Archive for October, 2011

China Stocks Cheapest ‘I’ve Ever Seen’: Index Pioneer

Chinese stocks are extremely undervalued and U.S. investors should heavily increase their exposure to benefit from the emerging market’s long-term growth, says Burton Malkiel, author of the financial classic “A Random Walk Down Wall Street.”

The economist was referring to a slide showing several valuation metrics—from the price-to-earnings and price-to-book ratio—for the AlphaShares family of China indexes he created.“These are the most attractive multiples I’ve ever seen,” said Malkiel, 79, who pioneered the indexing investment philosophy, at a speech Wednesday for Guggenheim Funds at the New York Stock Exchange.

Malkiel helped forward the efficient market hypothesis—that prices of stocks immediately reflect all public information—with his 1974 classic now in its 10th edition. The professor of economics at Princeton argues that this hypothesis means investors are better off buying and holding a large basket of stocks through indexing, rather than relying on active fund management. He turned his sights to China about eight years ago.

As one would expect, Malkiel made clear that he wasn’t making a market timing call to buy China immediately, but rather saying that investors will be forced to increase their exposure to the world’s most populous nation over time as its economy transitions to more domestically focused and its currency begins to rival the dollar.

Right now, a typical institution holds just a 1.7 percent exposure to China, according to Malkiel, based on an average 10 percent exposure to emerging markets and China’s 17 percent chunk of the emerging markets pie.

Their overall exposure “should be at least 9 percent to better match China’s contribution to global GDP,” said Malkiel. “And that’s conservative. It really should be 12 percent.”

The economist, who is also chief investment officer at indexing firm AlphaShares, said the best way to capitalize on his China investment thesis is through Renminbi bonds or Chinese equities.

China’s stocks exploded higher this week after the government signaled there may be an end to monetary tightening. A European bailout plan on the table also soothed fears of slowing exports.

“These buildings may not be standing in five or 10 years,” said Jim Chanos, president of Kynikos Associates, in September. “You’re talking about an economic system where profits are not maximized for the largest economic actors. You’re talking about a history of horrible lending. You’re talking about a system in which the export-driven model hasn’t been changed by Western demand.”To be sure, not everyone is as enthusiastic as Malkiel. Detractors point to a build out in infrastructure to the center and West of the country that is taking place before a migration in the population. Not to mention rampant corruption and accounting practices.

But Malkiel, who remarked, “Chanos is just talking his book” at the speech, believes China is fostering faster growth by building the infrastructure ahead of the population migration and business growth. Behind his bullish thesis is the belief that domestic consumption will one day account for as much as 50 percent of the country’s GDP.

Sticking to his broad exposure roots, Malkiel has developed several indexes at AlphaShares that hold many more stocks than other Chinese indexes, which tend to be heavily weighted toward a few companies in the energy and finance sector.

Guggenheim, which sponsored his talk, offers exchange-traded funds that track the Malkiel indexes.

They include the Guggenheim China All-Cap [YAO  24.3699    -0.1701  (-0.69%)   ]China Small Cap [HAO  22.42    0.08  (+0.36%)   ] and the China Technology[CQQQ  24.69    -0.289  (-1.16%)   ].

What’s more, the firm has ETFs that give the regular investor direct exposure to Chinese bonds via the Yuan Bond [RMB  24.86  —  UNCH    ] and a direct hit on Malkiel’s currency appreciation thesis through the Chinese Renminbi Trust[FXCH  79.15  —  UNCH    ].

“Some people think the Yuan [CNY=X  6.357    -0.002  (-0.03%)   ] is as much as 20 percent undervalued,” said Jeff Kilburg, a trader with Treasury Curve who attended the speech. “If Malkiel is right and China continues to allow it to appreciate at least 5 percent a year, that will attract more and more investors. And the country’s bond market is in its infancy right now.”

Given the U.S. budget deficit and growing debt load, Malkiel believes that China’s currency could eventual rival the dollar. They desperately want the benefits that the U.S. has with being the world’s reserve currency and being able to print your way out of most problems.

“They dislike that immensely,” said Malkiel. “They call it ‘the exorbitant privilege.’”

By: John Melloy
Executive Producer, Fast Money & Strategy Session

John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team. Click here to see his full bio.

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Current Market Price for Mg min 99.8%


FOB China Port* Week 10/17/2011 to 10/23/2011 $3130 per ton
Ex Works Shanxi** Week 10/17/2011 to 10/23/2011 RMB 17,300 per ton

*FOB China Port – Based on ex-work basis, plus inland freight, misc port expenses,

and 10% export tariff.
**Ex Works Shanxi – Includes 17% VAT

 

 

Disclaimer: Amounts reflect the average weekly pricing obtained from third party sources and do not reflect IMG’s actual sales prices which may vary.


CDII Symbol

CDII

China Direct Industries, Inc.

China Direct Industries Completes Initial Rollout of UFIDA NC Enterprise Resource Planning (ERP) System

DEERFIELD BEACH, FL–(10/18/11) – China Direct Industries, Inc. (“China Direct Industries”) (NASDAQ:CDII), a U.S. based company that sources, produces and distributes industrial products in China and the Americas in two core business segments, announced today that it successfully completed implementation of its new UFIDA NC Enterprise Resource Planning (ERP) financial account software system at Shanxi Gu County Golden Magnesium Co., Ltd. (“Golden Magnesium”), its wholly owned subsidiary.

 

The NC ERP system is a comprehensive financial accounting software suite provided by UFIDA Software Co. Ltd., the largest enterprise resource management solution provider inChina. Once fully implemented, this web based ERP system will enable management to better manage its magnesium operations through a real-time centralized financial data management system.  The NC ERP system enables multi-currency financial data capability as well as multilingual user interfaces and reports functionality making it the ideal financial management tool for China Direct Industries as it builds its operations in theUnited States,China, andLatin America.

