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Sunday, September 25, 2005

China Expert Technology (CXTI)

China Expert Technology (website) their stock has gone the way of so many other Chinese companies this year: way up.

Based on the latest 10-K, their assets are $4m AR, $3.8 million prepayments, $3.2 million cash, $2 million non-current prepayments, a $3m loan to a director. Current liabilities are AP, and tax with some other stuff sprinkled in. Current ratio is about 3. $12.6 million equity based on $17.3 million assets.

Revenue of $26 million with $12.4 million gross profit. Expenses are less than $3 million. Net income $7.8 million or 33 cents a share. Cash flow is a bit on the weak side at $6.2 million due to big increases in AR and prepayments. The advances to directors/officers look crappy.

Looking at Q2 2005 results:
AR continued to increase to $6.1 million. Cost & est earnings in excess of billings appeared at $5.8 million, there's still $1.9 million due from a former officer. Prepayments are up even more overall ($5.1 million current, $1.8 million non-current).
$2.5 million is due to a former officer. Equity increased to $18.1 million.

Revenue for 3/6 months was $8.3 million / $17 million. Gross profit of $3.6 million / $7.7 million. Net income was $2.6 million / $5.5 million or 10.5 / 22.4 cents a share.

$3 million used in operations due to $5.8 cost & est earnings in excess of billing and AR increase and prepayment increase.

On the face of it, the company is worth $6/share. It's selling for about $2. It had been selling for about 50 cents not long ago.

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