Replies to post #48488 on China Growth Stocks

[ratobranco]

CCLTF - Beautiful Quarter. What a relief!

I was nervous, my fear was that they had a terrible quarter to report and had scheduled the warrant conversion after the report in order to ensure that as many people convert as possible. I almost sold some shares/warrants on Friday, but the price action convinced me not to. Very happy I didn't.

Assuming the conversion of all warrants, I get 1.10 in EPS for the 1st half. That's 2.20 for the year, or 2.7 P/E right now. Very strong.

Tempts me not to undo my conversion as well, but I still think I'm going to convert. The break even is around 10.00, and I just don't like the risk-reward of the stock reliably moving past that level given that there will almost certainly be a public offering and the warrant holders will no longer have Paul Kelley and Cheng Davis as voices on the board to protect them (since they have agreed to convert).

[throwerw]

CCLTF I may be wrong here, but I don't recall any previous discussion of such large capital expenditures having to be made at the old plant in 2010.

As it is, 56.2 million square meters is roughly double their capacity in 2009, so you can take out the one time merger costs and roughly double 2009 net income for 2011. However, margins are improving and there is still more expansion that could come from Gaoan in the first half of the year, so it could be more. I'm seeing at least 50 million in net income in 2011 on 14-15 million shares, not including warrants still outstanding. Of course, the share count is not clear yet and won't be until the tender offer is over.

Current cash balance, cash flow from the next two quarters, and bank loans should be enough to cover the planned capex. I would be very surprised to see a ridiculous financing, given management's incentive to hit $20 per share by April 2012.

[lostmyballs]

CCLTF 3rd qtr pretty much in the bag with sequential increase in product sales...10.6 million square meters to 11.5.... as stated in release