China Tracker - Details for China Gerui Advanced Materials (CHOP)


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 China Gerui Advanced Materials
Shares Outstanding (MRQ): 48.39 mill 
New Shares / Dilution (TTM): 6.43 mill15.33% 
Cash (MRQ): 119.48 mill0.00%
Account Receivables (MRQ): 4.09 mill0.00%
Account Receivables (Q/Q): -0.09 mill  
Long-Term Debt (MRQ): NO DEBT
Revenue Growth (Q/Q): 6.92% 
Revenue Growth (Y/Y): 15.55% 
Net Income Growth (Q/Q): -6.55% 
Net Income Growth (Y/Y): -0.52%
EPS Growth (Y/Y): -13.74%
Net Margin (Q/Q): 17.1% (19.6%)-2.50% 
Net Margin (Y/Y): 17.1% (19.9%)-2.80% 
EPS | P/E (2 MRQ Projection): $0.970.00 
CFPS | P/CF (2 MRQ Projection): $1.080.00 
Price/Sales (2 MRQ Projection): 0.00
Price/Book (MRQ): 0.00 
Auditor: UHY Vocation 
 
 Forward Projections (Fiscal Year)
EPS | P/E (Estimates updated 2011-05-11): $1.220.00 
 Basic Facts and History (show more)
Reporting Type: Foreign Company (20-F Filings) 
Going Public: SPAC on 2009-03-17 
Uplisting to Senior Exchange: on 2009-11-10 at $5.00 (-100.00% since Uplisting)

 Business Outlook

China Gerui Advanced Materials clarified the outlook provided in yesterday's earnings press release: For fiscal year 2011, China Gerui expects revenue of between $330 million and $345 million and gross profit of between $115 million and $120 million. On a GAAP basis, the Company expects fiscal year 2011 net income of between $65 million and $70 million and diluted earnings per share of between $1.10 and $1.15. On a non-GAAP basis, the Company expects fiscal year 2011 adjusted net income of between $70 million and $75 million and diluted earnings per share of between $1.20 and $1.25. Adjusted net income and adjusted diluted earnings per share exclude one-time warrant exercise expenses incurred in the first quarter of 2011.

(Source: PR Newswire, 2011-05-11)

For fiscal year 2011, China Gerui expects revenue of between $330 million and $345 million, gross profit of between $115 million and $120 million, adjusted net income of between $65 million and $70 million, adjusted diluted earnings per share of between $1.10 and $1.15. Adjusted net income and adjusted diluted earnings per share exclude one-time warrant exercise expenses incurred in the first quarter of 2011.

(Source: PR Newswire, 2011-05-10)

For fiscal year 2011, consistent with the Company's previous guidance, China Gerui expects revenue of between $330 million and $345 million, gross profit of between $115 million and $120 million, net income of between $70 million and $75 million, diluted earnings per share between $1.20 and $1.25, and capital expenditures to complete its previously announced Phase II of expansion plan of between $12 million and $15 million.

(Source: PR Newswire, 2011-04-07)

    see all Business Outlook notes


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 Analyst Coverage (show less)
2011-06-01TripointInitiationBuy$8.00
2011-05-11Brean MurrayReiterationBuy$10.00
 

Overall, results were in line as modest expectations in Q1 are setting up for a strong ramp in the back half of the year with utilization accelerating following the May/June timing for new production commencement. However, costs appear to also be above our original estimates, with one-time interest related to a new facility and higher raw material costs. This drove full year earnings revisions and the switch to non-GAAP adjusted EPS reporting. While the 2011 earnings revision would imply a potential target price reduction, China Gerui's incremental cash position, north of $5 per share, and deep valuation discount provides sufficient cushion for downside to valuation expectations, in our view. We maintain our Buy rating and target of $10, which implies a forward price to earnings multiple of 3x our 2012 estimate plus net cash of $5.17 per share. 

2011-05-10Rodman & RenshawReiterationOutperform$11.00
 

We have tweaked our model to reflect the updated 1Q11 financials and revised outlook. For 2Q11, we now estimate revenue, gross profit, and non-GAAP net income will reach $84.9 million, $28.0 million, and $17.0 million, respectively. The respective figures for full year 2011 are: $339.4 million, $114.1 million, and $69.1. We are reiterating our Market Outperforming rating on the shares of Gerui as well as our $11 price target. Our price target of $11 is based on Gerui shares trading at 9x our 2011 EPS estimate of $1.22, representing a PEG ratio of 0.4.

2011-04-26Brean MurrayReiterationBuy$10.00
 

We maintain our Buy rating and target price of $10, which implies a forward price-to-earnings multiple of 5x our 2011 EPS estimate plus cash. This also implies an EV/EBITDA multiple of 2.4x our 2011 estimate. Our target forward PE multiple, which suggests 100% upside from current levels, is still at a steep discount to its peers who are trading at an average forward PE of 12x. This target multiple, in our opinion, is more justified for a company that is estimated to grow revenue 32% and earnings by 22% in 2011.

2011-04-21Global HunterReiterationBuy$10.00
 

China Gerui filed its FY2010 annual report (Form 20-F) on April 19, with results in line with its original expectations discussed during the company’s earnings conference call on April 7. As expected, audited financial results were the same as the unaudited numbers previously announced by the company and there were no restatements or adjustments to any historical results. Ernst & Young's review of CHOP’s internal controls has been completed and determined to be “effective” with no material weaknesses. We continue to view CHOP as a solid investment opportunity with a simple business model, earnings that are backed by cash flows and results that are audited by a top 20 PCAOB-ranked auditor in UHY. Notably, the company may upgrade to a Big 4 during the current fiscal year. The stock currently trades at theoretical liquidation value based on net tangible assets, 4x 2011 P/E and less than 2x 2011 EV/EBITDA multiples. As a result, we reiterate our Buy rating and $10 price target.

CHOP is currently followed by 7 analysts. 6 give the stock a positive rating, 1 rate it neutral and 0 give it a negative rating. The average price target is 9.75.


    see all Analyst Ratings

 Recent Financings
2010-10-29Filing$100.00 mill--
2009-11-10Priced$24.00 mill4.80 mill shares$5.00

 Investor Presentations
2010-05-11 (HTML)   VIEW
CHOP
Steel
SCORE
-2
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SAFETY/RISK SCORE
MODERATE RISK
DETAILS: Safety/Risk Model for CHOP
Current Price:  n/a
F10k Day (2009-11-02): -100.00%$7.00
2009 Close: -100.00%$5.60
2010 Close: -100.00%$5.88
2011 Close: -100.00%$3.35
High (2012-04-05): -100.00%$3.66
Low (2012-10-19): -100.00%$1.50
Exchange:
Market Capitalization: n/a
Total Shares: 48.39 mill
Float: n/a
Avg Volume: 316.20 k
Short Interest: 495.20 k
Short Ratio: 1.81%1.6 d
Last Quarter: 2010-12-31
Revenue (MRQ): 66.14 mill
Net Income (MRQ): 11.34 mill
Op. Cash Flow (MRQ): 17.50 mill
all financial data provided without warranty