China Growth Stocks

[Brennus]

CHGS customers are rocking in China

For pretty much every one of their business segments...refractories (Steel) business is especially busy right now.

China's crude steel production was up 3.3% sequentially and up 22% year over year. That's CHGS bread & butter business. And according to the Ministry of Industry and Information Technology, China steel production will be up 6% this year.

In the meantime, CHGS new product line, precision abrasives used primarily for cutting/polishing silicon wafers (think Solar power) is set to have an extended period of exceptional growth. Check out this Wharton School of Business article on renewable energy in China:

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2214

The solar industry is expected to grow 40% per year over the next four years.

The need for continued technological innovation means that investment in China's solar energy is expected to total US$55.9 billion over the next 15 years. In 2007, the National Reform and Planning Commission launched an initiative to further the development of Chinese solar power with a 10 billion RMB (approximately US$1.46 billion) funding commitment.

If CHGS achieves the guidance they provided in their last conference call, this is a stock that could earn 30 cents in just the 2nd half of 2009. Meaning they are currently trading at roughly 4x 2h09 earnings. Pretty tasty.