As a strong player in the market of motoring China -- by this I mean providing motors to a wide variety of sectors -- Harbin Electric, Inc. (NASDAQ:HRBN) is a company with great long term potential.
Its specialty is linear motors and special electric motors, which it designs and markets not just to China, but also abroad. Linear motors are more efficient motors, and Harbin holds three patents on its core technology that helps give it an edge over competition. The company supplies motors for a variety of industries and services, including factory automation, conveyor systems, oilfield services, packaging equipment and mass transportation systems. Based in Harbin, China, it currently has 275 employees.
Although the company's fiscal year consensus EPS estimate was recently lowered from $0.89 to $0.74, I still think there is plenty of room for long-term growth. Based on the phenomenal industrial growth in China, which equates with a need for more motors in these key areas, along with the efficacy of HRBN's linear motors and its proprietary technology, as well as its push into new markets, I think Harbin will see excellent growth in the years to come.
Only recently listed on the NASDAQ exchange, Harbin also recently announced the formation of a new subsidiary in the U.S. that focuses on expanding the company into the automation controllers market. This along with its motor technology could allow it to lead the industrial motor marketplace. I think HRBN shows great potential within the next two to three years.
Type of stock: Cyclical stock in the industrial materials sector, Harbin Electric supplies linear motors and special electric motors to a wide variety of industries in China as well as abroad.
Price target: Harbin is a stock to buy and hang onto over the long-term (I emphasize long-term). Currently trading toward the higher end of its 52-week range, at $14.67, I'd feel comfortable buying Harbin now and socking it away in the portfolio for a few years. Within 24 months, you should see a double.
HRBN 1-yr chart: