China Growth Stocks

[Drexion2004]

YONG: Mining profit Margins are 30-40% easily, so the net impact to YONG will really depend on what percentage of its cost comes from the raw material costs. I think it is easily 33%+ (if I remember it correctly), so getting rid of a 35% middle-man profit-taker could give a 11%-13% margin increase once things are in full production.

The new factory is also really close to the mine, cutting down on transportation expenses that they must pay to get materials right now.

Disclosure: I am long YONG.

-Fernando