3SOF

Closing below $10 today is my stop ...

In my opinion, more attention needs to be paid to entry and exit points for this portfolio, especially in a bear market (yes, we are in a bear market).  Buy and hold is a pointless strategy when the profit made from doing so disappears.

Quoteauthor=pinoleropuro link=topic=10358.msg112857#msg112857 date=1204656417]
yikes!
this is being dropped like a hot potato, I wish I would have gotten out of it this morning.  
the daily stochastics are ripe for buying but the weekly stochastics are still pointing downward I don't know why I missed that!  

Hmmm...... yeah it does actually look very bad from a TA point of view. In fact it looks so bad that I am tempted to buy  

I don't think that anyone who have spend a little time reading this thread is in doubt that this is a great long-term investment. Shengda is a market leader in a very fast growing industry in one of the few economies in the world that are not fighting a recession but on the contrary is trying to cool down the economy.

I am not sure what they are going to report on March 17 but I feel pretty sure that this is a great long-term investment in an otherwise very uncertain market.

Could Shengda be an alternative to my precious Seagate bonds  

Well I am tempted. It is a bit tedious to have to wait 6 months to collect interest  

On a serious note I am very concerned about the US economy. So let me give you my 2 cents on the US economy. And here is the first problem. If I don't remember wrong my 2 us cents were worth 2 Euro cents when 3SOF opened. Today they are worth 1.3. Without having made a single bad investment I have lost 35% (I am still up in Mozambican Metricais though!)

With the rest of the world looking quite healthy compared to US I am wondering for how long international investors will continue to hold the hand under the US stock market (and more importantly the US bond market).

From my perspective the US is making a hugh mistake by lowering interest rate and ignoring an increasing inflationary pressure. It seems like the US is more concerned about the stock market and next weeks unemployment figure than the long-term wellfare of the nation.

Yes lowering interest and giving tax rebates to everybody will help fuel US consumption and thereby by default the US economy - but at what cost:

• Increased trade deficits
• Devaluation of the dollar
• Imported inflation

Yes I do know that a lower dollar will help US exports but us economy compared to Europe's or Asia's is not export driven and long-term US will only have one choice and that is to lower private consumption and accept high unemployment.

Dallas Federal Reserve President Richard Fisher said today that:" it's better to have the economy go into an economic downturn than to risk a pickup in inflationary pressure through low rates due to global forces."

Unfortunately he only has one vote but it is at least nice to know that there is some common sense at the table when the FED meets.

Coming back to Shengda – it seems I should have bought when I started writing this nonsense. At least I would have been a bit richer despite the awful TA  

slides from last conference, probably I will buy below 9$ 

2nd part of slides just fyi

SDTH issued the following press release yesterday:

ShengdaTech Schedules Conference Call to Discuss 2007 Fourth Quarter and Year End Results
PR Newswire(Tue 8:00am)

And people are afraid of the 4th quarter results, because of what we've discussed earlier:

QuoteBecause they maintained their guidance many people fear that 4th quarter EPS will be $0.09 to meet the guidance, which is way below the $0.14 achieved in the 3rd quarter. But this is nonsense to me, I think they'll do at least $0.15 in Q4 2007 and $0.5 in the full year.

I just want the company to release the results asap and to provide 2008 guidance, which I expect to be something between $0.65 and $0.75 EPS. This should be enough to put SDTH back up to the $14-$15 level. It would also be nice if they announced further plans to expand NPCC's production capacity.

Quote from: Garoh on March 04, 2008, 10:37:20 AM
Hi

To those who haven't bought this stock yet ...

It's a gold chance to get in around $10   

I'm back after I sold it a month ago ...

Quote from: Garoh on March 04, 2008, 02:25:18 PM
Closing below $10 today is my stop ...

Have you ever tried trading futures Garoh? You seem to have developed a nice skill to quickly change your views and flow with the market, which is a necessary condition to be a successful futures trader.

