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China Fire & Security updates and scores a big order

February 8th, 2010 · 1 Comment

A company growing at almost triple digits, no debt, and a 2010 p/e of.. 8. Is this real? Yes, even after today’s 25% rise…

Our timing in advising to buy these shares was a little unfortunate (just before China embarked on some monetary tightening and the market selling off on that scare), but fundamentally, this company is firing out of all cylinders..

Just consider this:

China Fire Provides Business Updates and New 2010 Guidance
– Backlog currently totals $154 million –
– Forecasts 2010 revenue will grow 66%-78% YoY to $135-145 million –
– Forecasts 2010 net income will grow 89%-105% YoY to $47-49 million –
– Forecasts 2010 EPS will grow 88%-94% YoY to $1.65-$1.70 –

For the details, click the link. They also scored a big order, exactly in the retrofitting of Iron and Steel plants we suggested they have a great opportunity:

China Fire Announces Record Breakthrough Contract Win of $92 Million
– Huge Potential in Retrofitting Projects from Iron and Steel Industry –
(For details click the link)

So earnings will basically double to $1.65-$1.70 per share, which gives them a p/e of way under 10 for a company growing at almost triple digit rate. We think we told you many of these Chinese smallcaps are cheap, didn’t we? In the same article we also told you there is little reason to think that this company won’t provide solid growth for years to come. The company also has no debt. Here the chart from this morning before opening (the shares are up 17% on the open, no wonder).

We have no doubt that you just have to sit out the present market turbulance on these shares. Cheap shares have just become that much cheaper and there can be little doubt this company is a very nice growth stock for years to come.

Tags: CFSG

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