CPQQ China Power Equipment Inc. This little sleeper is sliding so far under the radar it has road rash.
This Chinese company produces advanced technology amorphous alloy energy-efficient transformers and transformer cores which are an important component for a more energy-efficient grid
CPQQ is a big fish in its industry, with increasing net profits, little debt, tons-o-cash on hand and trading at a fraction of its book value.
Check out these numbers…..
• As of the 2013 Q1 they have $46.113 million in assets and only $3.221 million in liabilities giving them a book value of $42.891 million.
• CPQQ has a net profit of $0.23/share or a P/E of 1.5x.
• 2012 net sales increased by 9% from 2011
• At $0.39 CPQQ present market cap is 7.61 million with 19.52 million shares outstanding
? This stock is trading at only 17.7% of its book value & should be priced at $2.16 based on book alone.
? To make the story even sweeter… CPQQ has $24.26 million or $1.23/share in ca$h. If this stock went up 310% it would only be at cash equivalent.
Looking into the past…
• At the end of 2009 CPQQ was at $4.00 per share with 14.9 million shares outstanding. They had $18.9 million in assets and $1.62 in liabilities for a book value of $17.26 million. They posted a loss -$0.32 for the year.
• Three and quarter years later, CPQQ increased their book value by $25.6 million to $42.9 million and posted a net profit of +$0.23/share. With 19.5 million shares outstanding.
The result of +.55/ share profitability & 148% growth….
stock price has plummeted -92% to $0.39
(Insert bemused and perplexed look here)
A few more notables …..
o I looked into eight other companies in the industry and this was the ONLY one showing a +net profit per share. Every other ticker posted negative earnings (I am sure there are other profitable companies, but I called “uncle” after eight.)
o They have never filed a late SEC quarterly.
o In 2010 they opened a new plant and increased production by 233% becoming a big player in the industry attracting Chinese government contracts.
o In February 2011, to armour against the big fraudulent Chinese company “witch hunt”, CPQQ upgraded to Mazars one of the top 10 global corporate auditors.
o Q3 2012 The management was urged by Barron partners CEO to buy back shares and pay a dividend to the shares holders.
o As of December 31, 2012, China Power was granted five patents regarding its’ products and specialized equipment, and received patent certificates. . ( Good review of their product in the 2012 10k)
o The ONLY long term liability is a lease payable of 110k.
*I have this little step where I sort my stock screen 5x to view the top stocks for each of my fave criteria. CPQQ landed in the top 5 each time.
Utterly gobsmacked that a company looking like a buying opportunity dream come true priced at $0.39. I Googled China Power Equipment to see what I could see…. you know what I found???
Nothing…. Not one analyst review, pump, or slanderous article. Only announcements for SEC filing.
All quality, no hype.
This competent management might be the quietest, but their financials speak volume. Q2 should be coming out like clockwork at the beginning of August… expect a good read
GLTA
