China BAK Battery, Inc. (CBAK)

[Ecomike]

I added to my share count today, added at $1.04

Not sure this is the bottom yet, holding dry powder to add more if it goes way under $1. Stockholder equity is still over $2/share, so if the ongoing losses continue, we are still buying equity here at 50% off on a major player in the li-ion battery market.

I noticed today that their losses on the last quarters nearly equal their heavy R&D expenses, which I doubt they are capitalizing? If I am right, and the R&D efforts are positive, this is even a better buy than it appears right now, as they are spending $2 million dollars per quarter on R&D!!! Also the losses nearly equal interest expenses on debt, so a JCI would probably buy these guys for a lot more than a $1/share if any M&A got rolling in the sector (XIDE has cash and may be eying Li-ion plays to buy!!!!). I still think they will start to turn a profit later this year. The next quarter may not be impressive if Japan (Tsunami, etc) hurt them this quarter, but it could have helped them if China filled a void in Japan capacity to produce and ship this quarter? And they just announced the E-Bike battery sales are taking off, which is one of the major profit centers that has ABAT making a good profit.

Shorts may start covering at $1 to avoid increased margin under $1/share. Also of interest, is that CBAK annual sales are nearly 4 times the current market cap, because the stock price is so low now!

Also 60% of the shares are owned by insiders and institutions!!!!