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Sunday, March 04, 2007


Yes, I've been slowing down quite a bit (so have the child laborers). With the market dropping now, it seems unlikely that I'll need to find another investment very soon. So I don't expect much activity in finding new companies.

CHVC, CHINA VOICE HOLDING CORP., website, sec, yahoo, chart, Com ($0.001)

A telecom company selling voice-over-IP stuff dealing with China. No relevant SEC filings. The only financial statements I found were here. 80% of the company assets are intangible assets (goodwill and a patent). Q1: Revenues are down. Gross margins below 30%. Operating expenses are nearly twice as high as revenues. Big losses. 88 million shares. 6 million warrants. Also preferred stock. They were recently awarded a Chinese patent. If you're not in the specific industry, it's not likely that you can predict whether this will be successful or not (and even then, it's probably a crap shoot).

CHWG, CHINA WATER GROUP, INC., no website, sec, yahoo, chart, Com ($0.001)

Chinese wastewater treatment and engineering projects. Weak balance sheet. Income statement is whipsawed by fair value of options/warrants. Had to pay a lot of money to investors because they were late in SEC filing (not surprising). Heavy single customer concentration (54% and another at 24%). Probably worth about 10 cents per share.

CPHI, CHINA PHARMA HOLDINGS, INC., no website, sec, yahoo, chart, Com ($0.001)

China drug company with a mix of western medicines and traditional Chinese medicines. While revenues have been growing fast (nearly doubling in one year), AR has been expanding a great deal. In the 9 months ending Sept 30, 2006, AR increased by $5.6 million with total revenues of only $13.7 million. 41% of revenues haven't been collected. They say that this is a normal credit period for collection for the pharm industry. Also supplier concentration risk.
Q1: Revenue=$4.7 million, AR increase=$2.6 million
Q2: Revenue=$4.0 million, AR increase=$0.8 million
Q3: Revenue=$5.0 million, AR increase=$2.2 million
Then on Feb 1, 2007, they raised more money by offering 2.5 million shares and a bunch of warrants.
See what happens in the 10-K.

CPNE, COMMERCEPLANET, INC., website, sec, yahoo, chart, Com ($0.001)

Online membership based retailer: consumer electronics, A/V equipement, software, small office equipment, automotive accessories, travel stuff, networking equipment. 120K members at the end of 2006 for OnlineSupplier.com. Serviced 600K customers total. 25K people organized their own Internet based business.

They charge members a monthly fee for tools/services to create and run Internet auctions. Also coaching services. Also value-add services: prescription drug plans, roadside assistance, tax/legal services, real estate listings, etc.

Just looking at the main website, they have a cheap trial offer but if you don't cancel it, you get stuck with $50 per month in charges.

It seems like this business could get mauled at any time due to any number of causes (such as some massive competitor or simplification by eBay and others). The business earned about 15 cents a share totally diluted in 2006. Good margins. Reasonably good cash flow. But the stock isn't cheap at around $2.50.

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