Cabeza Howe

CYXI: A Growth Stock Trading Below Book Value

Robert,

I certainly have noticed the significant inventory buildup in the two most recent quarters. It certainly does not feel pleasant. But note that 69% of the inventory was on raw material build up (as of 3/31/08). When you look at the recent crop price super-inflation, it is not hard to understand why companies are stocking up on these raw materials. Otherwise, they might be facing declining gross margin going forward if crop prices keep on rising. Current inventory takes roughly half a year to move through, which might still be manageable. Also if you just look at the finished goods, Q1 (53 days turnover) had a slight improvement compared to Q4 (59 days). So the products still appear to sell fine.

That said, the inventory deserves close watch in the following quarters. On the other hand, the current price level might have built in some discount for certain risks.

CYXI: A Growth Stock Trading Below Book Value

Rick,

Thanks for the comments. The PIPE investors themselves are all underwater now, since their bets were at $1 a share. Their warrant exercise prices are $1.5 and $2. So the overhang is not a threat at this price level. Furthermore, those investors cannot sell their shares until the share registration (last filed in April) is declared effective by SEC.

Regarding the CFO appointment, that indeed should have addressed one of CYXI's weak spots. If the CFO is good and can communicate the company's vision and business strategy effectively to U.S. investors, we small fries will soon be rewarded.

Happy investing and best regards.

Cabeza

CYXI: A Growth Stock Trading Below Book Value

The difference between CYXI and CXTI is day and night, or haven vs. hell.

CXTI has got virtually zero media coverage in China, leaving no paper trail to indicate its legitimacy.

In the case of China Yingxia, Mrs. Jiao herself has won numerous provincial and national awards and recognitions. Perhaps the top recognition she has ever won was the 2004 Top Ten Business Talents, which put her name side by side with the likes of Mr. Liu Chuanzhi (former Lenovo Chairman/CEO) and Mr. Zhang Enzhao (former China Construction Bank Chairman).

Mrs. Jiao is well followed by the media. She is one of the role models of the Chinese woman entrepreneurs. You will also be able to follow previous media reports to reconstruct CYXI's growth history.

On the CYXI-Sanitarium agreement, it was signed on the well-known Harbin Fair a week or so ago. The event/agreement was reported by many official organizations, like provincial and national Green Food organizations and agricultural departments.

The link I gave above, Life Daily, is an official publication of Heilongjiang Province's Heilongjiang Daily Group Limited.

CYXI is simply one of the few Chinese OTC companies that you can invest with piece of mind knowing there is no likelihood of a fraud.