3SOF

CHID has been threating me quite well this week and last, I sold once at when it popped on news and picked it back up the next day at .53  so I have a tidy 50% gain in 4 days 

I saw that the chart was starting to look good so kept my shares, but I really could not have guessed it would be quite this good so soon.  The 3SOF timing is like magic to watch sometimes.

Also very glad to hear that David is still working the magic behind the scenes and encouraging this pick!  Looks like at the current rate a 250% annual profit is within reach for this blockbuster team, its quite mind boggling     

You guys rock!!! 

CHID is finally trading above $0.70 which was the last relative high, even with this significant advance, CHID is just 100% above its lows, and that's «peanuts» on the OTC market, considering this is an undiscovered gem, excepting a triple digit growth (Earnings, Revenues, etc) inside a hot market.

It's very difficult to design a trading plan for CHID, most likely the volatility will be there, huge advances followed by profit taking and consolidation periods, followed by even bigger advances is what we should expect here.
We should also expect this to be a multi-bag play, taking in consideration the high of July 2005, which was $1.81, the current fundamental figures and current expectations, this new move should at least have the same potential.

So our plan will be very simple for the moment:
- Hold CHID

Best regards !

I also missed this one yesterday – my fault, really – and I'll watch it today, hopefully to buy it substantially below yesterday's close.

Ramsburg had awesome timing with this one!!  Luckily I got to buy some yesterday and this morning. 

Wow CHID is taking off as I write this!   

Hi eliteG:

I missed chid, what a pity!

I wonder if it is still good to buy @ above $0.8? thanks!

Quote from: learnstock on April 26, 2006, 10:59:46 PM
Hi eliteG:

I missed chid, what a pity!

I wonder if it is still good to buy @ above $0.8? thanks!

Great question learnstock.. with an easy answer. 

CHID is incredible!  With awesome fundamentals and now finally I can say an awesome chart.  This volume rise is a textbook setup for bursting through $1(I think 2 is very doable).

So my answer is yes.. bigtime!

Its always great to buy a great stock as cheap as possible but sometimes you risk not having a position if you are afraid to pull the trigger.  As days go by CHID just increases its exposure.  In its discovery phase right now.  A well-timed news/pr piece and its gone.

I'm sure Ramsburg will have more to say in his update    Perfect pickup by him!   Glad to have this in the portfolio.

It's difficult to predict the short term developments of such an incredible play, CHID lost some momentum during yesterday's session, but that's completely normal taking in consideration the recent price advance.

I see some support on the $0.80 and $0.70 levels, volume is still high (and I expect it to get even higher), although its normal to watch some short periods of consolidation during the move.
The move itself should place CHID above its previous highs (most likely above $2.00), our job now it to ignore all short term «noise», and Hold CHID.

Best regards,

This is my very first OTCBB stock!  I bought some at 75 cents this morning on a limit order!    It made a correction to the 5-EMA and bounced higher (like GV is doing today, too).  I figured my safest bet for an OTC stock would be one that's in the 3SOF portfolio!

Leaira

Quote from: Leaira on April 27, 2006, 12:42:18 PM
This is my very first OTCBB stock! I bought some at 75 cents this morning on a limit order! It made a correction to the 5-EMA and bounced higher (like GV is doing today, too). I figured my safest bet for an OTC stock would be one that's in the 3SOF portfolio!

Leaira

Thats the way I feel too -- I don't ever touch these unless the 3SOF group does.  Got burned too much before.  I took today's opportunity to increase my position in both GV and CHID.   I usually start out with a 1/2 position in all their recommendations, and then try and finish the position on a pullback.  So far, that strategy has worked well for several of their recent picks.

Well, it looks like some people took the day off to sell some CHID

No big deal, I've just bought a few more shares to my private portfolio, I believe this price level near $0.70 will be the short term support, and I expect to see CHID above 1$ at any moment.

On Topic: Just found this crazy animation about CHID:
http://mm.dfilm.com/mm2s/mm_route.php?id=2912613

Enjoy

China Digital Communication Group CHID · News · Profile, announced today that an interview with President Yu Xi Sun by Wall Street Reporter is available at http://www.wallstreetreporter.com.

Sun, who also serves as the interim CEO, updates shareholders on the status of the company and answers questions in the interview.

Link:

http://www.wallstreetreporter.com/PDFTranscript/ChinaDigitalCommunicationGroup.pdf

Thanks La-onda,
Here it goes the full transcript:

QuoteTRANSCRIPT OF INTERVIEW
We are speaking today with Yu Xi Sun, President, Director and acting CEO of China Digital Communication Group. Ms. Sun, thank you for joining us today.

For our first question, please describe China Digital's Business

China Digital is one of the two largest lithium ion battery component makers in China. We make battery shells and caps for Chinese companies that produce finished batteries and electronic products. The batteries are used in millions of mobile phones, PDAs and other mobile electronic devices. We also manufacture and assemble complete lithium-ion batteries for small portable devices such as iPods although this is still a small part of our business.

This business operates through our wholly owned subsidiary E'Jenie, which is based in Shenzhen adjacent to Hong Kong. We acquired E'Jenie in late 2004 just after China Digital was formed by a group of Chinese investors.

In fiscal year 2005, exclusively from E'Jenie operations, we had revenue of $12.7 million and net income of $2.7 million with EPS of $0.05 per share.  We operate in a 65,000 square foot facility in Shenzhen.

The company has been profitable since it was founded in 2002 and now has a work force of 591 people with a capacity of 600,000 battery shells and caps a day.

What is the near term outlook for this business?

We believe the future of this business is very strong because we are gaining profitable market share in the world's fastest growing major market.

China's mobile electronics business including mobile phones and PDAs is exploding. The 2005 demand for lithium-ion batteries for mobile phones and portable electronic devices was 570 million units, roughly one-quarter of the global market. This was up significantly from 450 million units sold in China in 2004.

In addition, with 10% market share, we currently have the second largest market share of this highly fractured small battery component market and we fully expect our market share to continue growing substantially. So we are benefiting from growth of the market and growth in market share.

I also should mention that we benefit from a number of competitive advantages in terms of product quality, financial stability, an outstanding on time delivery record and a strong R&D team.

The company has announced the intention to buy two companies in the 3G communications space. Please explain the strategy.

We have agreements to purchase two companies that make high tech products for the rapidly emerging 3G telecommunications market in China. As you probably know, 3G refers to third generation communications devices representing the next technological evolution in mobile telephones and consumer electronics.

The first of these two companies is UPE Far East Limited, which owns Shenzhen Zhou Tong Power Supply Company, one of China's leading power suppliers to the domestic market and a pioneer of 3G power supply technologies and equipment.  In 2005, Zhou Tong had $5.4 million in revenue and reported net income of $1.85 million.

The second company we are acquiring is Galaxy View International, which owns Sono Digital, a leading supplier of 3G communications technology and equipment. Sono reported 2005 sales of $6 million and net profit of $2 million.

Both of these companies will be a great fit for China Digital and will not only help expand our company significantly but will also significantly expand our market opportunities. As the fastest growing major economy in the world, we believe China's demand for 3G communications as well as portable electronics will be enormous. China is certain to become the world's largest wireless society and user of portable electronic products.

Can you be more specific on how these businesses will impact the results of China Digital?  When do you expect to close them?

With the successful completion of the two acquisitions, we are now projecting revenue of $30 million and net income of $10 million or $0.13 per fully diluted share.  We expect to close both acquisitions during the summer.

As a Chinese company, why did you list on the OTCBB?

The American listing is valuable to us in China. It provides us with credibility in dealing with other Chinese companies and helps distinguish us from other companies that we are competing with.  It makes us more attractive to potential acquisition candidates and also exposes us to new sources of capital as we build our business in the rapidly growing Chinese market.

Please discuss your plan to purchase shares in the open market.

I have now announced my intention to purchase up to 1 million shares of the company in the open market between April 20 and June 20. This is because I believe that our stock does not currently reflect the true value of our company. We are trading at only 10 times trailing EPS.  Even at a multiple of 20 times our already reported $0.05 a share, this suggests we are substantially undervalued even without the acquisitions. You can make your own judgment of a proper valuation when we reach $.10 a share with an even higher run rate by year-end.

What are your plans for the future?

We have a number of new products in our development pipeline as we continue building the E'Jenie brand in China's secondary battery market. We have an aggressive acquisition strategy in the area of profitable telecommunications equipment manufacturers. And we continue to develop our international distribution channels that will enable us to expand sales outside of China.

Why should the investment community be interested in China Digital as a long-term investment?

China Digital is exceptionally well positioned to benefit from China's growth over the next 10 years or more. We will continue to build and strengthen the E'Jenie battery brand as we seek to become the price leader in international markets. We have already sold a small test order of batteries for iPods to a U.S. retail consumer electronics chain and we expect that to lead to new business.  In the meantime, China's market for rechargeables is worth $500 million and is growing at a 20% annual rate.

Through acquisitions, we will gradually diversify into the telecommunications industry, which had revenues of $121 billion in 2003 and is expected to grow 23% a year in the next five years.

Thank You.

Very interesting interview, especially this part:

QuoteThis is because I believe that our stock does not currently reflect the true value of our company. We are trading at only 10 times trailing EPS.  Even at a multiple of 20 times our already reported $0.05 a share, this suggests we are substantially undervalued even without the acquisitions. You can make your own judgment of a proper valuation when we reach $.10 a share with an even higher run rate by year-end.

At 3SOF we already made our own judgment... and we believe it's ridiculous to see CHID at present prices... This stock should be trading at least 2 or 3 bags above current prices.
The stock market sometimes has inefficiencies, this is clearly the case, the main reason was lack of public exposure, things have changed, and CHID is slowly entering on the market's radar, so its only a matter of time before the market corrects this «mistake».

Like said before, we expect volatility for the short term, but one clear direction for the mid-term.

Our trading Plan for the moment will be just: Hold CHID

Best regards,

CHID had a selling deep during Friday's morning, retesting the breakout zone but recovering quickly.

As stated, we expect a lot of volatility but therefore we'll be holding CHID as we think this stock is far bellow its fair price.

Our trading Plan for the moment will be just: Hold CHID

Best regards,

this one gaped up today at 0.78.....got this crap 0.745 then saw that this is going to close the gap around 0.69/0.70.....sold this 0.735.....got in again finally at 0.702 ....better sell and rebuy sometimes. I saved money  

Quote from: ket1390 on May 02, 2006, 12:38:16 PM
this one gaped up today at 0.78.....got this crap 0.745 then saw that this is going to close the gap around 0.69/0.70.....sold this 0.735.....got in again finally at 0.702 ....better sell and rebuy sometimes. I saved money  

Smart moves there ket1390.  CHID in particular has some strange price action and today is a great example.  There was no clear reason I could find that the stock opened higher that I could tell, though I am certainly not complaining.  Maybe the president was buying some of the shares he said he would in the PM?

Anyway, the valuation is so low that the stock is worth holding, but it sure drove me crazy for awhile before I got used to the way it moves.