Quote from: buddjas1 on March 04, 2008, 02:49:06 PM
In my opinion, more attention needs to be paid to entry and exit points for this portfolio, especially in a bear market (yes, we are in a bear market).  Buy and hold is a pointless strategy when the profit made from doing so disappears.

I still disagree that we're in a bear market. I guess that until we get a new low below $126 on the SPY (by a convincing margin), I'll be allowed to remain a long term bull on the stock market.

Have you ever read "One Up on Wall Street" by Peter Lynch buddjas1? If you do you'll see that this great stock picker defends that an investment can only be judged 3 years after it was made. Any judgment before that can be counterproductive, since the motivations that lead to a buying decision were long term oriented, and the market values stocks in unpredictable and irrational ways over the short term.

But I get your point, thanks for your input.

Michael, what a pleasure to read your analysis, both of SDTH and the US economy!

My views are somewhat different. I think the US is suffering a psychological depression because it is clear that it will lose its leadership role of the World in a decade or two. Probably this happened in Britain too around 1900 (it would be interesting to know). But of course, later on, Britain was a lot better having the US as a huge commercial partner than it would be without it. The same thing now with the US and China, in my view. But of course, these are all very long term thoughts.

If we're entering a new Bear Market the previous Bull ended without any euphoria or optimism.  The public was never invited to get back in. None of my friends has stocks, like they did in 1998 and especially 2000.

Anyway, moving back to SDTH ... this company goes to other companies and says: "hey, do you want to save some money and at the same time improve the quality of your products?" How can their potential costumers say no?

I think SDTH will be a $5 B company in a few years and nothing will shake me out of this conviction.

Ah, I almost forgot pinoleropuro and his stochastic oscillator. I thought you were convinced by what happened with PAL ...

Quote from: pinoleropuro on March 04, 2008, 01:46:57 PM
yikes!
this is being dropped like a hot potato, I wish I would have gotten out of it this morning. 
the daily stochastics are ripe for buying but the weekly stochastics are still pointing downward I don't know why I missed that! 
there seems to be strong support around 8.47/share.
then the daily stochastics and weekly stochastics will be lined up and ripe for loading up.
JMHO

You're probably using www.stockcharts.com to get your stochastics, right?

If you want, change the parameters you use here ...



... this way the stochastics will say anything you want and you'll always be happy

I'll keep holding SDTH for the long term.

Quote from: Garoh on March 04, 2008, 10:37:20 AM
Hi

To those who haven't bought this stock yet ...

It's a gold chance to get in around $10   

I'm back after I sold it a month ago ...

Quote from: Garoh on March 04, 2008, 02:25:18 PM
Closing below $10 today is my stop ...

Have you ever tried trading futures Garoh? You seem to have developed a nice skill to quickly change your views and flow with the market, which is a necessary condition to be a successful futures trader.

Thanks David , No I've never tried trading futures and I won't ...I don't want to get confused 
I shouldn't fight the market's  trend , in such  too volatile market one need to catch any chance and protect profits ..
I'm happy with my work , Options and stocks with more hardwork to get in at the right price and timing .
It's very important to pay attention to TA David . It tells you many things about hidden info in most cases .

Let's see if SDTH can beat the market 

QuoteIt's very important to pay attention to TA David . It tells you many things about hidden info in most cases.

I disagree, especially with what I would call the "tic-tac" technical analysis you're talking about. But I respect your views.

It's funny how people are always so scared of trading futures, yet they're more than willing to trade options, which are far more complex and risky than futures.

Quote from: Garoh on March 04, 2008, 02:25:18 PM
Closing below $10 today is my stop ...

You were lucky yesterday, since SDTH closed at $10.02 and now trades at $10.35. We'll see if it gathers some more positive momentum ... but like Michael says, SDTH is a stock to own for the long term, at least if one is an investor.

Thanks for your inputs, keep them coming

Quote from: David Randolph on March 05, 2008, 10:24:39 AM

QuoteIt's very important to pay attention to TA David . It tells you many things about hidden info in most cases.

I disagree, especially with what I would call the "tic-tac" technical analysis you're talking about. But I respect your views.

