Value Microcaps Pick Six Lotto 13

[2morrowsGains]

My Pick6 and why I picked them...

CSGH - China Sun Group High-Tech Co. ($1.15)

One of the best LT stocks trading on any exchange today IMO. Absolutely ENORMOUS growth potential...
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WKBT - Weikang Bio-Technology Group Co., Inc. ($1.65)

If you like China stocks, this is definitely one for the watch list.
Took a closer look at the company after Knowledge is King posted their earnings report on the Motherboard last week. One of the most interesting things I found was that the CEO owns 98% of the total shares outstanding! See latest 10k, page 50...
http://sec.gov/Archives/edgar/data/1365354/000144624709000019/form10k.htm
That leaves only approx $500k shares in the float.
Almost no A/R.
Only $13k in A/P.
Paying taxes.
Q2 over Q1 cash increased from approx $1M to approx $5M.
FY2009 Q1 fd EPS = $0.15.
FY2009 Q2 fd EPS = $0.13.
NOTE: Q2 showed an R&D charge of $1.9M. I believe it is a one time charge for newly developed products with $336k owed. (See 10Q, page 9)...http://sec.gov/Archives/edgar/data/1365354/000126493109000248/form10-q.htm
W/o that charge, Q2 EPS would have equaled approx $0.18 after tax adj.

Outstanding Equity Awards at Fiscal Year-End...
"There are no unexercised options, unvested stock awards or equity incentive plan awards for any of the above-named executive officers outstanding as of December 31, 2008."

Compensation of Directors...
"We did not pay any compensation to our directors for any services provided as a director during the year ended December 31, 2008. There are no other formal or informal understandings or arrangements relating to compensation."

A private placement w/ ARC China, Inc (which is no fly-by-night company) was recently announced.
Approx 4.77M shares @ $1.75 per share for an aggregate purchase price of $8,345,535.
And approx 2.4M warrants at a price of $2.75 per share.
http://sec.gov/Archives/edgar/data/1365354/000114420409044137/v158330_8k.htm

Here's the clincher...If you were to add all the shares from the recent PP (including warrants) to WKBT's total share count, they would still have had an EPS of OVER $0.10 (including R&D expense) last quarter giving them a forward PE of 4.2. And that's w/ total dilution including warrants!! And cash from the PP (including warrants) would bring their total cash on hand to almost $20M.

If I'm figuring things right, WKBT looks to be a nice undervalued China stock with MORE growth in the pipeline...
"Our business will continue to accelerate as we enter the second half of 2009."
http://finance.yahoo.com/news/Weikang-BioTechnology-Group-prnews-1512926427.html?x=0&.v=2

BTW, Not sure what type of restrictions are on the PP shares, but I was thinking those shares may help increase liquidity since the CEO doesn't seem to want to let go of his his 98%.
(Wonder if this was one of the reasons for a PP? Use the cash for an acquisition while increasing liquidity? You never know...)

CHME - China Medicine Corp ($1.64)

First half EPS = $0.17 w/o warrant adj. PE based on the first half = approx 4.8 and that does not include the fact that their two strongest quarters lie ahead.
No debt.
No dilution.
Book Value = $2.76

CBPO - China Biologic ($5.64)

One of my picks from PSL 11. abh3vt turned me on to this company a while back. Very hard to ignore their last earnings PR...
http://finance.yahoo.com/news/China-Biologic-Products-prnews-3367707602.html?x=0&.v=49

BSPM - Biostar Pharmaceuticals, Inc. ($2.03)

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SGZH - Songzai International Holding Group, Inc ($7.45)

Had this as one of my picks in the last contest. Going to try it again. Started prepping for an uplisting in March. They earned $0.75 per share in Q1 and $0.81 in Q2. Forward PE based on the first 6 months = approx 2.4.
The only downside I see is that their PR machine seems to be broken.

And that's my opinion on my pick6 and why I picked them!