bottom fishing's  Instablog

bottom fishing
Send Message
individual investor who loves to find bargains with large potentials but for some reasons undervalued, believes in financials but at the same time believes in common sense and big picture.
  • potential buyer of CHNG 2 comments
    Jun 10, 2011 10:37 AM | about stocks: CHNG

    Kunlun Energy ( just announced a plan to invest CNY 10 bln to build gas stations across china in a year. This can be bullish for CHNG, a pontential acquisition target. GS is also upbeat about CNG/LNG scetor in China as the developement is still at very early stage and potential is huge. Kunlun's plan to build 350 CNG stations over next few years leaves a lot of room as to how they are going to achieve its goal. People still remember how PetroChina and SinoPepec came on top of many front-runners to become the dominant force in gas station networks in China. It is just a matter of time for small operators to be acquired and integrated into their networks. But the good news is they are generous in their bids after all the money is not out of individual's pockets and monopoly allows them to charge higher prices to make them better off. If this scenario plays out, based on the latest financials available, CHNG is worth at least $7.5 (vs $2.56 now) per share without figuring into future growth.

    Stocks: CHNG
Back To bottom fishing's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (2)
Track new comments
  • bottom fishing
    , contributor
    Comments (18) | Send Message
    Author’s reply » The proposed $4.25 per share by CEO to take CHNG private is ridiculously low vs its book value over $8 per share. There is little doubt about the CEO trying to take advantage of the recent selloff of Chinese small caps in US markets. To review the fundamentals of CHNG, a good posting to read is the one written by Diego Stentardo in Sept 2009. The factors mentioned there are still relavant if not more bullish in my opinion. According to a recent research paper at HK, the business of distribution of natrual gas in China has three powerful growth drivers: supportive government policy, increasing demand and upcoming pricing reform. The market is expected to grow 20% per year and price is likely to double over the next five years. If the CEO wants to be considered serious about his bidding, the bid should be at least no lower than the firm's book value. Otherwise, objection from other shareholders can be anticipated.
    5 Jul 2011, 12:22 PM Reply Like
  • bottom fishing
    , contributor
    Comments (18) | Send Message
    Author’s reply » CHNG is dirty cheap at current level unless all its 38 gas stations, LNG project and CNG pipelines are not existing as well as its license to run NG business. I can sense something is going on behind this cheapness as the price is made low artificially. It wont last long before the price goes up sharply, the downside is very limited. Smart investors should gradually chip in, the price should go up once the negative impact from bad publicity starts waning.
    23 Aug 2011, 01:36 PM Reply Like
Full index of posts »
Latest Followers

Latest Comments

Most Commented
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.