Replies to post #3477 on China Growth Stocks

[BiotechValues]

You're correct Brennus. I listened to the call also and the new plant is fully funded.

That question was asked twice I believe and both times the answer is the same: The plant is fully funded and they have no long term debt. She even went on to say they anticipated no need for additional money for start-up expenses.

[realfast95]

CCGY - Brennus I was saying that they need to record the financing on the books. LPIH is taking a $14 million non-cash financing charge for FY2010 for their new facility. How much will CCGY have to post? Unless your suggesting CCGY is magical, oh wait, I think you are saying they are indeed.

[abh3vt]

Brennus, re CCGY. I don't think you addressed the central concerns that realfast95 raised, i.e.:

1. Higher GDP could cause input costs to rise which led to a shutdown of biodiesel last year.

I'll ask the same question in a different way....You cite some huge estimates for the new plant, but how can investors believe the margin forecasts that were put out over a year ago and didn't seem to accurately reflect the crosswinds that can hurt this company even in a dynamic growth environment?

2. Your team is playing Chemicals for export, not biodiesel.
And those results could be 6 months away.

Another good comment. Exports will be hurt by the stronger RMB, not to mention tepid growth in areas that are not China.

The last quarter's eps, even adjusted for the non-cash charges, were only around 0.01. The stock is now trading at 0.75, which seems to have built in an expectation of a 0.03+ quarterly eps number for Q3. We'll see what happens....