China Growth Development, Inc. (CGDI)

[ratobranco]

CGDI - pictures of the shopping centers.

http://www.chinagrowthdevelopment.com/cgdi_subsidiary.html

Quick DD for those interested:

CGDI is a commercial real estate investment company located in Taiyuan, Shanxi province. They own a majority stake in 6 shopping malls (see link for photos) and are planning the construction of 2 additional malls.

Exact equity structure: CGDI owns 80% of TRBT, TRBT owns 76% of the shopping centers.

Current Price: .44

Book Value: .82 (note, the commonly mentioned book value of 1.20+ listed on geoinvesting does not take into consideration the equity structure described above and is therefore too high)

Tangible Book Value: .66

Earnings:

4Q09 - ? / 3Q09 - .03 / 2Q09 - .03 / 1Q09 - .01

4Q08 - (.05) / 3Q08 - .04 / 2Q08 - .02 / 1Q08 - .04

They were hit hard by the recession in 4Q08 and have been steadily recovering since then. Their most recent 10Q was positive.

If you treat the recessionary 4Q08 and 1Q09 as outliers, the trailing P/E is ~ 3.5.

It's tough to lose with this one -- half of book value and roughly 3.5 times earnings with a clear trend towards recovery. The malls look pretty nice. Great play on the growing chinese consumer.

There is a seller at .44 right now, just bought some.