet (which are essentially offset by restricted cash). Here is the answer:

Beijing tells banks to make loans. Banks tell CRUI to take more loans, secured by cash. CRUI goes along with this to cultivate relationships. Banks get to book loans, as per instructions, without risking loss.

I tell this tale because I believe that the good will that CRUI has built up with the banks will in fact make real loans available to it to fund expansion etc. So, unlike many China small caps, bank financing may in fact be available, at least to an extent.

[Huggy Bear]

Thanks Koufax for the update on the company. I have been considering getting in here for quite some time now, but it sure trades thin and doesnt seem to have much positive attention or driving force for quite some time now.

Still, a very attractive P/E at this level. I just have a few questions for you, and thats whether or not you are in at this point in time, and if the intangibles you mentioned are hampering a positive outlook for the future. Thanks.

malc.

[Koufax]

My Meeting with Chairman Ma

Actually the meeting was with several people, including the Chairman, the CFO, VP of Finance, IR person, and a [very pretty] assistant to the Chairman.

Before the meeting I read the SEC files and discovered that there is a lot of hair on this one. For example, the Company 'lent' tens of millions of dollars to a company controlled by the Chairman and the President, and was repaid not in cash, but in the form of a budget hotel with 49 apartments, which was valued at about $5MM more than the loan amount, so the company continues to shovel cash to Chairman Ma and the President. There are other examples, but this gives you the flavor.

I asked about each related-party transaction. What I was told is that the hotel is being sold, that other transactions are being unwound, and that the company is trying to clean up its act in order to behave like a US public company.

I asked if the company pursues patent protection for its R&D discoveries. The answer was no, it relies on trade secrets.

I aked about the rising price of cotton. I was told (a) that they think the price is no going to rise further, and (b) they are well along towards finding other sources of cellulose (e.g., wood chips) that will do just fine, thank you, and spare them having to buy as much cotton.

In sum, they have a very nice business. Do they plan to adhere to public company standards? It is not clear. Do they plan to raise more capital? That is less clear, but otherwise, why would they be spending their time in the US raising their profile?

I hope this helps.

[Koufax]

My meeting is Wednesday. I board a train for NYC at about noon. Get me any thoughts before then.

Cheers.

[Harleyman]

Welcome Koufax, that is awesome, I will give it some thought and send you my questions, thanks for offering!!!!!

[Koufax]

Well this company looks to be solid but is subject to a rapidly-rising cotton price. I wonder whether this may cause its products to become so expensive that customers switch out to substitute products. Using cotton ether as a paint-thickener, for example, might not be economic and there are probably other thickeners available.

FYI - I expect to meet the president of the company next week. Are there questions that you would like to have answered?

Disclosure: I hold no position in this company right now

[Harleyman]

Welcome all, was surprised to find this stock didn't have a board, let's talk!!!