pwu8

China Natural Gas: There's Still Time to Catch Some Growth

Obviously CHNG has had hiccups in Q1 and maybe in Q2 in building new CNG filling stations. The original expansion plans thus were delayed, by a quarter or two. We would otherwise be looking at $5 in May, $8 in Aug, $10-12 before end of 07, and $20 range in 08 when they launch LNG productions.

The reason for the delay is UNKONWN, which is the frustrating part of investing in CHNG. It could be a licensing dealing with local government officials in He’nan province – outside of CHNG’s home territory. That would not be uncommon for China today. CHNG may have to learn how to pay and pave their way into regions beyond Shaan’xi province.

Besides the execution, two top obstacles for CHNG so far were (1) the lack of PR and the US representative, and (2) lack of investors (there were less than 100 stock owners not so long ago) and the trading volume. CHNG is addressing both issues by hiring a PR firm in the US, and to list the stocks also in a Chinese exchange, both by end of 07. I’m encouraged.

~p

China Natural Gas: There's Still Time to Catch Some Growth

CHNG has three lines of business:

- residential gas sales for newly constructed building
- whole sale of gas and compressed gas to gas filling stations
- company onwed compressed gas filling stations (for viehcles)

The company stated it's the last that's going to drive the company's high growth. The company has 14 stations operational today and is planning to have 20 under construction by end of 07. Each new station can potentially add $0.02 to the eps - you can do the rest of calculations from here.

~p