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China New Energy- A Value Play?

China New Energy is a provided of natural gas to residential and commerical consumers in small to medium size cities in China. Currently they own three exclusive distrubtion networks to provide natural gas to the cities of Daishiqao, Acheng and Nandaihe, and also current construction project in Northern China city of Heilongjiang. The natural gas market is one of the industries that is currently experiencing heavy investment and growth in order to meet China's new green initiative and also to minimize the dependence of coal and oil.

A closer look at this company indicates-

- Selling at .13 cent a share,13M market cap. Trading less than .5X equity value.

- Net profit margins of 34.88% 

- Experienced management team consisting of John Kuhns. Founder of Catalyst Energy.

- Plans to list on US Major exchange, most likely Nasdaq listing early 2010.

- Of the 100 million shares issued,81% of shares outstanding owned by insider/ management.


For the value investor the above points are worth to keep this stock on your watch list or own. I am long on China New Energy as this is a high growth stock selling well below book value. 

Third quarter results for 2009 should be release next month in which I expect to exceed expectations.