Value Microcaps Motherboard

[stock_peeker]

CSGH: Great, recommended by NIA yesterday

http://www.inflation.us/csgh.html

China Sun Group High-Tech Co. (CSGH)

NIA believes one of the best ways to diversify out of the U.S. dollar is with China stocks, and one of the upcoming trends we must pay attention to as a hedge against inflation is the lithium market. Many lithium companies have started to substantially appreciate to the upside during the recent months and we feel that investors that are ahead of the lithium curve now could capitalize significantly during the upcoming economic crisis and restructuring of the world.

Companies like Apple, Hewlett-Packard, and Nokia started using rechargeable lithium ion batteries a decade ago, and today there are millions of iPods, computers and mobile phones that are using advanced lithium ion battery technology.

Lithium is now taking the automobile battery market by storm and will be at the forefront of a new trend for Wall Street as well as Main Street. No other metal is better at holding a charge and dissipating heat with as little weight, making lithium the best ingredient known to make batteries for electric cars. Such batteries use a derivative called lithium carbonate to hold the electricity they get when plugged into an outlet to be charged.

The automobile industry already plans to introduce dozens of electric models with lithium batteries within the next three years. Furthermore, carmakers are betting that electric vehicles built to run on lithium batteries will help the industry recover from its worst crisis in three decades. President Obama’s administration is already providing $11 billion in loans and grants to car and battery makers to reduce the country’s dependence on foreign oil.

In our opinion, the companies that are positioned to capitalize on this new market trend will prosper during the upcoming crisis. One company in particular has caught our eye in this industry and we think everyone should take the time to do some due diligence on it while it is still at the current levels because we feel there is huge upside potential going into 2010.

The company is China Sun Group High-Tech Co. trading in the U.S. under ticker symbol CSGH.

CSGH produces anode materials used in lithium ion batteries. CSGH primarily produces cobaltosic oxide and lithium cobalt oxide.

CSGH is in the perfect industry at the perfect time and is also located in the perfect country - China, the fastest and largest growing nation in the world! According to the China Battery Industry Association, CSGH has the second largest cobalt series production capacity in the People's Republic of China.

Through its research and development division, CSGH owns a proprietary series of nanometer technologies that supply state-of-the-art components for advanced lithium ion batteries. Leveraging its state-of-the-art technology, high-quality product line and scalable production capacity, CSGH plans to create a fully integrated supply chain from the primary manufacturing of cobalt ore to finished products, including lithium ion batteries.

I’m sure many of you saw the hottest IPO this year, A123 Systems (AONE). AONE was a way for investors to play the lithium craze as the company is a lithium battery manufacturer. In our opinion, a much better way to play the upcoming lithium boom is with the producers of the lithium battery components themselves, because these components are valuable commodities. The largest U.S.-based publicly traded lithium battery component company, Rockwood Holdings Inc. (ROC), surged from a low this year of $3.36 to its current price of $24.05.

CSGH is a profitable company, which is hard to come by as this industry is at the forefront of its market acceptance. CSGH has grown revenues from about $8.2 million in 2007, to $25.3 million in 2008, and to over $37 million in 2009. CSGH’s net income has grown from $417k in 2007 to over $8.5 million this year. In our opinion, CSGH has the potential to continue growing strong for many years to come. CSGH also has a solid balance sheet with no debt and over $11.6 million in cash.

CSGH recently announced that its lithium iron phosphate product met the required technical specifications and now has 21 customers undergoing technical testing of the product for their own use. CSGH also announced that it has signed a letter of intent with Beijing Zhongxinlian to jointly produce its new lithium iron phosphate-based batteries for use in electric vehicles under the registered brand name of "ShenKun."

CSGH has effectively transformed itself into an end-to-end supplier in the lithium ion battery space, providing all parts of the supply chain from raw materials to finished product.

The world’s auto companies plan 42 new electric models by 2012, according to an October study by PricewaterhouseCoopers LLP. Instead of running on gasoline, these vehicles will be powered by lithium batteries that are charged with electricity made in plants fueled by coal, natural gas, nuclear power, solar power and wind.

By 2020, one in 10 cars manufactured -- or more than 6 million vehicles -- may be powered by lithium batteries, says Carlos Ghosn, chief executive officer of Nissan Motor Co. Car battery sales could jump to $103 billion a year in the next two decades, up from $100 million a year as of October 2009, according to a report by Credit Suisse Group AG. Ventures backed by A123 Systems Inc., Dow Chemical Co. and Johnson Controls Inc. are planning to ramp up production of lithium car batteries or cells.

The lithium market is set to boom headed into the New Year and we feel CSGH is one company everyone should add to their watch list as it seems to be the most overlooked lithium company we have come across with the most significant upside potential.