China Growth Stocks

[BiotechValues]

abh3vt

I don't think it's accurate to take CCGY's q2 results and annualize them to get a forward PE of 16 (which is still less than GU's by far). This is a company with a 100% capacity expansion coming online in a few weeks that dramatically alters it's revenue and earnings capabilities.


You also ask: "look at the problems that GU (Gushan) has been having...How will CCGY be able to avoid some of the macro issues that GU is describing?"

The answer is- CCGY is already doing that by making a move into specialty chemicals. In fact the majority of their revenues for the next 6 months are likely to be in specialty chemicals (some of it for export to the West) per the conf. call. Two of their larger and more recent customers from last q are NYSE listed companies. GU is far more locked into biodiesel and doesn't have that flexibility at this time.

CCGY saw the writing on the wall a year ago. See article:
China Clean Energy Shifts Away From Biodiesel.

http://www.reuters.com/article/companyNews/idUKPEK17720220080507?symbol=CCGY.OB&pageNumber=1&virtualBrandChannel=0


On a trailing basis, CCGY's PE is high I agree. But looking forward it's damn cheap if they only make half what they predicted from this new plant last year.