Replies to post #3535 on China Growth Stocks

[BiotechValues]

right- saw that from GU the day they reported.

Here's CCGY's forward statement last q for contrast:

"We are very pleased with our results for the quarter, reflecting a healthy recovery in volume and average selling prices for both our specialty chemicals and biodiesel products from depressed first quarter levels, which allowed us to expand our gross margins and return to profitability at the operating level," said Mr. Tai-ming Ou, China Clean Energy's Chairman and CEO. "We are also pleased to reaffirm that the Jiangyin plant is on target to come on stream in the fourth quarter, which will allow us to substantially expand our specialty chemical and biodiesel capacity. As we move into the third quarter we expect to continue to benefit from the recent recovery in the global economy and hope to make further progress on both our top and bottom line results as we increase capacity utilization and benefit from firm pricing."

The CCGY conf. call was pretty upbeat also, and I think it's because they're making the move successfully into higher margin specialty chemicals.

But CCGY is one of many China microcaps (including LPIH) that I like here. I just think it's undervalued on a forward basis and you don't agree- which is why we have a market.

[Brennus]

Yeah. That was for GU's reporting period ending 30jun09. That's the same reporting period that CCGY already had their conference call for.

This is the conference call I referenced earlier.

In that call they mentioned that their feedstock costs were down about 8% yoy, but depressed selling prices kept biodiesel margins down around 4%. GU is going to be buying as much feedstock in the region, so expect that to continue to help feedstock costs.

Meanwhile, biodiesel ASP went from 3608 RMB/ton in 1q09 to 3870 RMB/ton in 2q09. Looks like GU had a little higher average selling price due to their geographic diversity. Probably the price in CCGY's selling region is a little lower due the the GU/CBI/CCGY triumvirate. Guess that makes CBI the low cost producer...but only because they qualify for the tax break/refund. Hopefully CCGY will be able to achieve that same status soon.

In the meantime, CBI should be reporting sometime this week or next. It will be interesting to hear what they have to say. Based on the way that stock has been acting, people are expecting to hear good things.