CHCG (.78) - going to be a homerun stock IMO ......
In listening to last quarter's earnings CC, I listened as a non-shareholder and decided to remain a non-shareholder after realizing the company's restructuring efforts would put immediate downward pressure on the stock, even though the company was profitable, which indeed was what happened. Now keep in mind that stocks like this have unsurprisingly received no boost in valuation like most of our growing China small-caps have. These kinds of stocks will be the next China small-cap darlings.
CHCG reported EPS of .02 last quarter versus .14 for the same quarter a year earlier and as expected, the stock was punished as it should have been.
In the meantime, unprofitable stores have been closed and new stores have been opened. The company has somewhere in the neighborhood of 1,000 stores.
The company has $25 million in cash and no debt.
CHCG's $17.6 million cash acquisition of Jinhua Baofa Logistics was completed 6 days after the end of last quarter and will add about .01 in EPS per quarter and assuming no growth.
Bottom line is that I want to own shares before word of improvement hits the street and earnings return to where they once were. China's booming economy, recent acquisition and CHCG's cost-cutting measures should allow investors to score big.