It's funny how people are always so scared of trading futures, yet they're more than willing to trade options, which are far more complex and risky than futures.

Quote from: Garoh on March 04, 2008, 02:25:18 PM
Closing below $10 today is my stop ...

You were lucky yesterday, since SDTH closed at $10.02 and now trades at $10.35. We'll see if it gathers some more positive momentum ... but like Michael says, SDTH is a stock to own for the long term, at least if one is an investor.

Thanks for your inputs, keep them coming

Well at least I'm doing well ..
I'm not trading futures because it's scary , it's because I don't like them. Yes Iptions is very risky but I understand them very well and so far i'm 85% wining on all of my trades 

Sdth again , No I'm not lucky it closed at above $10 , however I was almost sure it wouldn't do that 

It's a nice stock and the next target i'm planning to sell at is $15 but I'm afraid of March 17 

Let's wish the best for all of us

Quote
On a serious note I am very concerned about the US economy. So let me give you my 2 cents on the US economy. And here is the first problem. If I don't remember wrong my 2 us cents were worth 2 Euro cents when 3SOF opened. Today they are worth 1.3. Without having made a single bad investment I have lost 35%

²

SDTH is a long term play on the Chinese consumer, which I think is the macroeconomic emerging trend.

SDTH will have recurrent and growing revenues due to participation in the making of perishable and absolutely necessary products like tires, paper, paint, etc.

I believe it is possible (I mean, everything is possible) that SDTH comes down to $7-$8, as its forward earnings multiple contracts to 10 or so, but there I would consider it a strong buy, not a sell.

I'll continue holding SDTH for the long term.

QuoteI believe it is possible (I mean, everything is possible) that SDTH comes down to $7-$8, as its forward earnings multiple contracts to 10 or so, but there I would consider it a strong buy, not a sell.

Unfortunately, it's happening, as SDTH closed at $8.9 yesterday. I see SDTH's business as almost independent of the economic cycle, however, valuation gyrates as investor's appetite for stocks changes.

Anyway, something happens, over the years, which makes companies worth $100 M, $1 B, $10 B or $100 B. The gyrations in valuations are then made around these "intrinsic fundamental values".

I see SDTH's "intrinsic long term fundamental value" around $5 B, when the company fully executes on its plans to increase NPCC annual production capacity to 1,000 tonnes.

SDTH's current market cap is $500 M.

Some stocks will rise 10 fold, even in a severe bear market, and I believe that SDTH, being linked to the Chinese consumer, has a good chance.

I'll keep holding SDTH for the long term. 

SDTH will release its 4th quarter results Monday before the market open and I expect them to be above expectations. This will at least dismiss that confusion about the company's 2007 guidance.

The 2008 guidance will probably drive the share price over the short term. In early 2007, after earning $0.34 per share in 2006, they gave us the $0.44 guidance, a 29% increase in EPS, which I expect the company to beat by a comfortable margin (I expect SDTH to make $0.5 EPS in 2007).

If they foresee another 29% increase they'll guide for $0.65 EPS in 2008. Well I guess this would leave the stock more or less where it is now ... I have some hope that they could guide somewhat higher, to $0.75 - $0.80 EPS ... this would make the stock surely rise.

Anyway, if nothing extraordinary occurs in 2008, I guess SDTH will trade between $6.5 and $15.

There's always the possibility of faster growth, due to new applications for NPCC or international expansion, but as it is now I guess this will be the outcome.

I see SDTH as a safe long term investment to be held for several years.

Source: ShengdaTech Inc.      Helpful? We'll see.

ShengdaTech, Inc. Announces Record Fourth Quarter and Full Year 2007 Results
Monday March 17, 7:00 am ET
-- Record fourth quarter revenue and net income climb 23.5% and 26.5%, year-over-year, respectively
-- NPCC Products account for 48.2% of fourth quarter revenue

TAIAN, Shandong, China, March 17 /Xinhua-PRNewswire-FirstCall/ -- ShengdaTech Inc. (Nasdaq: SDTH - News), a leading manufacturer of nano precipitated calcium carbonate (NPCC) and coal-based chemical products manufacturer in the People's Republic of China ("PRC"), today reported financial results for the fourth quarter and year ended December 31, 2007.

