Back in CHCG.OB
May 30th, 2007 by Cameron FousCHCG had some rough behavior after its EC and 07′ guidance were released on may 14th and 16th respectively. I still like the companies huge growth potential here and it looks like its a great time to pick up some cheaper shares as price made a great looking hammer candle at double support(horizontal and ascending) within the ascending channel. Fundamentals here still look great and so does future outlook with a very attractive low forward P/E of 7.36, clean balance sheet, strong growth moving forward, and is expected to be listed on a major exchange towards the end of this year. I’m still a believer here and this chart looks like its ready for another go, lets keep our stops tight though near this support level 
Buying CHCG tomorrow.
Monday May 14, 4:30 pm ET
ZHEJIANG PROVINCE, China, May 14 /PRNewswire-FirstCall/ — China 3C Group (OTC Bulletin Board: CHCG - News), a rapidly growing retailer and distributor of consumer and business products in China, announced today that revenue for the first quarter of 2007 was $84.5 million versus $13.4 million in the comparable quarter last year, an increase of 530%. Net income for the quarter was $6.5 million, or $0.12 per basic and diluted share, up 607% from $913,548 or $0.02 earnings per share for the same quarter last year.
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The company realized $13.9 million in gross profit for the quarter, up 621% from $1.9 million in gross profit for the same quarter last year. The increase in revenue and net income was due to increased sales and the assimilation of the acquisitions made during fiscal year 2006.
The company generated $2.6 million in cash from operating activities during the quarter and had $9.1 million in cash at the end of the first quarter.
China 3C Group’s Chief Executive Officer, Zhenggang Wang, said, “We are pleased to report another robust quarter with strong sequential and year over year growth. Our revenues experienced a sharp increase, buoyed by a rise in sales and our acquisitions last year. On a sequential basis, revenues increased 33% to $84.5 million from $63.6 million in the fourth quarter of 2006. First quarter 2007 net income also increased 33% on a sequential basis to $6.5 million, or $0.12 earnings per share from $4.9 million, or $0.09 earnings per share in the fourth quarter of 2006.
“Cost of sales as a percentage of revenues decreased to 83% in this first quarter of 2007 from 85% during the first quarter of 2006. Gross profit margin was up over 2% this quarter to 16.5% compared to 14.4% in the comparable quarter last year. Looking ahead, we expect continued growth for our company as we further expand our product offerings, such as with our recently announced agreements with Galanz Group, one of the largest electronics manufacturer in the world, and Huipu Electronic Co., Ltd. (HPC), a leading manufacturer of LCD and plasma TV sets, LCD and CRT computer monitors.”
Wednesday May 16, 1:18 pm ET
ZHEJIANG PROVINCE, China, May 16 /PRNewswire-FirstCall/ — China 3C Group (OTC Bulletin Board: CHCG - News), a rapidly growing retailer and distributor of consumer and business products in China, announced that the company is providing additional information regarding the company’s previously released first quarter fiscal year 2007 results.
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Zhenggang Wang, CEO of China 3C Group said, “We expect to record revenue in the range of $360 million to $380 million and net income of $27.0 million to $28.5 million for the fiscal year ending December 31, 2007. Earnings per share are expected to range between $0.50 and $0.54 per diluted share. As with all guidance, these statements are forward-looking and our actual results may differ materially. We also reserve the right to adjust this guidance at any time as a result of acquisitions or other strategic initiatives we may pursue.
“We are also reiterating our previous guidance regarding store openings. We expect to open 1,200 stores by the end of 2007 and anticipate opening 4,000 total stores by the end of 2010, at which time we believe we will be realizing annual revenues of $1 billion. We will also be issuing first quarter 2007 comparable-store sales data under a separate release in the next few weeks.
“The company intends to be listed on a major U.S. exchange by the end of 2007. We will update the investment community with the status of our listing as more information becomes available.”
Wang added, “We are pleased with our financial and operational results during the first quarter. We thank the members of the investment community who listened to our conference call and look forward to keeping all of our shareholders updated on our progress during 2007 and beyond.”
