This CHGI earnings report one we couldn't pass up sharing Really is An outstanding rpt, and not just for a dollar stock.
2010 Fiscal Year Financial Highlights:
- Revenue increased 102%, from $15.4 million in 2009 to $31.0 million in 2010
- Gross profit increased 218%, from $2.2 million in 2009 to $6.9 million in 2010
- Gross profit rate increased 57.86%, from 14.17% in 2009 to 22.36% in 2010
- Operating income increased 383%, from operating loss of ($0.9 million) in 2009 to operating income of $2.4 million in 2010
- Net income increased 194%, from net loss of ($1.5 million) in 2009 to net income of $1.4 million in 2010
We've been tracking the stock alot closer, especially after they announced an upcoming plant opening this spring which will double capacity (likely to open in June).
Even without this new plant, check out CEO comments on the stock from the earnings rpt:
"We are thoroughly pleased that the Company's operations generated such robust growth and excellent results in 2010," said Donghai Yu, Chief Executive Officer of China Carbon. "We are especially proud to have increased our net income by over 190 percent and operating income by over 380 percent compared to 2009. We are glad to see increased revenue from expanded customer base due to market recovery and doubled production capacity, improved margin due to a higher margin product mix, as well as strong financing support from banks."
"We saw 2010 sales to both established and new customers, with about 45 percent of our total sales in 2010 resulting from our new customers. We have increased our production capacity from 15,000 metric tons to 30,000 metric tons in 2010. We are also currently operating at 100% production capacity. The increased capacity allowed us to fulfill more demand from customers. Before we were constraint from our production capacity," Mr. Yu continued. "It proved that our strategic decision to double our production capacity and to purchase additional levels of inventories was effective, as we were better prepared to supply the heightened demand for our products."
Mr. Yu further added, "Our core products all sold extremely well in 2010. Notably, we sold a greater proportion of our higher margin products. Graphite electrodes sales increased over 37 percent, fine grain graphite sales grew over 100 percent and high purity graphite sales rose over 500 percent. We look forward to further gains in revenue as we expect the demand for and our supply of our higher margin graphite products to both continue to rise in 2011."
Latter March we made mention on CHGI as one of our top 4 China picks, do in part to lifting from .60 since last Nov in addition to the upcoming plant opening / anticipation surrounding.
http://www.examiner.com/stock-market-in-denver/my-top-4-china-picks-under-2-bfar-particular
We first caught wiff on this stock from a colleague and Fox Business News anchor Tobin Smith in this report below:
www.nbtequitiesresearch.com/chgi
Debate today's weakness folks, especially given the fact the stock has shown ongoing support at current levels.
Last Trade:1.55Trade Time:10:24AM EDTChange: 0.07 (4.32%
Currently, the iron and steel industries are the largest consumers of graphite. But demand for graphite has been rising for other applications — researchers in the field of material science continue to find new uses for this durable, heat-resistant, electricity-conducting substance. Graphite will be used in the construction of next-generation nuclear reactors, which are expected to reach temperatures as high as 1,000 degrees Celsius in their cores — triple the temperature of today’s reactors.
Graphite is one of the few substances that can resist such heat.
Perhaps the single greatest testimony to graphite’s importance is the concern that governmental bodies have shown about its important role in security. A 2010 European Commission study regarding the criticality of 41 different materials to the European economy included graphite among the 14 materials high in both economic importance and supply risk. A recent WikiLeaks posting revealed that a list known as the Critical Foreign Dependencies Initiative developed by the U.S. Department of Homeland Security and the State Department included graphite mines in China among those overseas sites that could damage American interests if terrorists were to disable them. The U.S. military will also increasingly rely on graphite for battery and fuel cell applications, as the armed forces lessen their dependence on petroleum.
Bottom Line: Outlook increasingly bullish with this new earnings rpt / the upcoming plant opening. Highly debate in mid 1's moving foward as we've been stating in recent newsletters at www.greenbackers.com . Target back into 2 range into Spring and doubling into 2011.
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