Replies to post #62521 on China Growth Stocks

[2morrowsGains]

SGZH...Re: EPS estimates...I am assuming there will be a ramp-up when in fact the actual wording in the PR is this..."We will now resume partial operations at the Xing An Mines during the fourth quarter and full operation will commence in the second quarter 2011, which we anticipate will significantly boost our revenues and lower our costs."

Either way, Q4 2010 will only have 2 months (or less) of production from the Xing An mine...
"...the Company will resume coal production at its Xing An mine in November 2010."
http://finance.yahoo.com/news/US-China-Mining-Group-Inc-prnews-4154056356.html?x=0&.v=1

So if this is not a ramp-up procedure, then there's a chance that Q1 may be a notch high in my 2011 EPS estimates. But even if it is, EPS should still come in higher than FY2010 Q4. And FY2011 Q2 & Q3 would then show huge increases IMO.

I think the thing that really has me thinking SGZH is way undervalued here is when I go back and look at what they were doing before the coal mine closure...
$1.39 in EPS for the first 6 months of 2009...
http://www.nasdaq.com/aspx/revenueepssummary.aspx?symbol=SGZH&selected=SGZH
And here are the things that have changed since 2009...

- The Xing An mine can now operate year-round.
- Operating costs will be lower.
- The price of coal is stronger.
- Brokerage busness is stronger.

Here are a few excerpts from recent PR's...

- "We remain very focused on maximizing the value of all our assets and expect our brokerage business to be a significant revenue contributor to our company going forward."

- "The Company expects to be at the full production of 600,000 tons when all upgrades have been completed, in May of 2011."

- "Upon completion of these programs and modifications, the Xing An mine will be able to maintain coal processing operations year-round and will increase coal production from 600,000 metric tons per year to 900,000 metric tons per year pending approval from local Government in 2012."

- "We are also expanding our efforts to pursue other mining properties and short term production opportunities which could be revenue contributors for us in the 2011 fiscal year."

- "We will now resume partial operations at the Xing An Mines during the fourth quarter and full operation will commence in the second quarter 2011, which we anticipate will significantly boost our revenues and lower our costs.