China Direct Inc. (NASDAQ: CDS), a diversified management and advisory services organization headquartered in the United States, owns and consults business entities operating in the People’s Republic of China. The company’s Management Services division acquires controlling interest in Chinese businesses, creating a platform to expand business opportunities globally while accessing the U.S. capital markets. China Direct’s Advisory Services division provides comprehensive advisory and consulting services to Chinese business entities seeking to access the U.S. capital markets. For further information, visit the Company’s web site at www.chinadirectinc.com.
China Direct (CDS) is a provider of management advice, investment capital, business development services, strategic planning, macroeconomic industry analysis, and financial management services in China. The company also offers business advisory and consulting services. China Direct is, at its core, a play on basic materials, which plays right into China’s massive infrastructure boom. The company’s three main businesses involve magnesium, basic materials and green technology. China Direct helps small and medium-sized Chinese companies access capital markets in the United States either through acquiring U.S.-based companies or going public on U.S.-based exchanges.
For fiscal 2007, the Florida-based company reported profits of $11.8 million, or 67 cents a share, on sales of $174 million. In the second quarter of this year, China Direct reported record results, highlighted by net income of $7.5million, or 26 cents a share, on sales of $76.2 million. The company is projecting profits of $26 million, or $1 share, on sales of $320 million for 2008. Management reaffirmed those estimates earlier this month. Three analysts follow China Direct, one with a rating of “strong buy,” the other two with “buy” ratings. Last Friday, the company announced a $2.5 million stock repurchase program.
While magnesium continues to be a significant part of China Direct’s business and global commodity prices continue to swoon, the company says it is well-positioned to endure such price volatility and that it expects magnesium prices to stabilize in the near future. About 47 percent of China Direct’s shares are held by insiders with 36 institutions holding another eight percent. Mutual funds holding China Direct shares include Marshall Small Cap Growth, CornerCap Contrarian, First American Small Cap Index and Northern Small Cap Index.
China Direct shares closed Monday at $4.44. They have traded between $3.80 and $12.95 over the past 52 weeks. China Direct has a market value of about $104.4 million and price-to-earnings ratio of 7.22. The company has nearly $32 million in cash on hand and little debt. China Direct also enjoys a favored relationship of China’s currency, the yuan, to the U.S. dollar.
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China Direct is a business management and advisory services company operating in those two categories in both the U.S. and the People’s Republic of China (PRC). In cooperation with its U.S. parent company, China Direct works to facilitate both North American investment in Chinese business and foreign business entry into the complex and often confusing regulatory aspects of Chinese commerce.
China Direct is the result of a recognized market need for both investment capital and management acumen for smaller businesses, defined as businesses with annual revenues of under $100 million. For these businesses, China Direct provides a support base from which these companies can negotiate the Chinese business scene successfully to mature into serious contenders.
The management services division works by acquiring a controlling interest in businesses. These then become portfolio companies, and are nurtured by an array of business resources to speed their efficiency and growth. These business resources can include, but are not limited to, management advice, investment capital, business development services and financial management.
The advisory services division provides consulting services to both Chinese businesses wanting to enter US capital markets, and North American businesses looking for opportunities in the PRC. Because of its diversified mix of Chinese and American business professionals, China Direct can meet the individual needs of every client by creatively tailoring a package to suit every need and venue. Trading on the American Stock Exchange under the symbol CDS, China Direct, a public company, has offices in both the US and Canada, and has been operating successfully since 2001 to provide a series of advantages critical to the success of China’s business entities.
Demonstrated success in a number of cross-border transactions verifies the company’s expertise with both the cultural and legal challenges of Chinese commerce and the intricacies of U.S. capital markets – a success inevitably leading to greater shareholder value and future referrals by satisfied clients.
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China Direct, Inc. (AMEX: CDS), through its subsidiaries, operates as a management and consulting company in China. It’s a long journey from its home base in Boca Raton, Florida, but sometimes the grass is greener on the other side. Recognizing a growing number of Chinese businesses looking to plug into the United States capital markets, the company offers itself as a marketing resource for private companies in China. China Direct is also involved in the sale and distribution of industrial grade synthetic chemicals.
China Direct distributes products to industrial manufacturing and trading companies such as property developers, textile factories and pharmaceutical factories in eastern China. The products include paint, glue, plastics, textiles, leather goods and medical products. China’s growing industrial sector calls for magnesium by-products such as magnesium powder, magnesium scrap, magnesium alloy and more – all of which China Direct can deliver.
The company recently announced it has entered into a definitive agreement in which it will acquire 100% of Jixiang Mining. This acquisition will add mining, processing and distributing of concentrated zinc and lead to China Direct’s already extensive profile. The emerging company will be called CDI Jixiang Metal Industry. According to the statement, China is the largest producer and consumer of zinc and lead in the world.
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