ADVERTISEMENT
Click here to find out more!
Fourth Quarter 2007 Highlights

-- Record revenue increased 23.5% year-over-year to $28.6 million

-- Gross margin increased 2.7 percentage points year-over-year to 35.8%

-- Net income increased 26.5% year-over-year to $7.8 million, or $0.14 per diluted share

Full Year 2007 Highlights

-- Record revenue increased 38.6% to $100.7 million; exceeding guidance of $96 million to $98 million

-- NPCC revenue increased 112.3%; contributed 46.4% to total revenue

-- Record net income increased 54.2% to $27.0 million, or $0.50 per diluted share; exceeding guidance of $23.0 million to $24.4 million

ShengdaTech's record revenue for the fourth quarter of 2007 is primarily attributed to the new NPCC lines added in July 2007 reaching full capacity in November 2007, resulting in 130,000 total metric tons of capacity in production. The NPCC segment contributed 48.2% of total revenue for the quarter and the chemical segment contributed the remaining 51.8% of total revenue compared to 40.5% and 59.5%, respectively, in the same period a year ago.

"We are pleased to report our third consecutive quarter of revenue and net income growth which is due to continued strong market demand for our NPCC products," Mr. Xiangzhi Chen, President and CEO of ShengdaTech, commented. "In the fourth quarter of 2007, we added 13 new customers including five tire manufacturers, three PVC producers, three latex producers, a paint manufacturer and a paper manufacturer. In addition, our new NPCC lines, with a total of 40,000 metric tons of capacity, reached full operating capacity this quarter."

Revenue from NPCC products increased 46.9% to $13.8 million in the fourth quarter of 2007 from $9.4 million in the fourth quarter of 2006. The increase in year-over-year revenue was due to the addition of 40,000 metric tons of NPCC capacity in July 2007 which reached full capacity in November 2007. Total volume of NPCC sold during the fourth quarter of 2007 was 35,680 metric tons. NPCC for use in tires represented the majority of the NPCC sales at 43.4% of total NPCC revenue. Sales of NPCC for use in PVC and latex experienced the strongest growth in the fourth quarter, up 8.6% and 20.7%, respectively, from the third quarter of 2007. PVC and latex represented 39.0% and 9.9%, respectively, of total NPCC revenue. NPCC used in printing ink, paint, and paper represented the balance of 7.7% of NPCC revenue.

Revenue from chemical products increased 7.5% to $14.8 million in the fourth quarter 2007 from $13.8 million in the comparable quarter in 2006. Sales of liquid ammonia and methanol increased 9.8% and 8.3%, respectively, from the third quarter of 2007 as a result of stronger market demand and an increase in market price. Liquid ammonia and methanol represented 38.4% and 19.5%, respectively, of the chemical segment's revenue. Sales of ammonia bicarbonate declined 6.3% from the third quarter of 2007, as the fourth quarter is the seasonally slowest quarter for agriculture, and subsequently chemical fertilizer use in northern China. Ammonia bicarbonate represented 25.4% of the chemical segment's revenue and melamine contributed the balance of 16.6% of sales during the quarter.

Gross profit for the fourth quarter of 2007 was $10.3 million, up 33.6% from $7.7 million in the fourth quarter 2006. Gross margin for the quarter was 35.8% compared to 33.1% for the same period in 2006. The chemical segment benefited from strong pricing for liquid ammonia, methanol, and melamine in the quarter resulting in gross margin of 29.5%, up 3.3 percentage points from 26.2% in the same period in 2006. Gross margin for the NPCC segment was 42.6% in the fourth quarter compared to gross margin of 43.3% in the same quarter last year. The slight decline of gross margin was due to a combination of increased depreciation expense, cost of coal used in the manufacturing process and transportation cost of raw materials.

