Chinese generic pharmaceutical company. On pace to earn 0.20 in FY06, trades at 1.45 currently. Q4 should be its strongest quarter, and management has indicated they can grow sales and earnings next year at +30%.

Organic fertilizer company located in China. Has worked to increase capacity this year, which is a transition year for them. By year end, they should have 160% additional capacity for producing their organic fertilizer. Sales growth could be explosive next year, but I'm a little concerned about margins in the first half of the year as they ramp up. TTM PE of less than 10x

China Expert Technology. Provides e-govt solutions to cities in China. Huge backlog, long A/R cycle that leads to periods where cash flow looks good (as it is now) and bad (when projects are in the beginning phase.) Earned 0.15 in the recently completed quarter, but one has to adjust for non-cash charges/benefits due to embedded derivative accounting. Company also has been issuing stock to "consultants" that help get them project wins; this has conserved cash, but killed the income statement. Now that they have more cash, they should be better able to pay this expense in cash not stock in future quarters. That's good for current shareholders.

Completely unknown handset design company in China, D/B/A "Sunplus" but trades under the name T-Bay Holdings. They have done a pretty decent job of managing their cash flow and sales growth, while keeping margins high and eps strong. Closest match that most might know is CNTF, although Sunplus's technical expertise isn't as great. This has actually helped them, as CNTF's current problems stem from the transition to 3G. TBay/Sunplus has a trailing eps of 0.39 fd, and trades at 1.80. I think they can earn 0.37 - 0.44 this year.

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China Security and Surveillance. A play on rapid growth and demand for security systems in China. There are multiple growth catalysts to drive revenue growth for this company in the future, including the 2008 Olympics and 2010 Worlds Fair. In addition, several ordinances have been passed by the Chinese government which require security surveillance systems to be installed in: (1) 660 cities throughout China for street surveillance; (2) all entertainment locations starting from March 1, 2006; (3) all Justice Departments and Courts; and (4) all coal mines in China (currently estimated at 28,000) by the end of 2008. Just released a stellar Q3 report on 11/15, along with CC. Have a listen and I think you'll be impressed by the management and positioning of the company to become a leader in this rapidly growing sector in China. Trading at < 10x my estimate of 0.90 fd eps for FY06.

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