 

Management expects to continue the implementation of the system with its other magnesium subsidiaries in the coming months. Full implementation of the ERP system will help management improve corporate forecasting, overall accounting practices, and financial transparency as China Direct Industries grows its operations in the coming years.

 

Commenting on the successful ERP implementation at Golden Magnesium, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated “The system-wide rollout of this ERP system is critical for us as we move to complete our magnesium consolidation plan and successful implementation at Golden Magnesium is a significant milestone in this important process.  The NC ERP system will provide for greater financial transparency and  enable management to rapidly respond to changing business conditions to maximize overall financial performance throughout our organization. ”

 

 

About China Direct Industries, Inc

China Direct Industries, Inc. (NASDAQ:CDII), is a U.S. based company that sources, produces and distributes industrial commodities in China and the Americas and provides business and financial consulting services. Headquartered in Deerfield Beach, Florida with corporate offices in Shanghai, China Direct Industries’ unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about China Direct Industries, please visit http://www.cdii.net.

 

DISCLOSURE NOTICE:

 

In connection with the safe harbour provisions of the Private Securities Litigation Reform Act of 1995, China Direct Industries, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intends,” “plans,” “believes” and “projects”) may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations concerning our ability to complete implementation of the NC ERP software in our Magnesium segment and our ability to operate and maintain this system.

 

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Report on Form 10-K for the fiscal year ended September 30, 2010.

 

Contact Information:

 

ChinaDirect Industries, Inc.

Richard Galterio or Lillian Wong

Investor Relations

Phone: 1-877-China-57

Email: richard.galterio@cdii.net

lillian.wong@cdii.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

China Direct Industries to Present at the Sixth Annual Singular Research “Best of the Uncovereds” Conference October 26, 2011

DEERFIELD BEACH, Fla., Oct. 17, 2011 /PRNewswire/ — China Direct Industries, Inc. (“China Direct Industries”) (NASDAQ:CDII), a U.S. based company that sources, produces and distributes industrial products in China and the Americas in two core business segments, announced today that it will be presenting at the Singular Research sixth Annual “Best of The Uncovereds” Conference on Wednesday, October 26th at the Luxe Sunset Boulevard Hotel in Los Angeles.

Mr. Richard Galterio, Vice President of China Direct Industries, is scheduled to present at 11:30am ET (8:30am PT).  The Company will also provide a live webcast of this presentation at http://www.singularresearch.com.

During the remainder of the day, Mr. Galterio will meet with investors during a series of one-on-one breakout meetings at the conference. For more information on the conference or to schedule a one-on-one meeting, please contact Singular Research.

About China Direct Industries, Inc.

China Direct Industries, Inc. (NASDAQ:CDII – News), is a U.S. based company that sources, produces and distributes industrial commodities in China and the Americas and provides business and financial consulting services. Headquartered in Deerfield Beach, Florida with corporate offices in Shanghai, China Direct Industries’ unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about China Direct Industries, please visithttp://www.cdii.net.

About Singular Research/ http://www.singular-research.com/index.htm

Singular Research aims to be the most trusted supplier of independent, trusted, single-source research on small-to-micro cap companies to the small-to-medium sized Hedge Fund manager. We will provide quarterly updates for 20 to 50 companies and make recommendations. How do we strive to achieve our Mission/Goal: Find under or overvalued securities: Our goal is to provide initiation reports and quarterly updates for approximately 40 micro to small cap companies. In most cases, our analysts research companies that are not covered by any other firms.

 

  • We provide Honest Advice: Our Independent analysts have no financial interest in the stocks we cover. Analysts are compensated based on the accuracy of their research calls not through trading commissions or potential deal flow.
  • Cumulative Track Record: Since inception in August 2004 Singular Research is up 151.53% throughDecember 2010, compared to the S&P 500 at 13.90%

 

 

Contact Information:

China Direct Industries, Inc.
Richard Galterio or Lillian Wong
Investor Relations
Phone: 1-877-China-57
Email: richard.galterio@cdii.net
lillian.wong@cdii.net

Current Market Price for Mg min 99.8% | Week of 9/30/2011

Current Market Price for Mg min 99.8%

FOB China Port* Week 10/3/2011 to 10/9/2011 $3180 per ton
Ex Works Shanxi** Week 10/3/2011 to 10/9/2011 RMB 17,700 per ton

*FOB China Port – Based on ex-work basis, plus inland freight, misc port expenses,

and 10% export tariff.
**Ex Works Shanxi – Includes 17% VAT

Disclaimer: Amounts reflect the average weekly pricing obtained from third party sources and do not reflect IMG’s actual sales prices which may vary.


New CDII Director Added. Welcome! Mr. Kong Tung!

Kong Tung
DIRECTOR
Mr. Kong Tung, age 58,  is appointed a director of our company to hold office until the next annual meeting of shareholders and until his successor is duly elected and qualified or until his resignation or removal. The board of directors appointed Mr. Tung in connection with its approval of the acquisition of Beauty East, the recognition of the importance of our magnesium segment on our business, his experience in managing magnesium production facilities and the contributions he can make to our strategic direction. Mr. Tung has been the president and a member of the board of directors of Golden Magnesium since 2008.  Mr. Tung has served as the president of Shanxi Golden Trust Yiwei Magnesium Industry Corp. (“Golden Trust”) since 2003 which owns and operates a magnesium production facility in China.  Golden Trust is owned or controlled by Yuwei Huang, a member of our board of directors. Mr. Tung has been the president of Beauty East since 1995 and its chairman since 1999. Beauty East owns a 48% interest in Golden Magnesium. Mr. Tung graduated from Shanxi University, China in 1978 with a degree in engineering.