Selling expenses for the fourth quarter of 2007 were $0.5 million, or 1.8% of revenue, unchanged from $0.5 million, or 2.2% of revenue, in fourth quarter 2006. General and administrative (G&A) expenses were $1.3 million or 4.6% of revenue, compared to $0.9 million, or 3.8% of revenue, in the same period last year. The increase in G&A expense was mainly attributed to expenses associated with reaching compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and other public company costs.

Operating income for the fourth quarter of 2007 was $8.4 million, up 34.2% from $6.3 million in the same period a year ago. Operating margin was 29.5% compared to 27.1% in the fourth quarter of 2006.

Net income for the fourth quarter of 2007 increased 26.5% to $7.8 million from $6.1 million in the same period a year ago. Fully diluted earnings per share for the fourth quarter 2007 were $0.14, compared to $0.11 the same period last year.

Full Year 2007 Results

Revenue for the full year 2007 increased 38.6% to a record $100.7 million, compared to $72.6 million in 2006. The NPCC segment generated 46.4% of revenue, or $46.7 million in 2007, up 112.3% from $22.0 million in 2006. The chemical segment generated the remaining 53.6% of revenue, or $53.9 million, up 6.6% from $50.6 million in 2006. Gross profit was $34.6 million, up 61.7% from $21.4 million for the full year 2006. Gross margin was 34.3% in 2007 compared to 29.4% in 2006. Operating income was $29.6 million, up 69.1% from $17.5 million in 2006. Operating margin was 29.4% in 2007 compared to 24.1% in 2006. Net income increased 54.2% to $27.0 million from $17.5 million in 2006. Fully diluted earnings per share for 2007 were $0.50 compared to $0.34 for the full year of 2006.

Financial Condition

As of December 31, 2007, ShengdaTech had $26.4 million in cash and cash equivalents, $43.8 million in working capital and no long-term debt. Net cash provided by operating activities for the year was $13.8 million, including the impact of $17.7 million advanced to suppliers for equipment for the 60,000 MT NPCC lines. Shareholders' equity stood at $89.1 million, up from $57.1 million at year end 2006.

Recent Events

On January 2, 2008, ShengdaTech announced it developed a new NPCC application for use in surface coating for top-grade color ink jet paper.

On January 31, 2008, the Company began trading on The NASDAQ Global Select Market.

On February 27, 2008, ShengdaTech announced it successfully developed a new NPCC product for use in polyethylene ("PE") plastic products.

Business Outlook

ShengdaTech is in the process of completing the test runs on its three new stainless steel NPCC lines in Xianyang City, Shanxi Province. Each line has 20,000 metric tons production capacity and is expected to ramp up to full capacity by August 2008. The stainless steel lines have a production life of 30 years compared to 10 years for carbon steal lines. In addition, the stainless steel ensures the purity of the NPCC particles enabling the Company to target higher-end markets and international manufacturers. The Company has been successful in developing and commercializing new applications of NPCC for paper and polyethylene manufacturing, and is working on developing new NPCC applications in a variety of markets such as asphalt, automobile paint and silicone-adhesives.

ShengdaTech continues to evaluate acquisition opportunities in the chemical segment and to actively explore potential sites in Shandong Province for its next phases of NPCC expansion. The Company expects 2008 revenue and net income to be in the range of $132 - $134 million and $33 - $35 million, respectively, for fully diluted earnings per share of $0.62 - $0.65.

"The opportunities for growth in our NPCC and chemical businesses remain robust. We will continue growing our NPCC business by expanding capacity, developing new higher-end NPCC applications and increasing exports," commented Mr. Chen. "We are aggressively evaluating acquisition candidates in the chemical business and exploring potential sites in Shandong Province for the next phases of NPCC expansion. We are optimistic that we will be successful in finding a location that will meet the capacity requirements of our strategic plan."

Conference Call

ShengdaTech will host a conference call at 9:00 a.m. EST on Monday, March 17, 2008, to discuss the 2007 fourth quarter and year end financial results. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 888-419-5570. International callers should dial 617-896-9871. The pass code for the call is 57786686. If you are unable to participate in the call at this time, a replay will be available on Monday, March 17, 2008 at 11:00 a.m. EST through Monday March 31, 2008. To access the replay, dial 888-286-8010, international callers should dial 617-801-6888. The conference pass code is 92199623. This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://www.shengdatechinc.com . Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a 90-day replay will be available shortly after the call by accessing the same link.

About ShengdaTech, Inc.

ShengdaTech, Inc. ("The Company") is engaged in the business of manufacturing, marketing and selling a variety of nano precipitated calcium carbonate ("NPCC") products and coal-based chemicals for use in various applications. The Company converts limestone into NPCC using its proprietary technology. The unique chemical and physical attributes make NPCC a valuable ingredient in tires, paints, polyvinyl chloride ("PVC") building materials and other products. It enhances the durability of many products by increased strength, heat resistance, and dimension stabilization. The Company is also engaged in the manufacture and sale of coal-based chemical products namely ammonium bicarbonate, liquid ammonia, melamine and methanol. The Company markets and sells its coal-based products mainly for chemical fertilizers and raw materials in the production of organic and inorganic chemical products, including formaldehyde and pesticides.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by ShengdaTech on its conference call in relation to this release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding the Company's ability to prepare for growth, the Company's planned manufacturing capacity expansion in 2008 and predictions and guidance relating to the Company's future financial performance. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand especially in the tire industry, changes in composition of tires, pricing and demand trends for the Company's chemical products, changes to government regulations, risk associated with operation of the Company's new manufacturing facility, risk associated with large scale implementation of the new NPCC manufacturing process, the ability to attract new customers, ability to increase its product's applications, ability of its customers to sell products, cost of raw material, downturns in the Chinese economy, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.


                       SHENGDATECH, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                          For the Three Months        For the Years Ended
                                  Ended
                              December 31,                  December 31,
                               2007         2006         2007           2006
                        (unaudited)  (unaudited)
    Net Revenue:
      Chemical          $14,828,065  $13,792,226  $53,933,120    $50,592,217
      Nano-material      13,795,137    9,389,676   46,721,673     22,007,814
       Total Net
        Revenue          28,623,202   23,181,902  100,654,793     72,600,031

    Cost of Revenue:
       Chemical          10,448,041   10,178,837   39,282,251     37,924,593
       Nano-material      7,915,655    5,326,269   26,812,587     13,297,976
         Total cost
          of revenue     18,363,696   15,505,106   66,094,838     51,222,569

    Gross Profit:
        Chemical          4,380,024    3,613,389   14,650,869     12,667,624
        Nano-material     5,879,482    4,063,407   19,909,086      8,709,838
         Total Gross
          Profit         10,259,506    7,676,796   34,559,955     21,377,462

    Operating expenses
     Sales & Marketing      495,032      508,805    1,771,168      1,260,647
     General &
      administrative      1,328,920      882,967    3,232,911      2,641,474
    Total operating
      expenses            1,823,952    1,391,772    5,004,079      3,902,121

    Income from
     operations           8,435,554    6,285,024   29,555,876     17,475,341

    Non-operating
     income (expense)       -12,094     -199,159      -12,094        -89,068
    Interest Income          71,318       62,476      274,203        140,375
    Income before
     provision for
     income taxes         8,494,778    6,148,341   29,817,985     17,526,648
    Provision for tax       715,209           --    2,787,640             --

    Net Income           $7,779,569   $6,148,341  $27,030,345    $17,526,648

    Basic and Diluted
     Earnings Per Share       $0.14        $0.11        $0.50          $0.34


    Basic Weighted
     - Average Shares
       Outstanding       54,143,920   54,095,103   54,107,408     51,900,641
    Diluted Weighted
     - Average Shares
       Outstanding       54,193,667   54,257,388   54,188,410     52,022,801




                       SHENGDATECH, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                               December 31,     December 31,
                                                        2007            2006

    ASSETS
    Current Assets
    Cash and cash equivalents                    $26,366,568     $34,684,142
    Trade accounts receivable, less allowance
     for doubtful accounts of $0                   7,889,001       5,588,676
    Other receivables                                 13,962         157,352
    Advances to suppliers                         19,436,544         872,289
    Inventory                                      1,955,384       2,151,612
    Receivable from related parties                    1,712           1,601
    Total Current Assets                          55,663,171      43,455,672

    Property and Equipment, net of
     accumulated depreciation
     of $6,126,393 and 3,674,605, respectively    45,156,739      23,573,680
    Land use rights, net of accumulated
     amortization of $1,031 and $0,
     respectively                                    124,028              --
    TOTAL ASSETS                                $100,943,938     $67,029,352

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
    Trade accounts payable                        $5,296,530      $2,957,413
    Other payables and accrued expenses            3,276,473       2,235,758
    Income and other taxes payable                 2,303,402       1,237,180
    Advances from customers                               --         119,923
    Payable to related parties                     1,064,348       3,349,814
    Total Current Liabilities                     11,940,753       9,900,088
    Shareholders' Equity
    Preferred stock - $0.00001 par value;
     10,000,000 shares authorized;
     no shares outstanding                                --              --
    Common stock - $0.00001 par value;
     100,000,000 shares authorized;
     54,202,036 and 54,095,103 shares
     outstanding, respectively                           541             540
    Additional paid-in capital                    21,616,469      21,824,121
    Statutory reserves                             5,642,419       3,301,379
    Retained earnings                             54,877,045      30,187,740
    Accumulated other comprehensive income         6,866,711       1,815,484
    Total Shareholders' Equity                    89,003,185      57,129,264
    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                     $100,943,938     $67,029,352



                        SHENGDATECH, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                         For the Years Ended December 31,
                                                  2007                2006
    Cash Flows from Operating
     Activities:
    Net income                             $27,030,345         $17,526,648
    Adjustments to reconcile net
     income to net cash provided
     by operating activities:
    Depreciation and amortization            2,128,980           1,031,387
    Loss on disposal of property,
     plant and equipment                         1,845              16,377
    Compensation paid with warrants                 --             153,619
    Changes in assets and
     liabilities:
    Accounts receivable                     (1,839,452)         (1,635,713)
    Other receivables                          144,500           4,040,220
    Advances to suppliers                  (17,767,908)           (588,722)
    Inventory                                  330,614            (611,842)
    Trade accounts payable                   2,306,124           1,468,602
    Other payables and accrued
     expenses                                  606,185             230,538
    Income and other taxes payable             942,034             (85,055)
    Advances from customers                   (123,077)            117,453
    Net Cash provided by Operating
     Activities                             13,760,190          21,663,512

    Cash Flows from Investing
     Activities:
    Purchase of property and
     equipment                             (19,090,018)        (15,365,898)
    Construction in progress                (2,206,133)            (92,020)
    Purchase of land use rights               (120,083)                 --
    Net Cash used in Investing
     Activities                            (21,416,234)        (15,457,918)

    Cash Flows from Financing
     Activities:
    Proceeds from issuance of common
     stock                                          --          13,969,714
    Changes in related party
     receivable / payable                   (2,415,904)          3,882,177
    Distribution to shareholder               (207,651)           (971,496)
    Other non-trade receivables                     --                  --
    Net Cash (used in) provided by
     Financing Activities                   (2,623,555)         16,880,395

    Effect of Exchange Rate Changes
     in Cash                                 1,962,025             848,853

    Net Change in Cash                      (8,317,574)         23,934,842
    Cash and Cash Equivalents at
     Beginning of Period                    34,684,142          10,749,300
    Cash and Cash Equivalents at End
     of Period                             $26,366,568         $34,684,142



    For more information, please contact:

     Crocker Coulson, President
     Leslie Richardson, Financial Writer
     CCG Elite Investor Relations
     Tel:   +1-646-213-1915
     Email: [email protected]


Source: ShengdaTech Inc.

What an unfortunate day to release earnings $0.62 to $0.65 EPS 2008 guidance.

Are there going to be any investors out there today with a stomach to buy