PRLog (Press Release) - Sep 01, 2011 - Ray Dirks Research Recommends Asia Carbon Industries – ACRB (OTC.OB) at $0.75 Per Share for Substantial Capital Appreciation.
August 31, 2011
RAY DI rc helicopter market place RKS Research is recommending purchase of the common stock of Asia Carbon Industries, Inc., which currently trades on light volume in the over-the-counter bulletin board market at $0.75 per share, for its very significant capital appreciation potential over the Short Term (One Year) and over the Intermediate Term (Three Years).
Based on the Company's direct participation in China's thriving automotive market, Ray Dirks and his team of security analysts and money managers believe Asia Carbon Industries will triple by August 1, 2012 to around $2.25 per share, and again by 2014, if the Company is successful in continuing to access foreign capital to fund its expansion, its funding objectives, to approximately $4.50 per share.
Asia Carbon Industries is a very profitable, rapidly-growing producer of high quality carbon black products under the brand name "Great Double Star". Carbon black is a powder derived from the controlled combustion of coal tar or residual oil feedstock and has a variety of uses; however the vast majority of carbon black is used by the tire industry, where it can improve rubber's strength, wear resistance, and life span, thus lowering the overall cost of tire products.
Demand for Asia Carbon's products has been strong and growth is expected to continue in line with China's automotive sector, where domestic car sales are forecast to reach upwards of 20 million units annually by 2015.
The Company was founded in December, 2003 in Shanxi, China's highest coal-producing province. With virtually unlimited access to a local source of the necessary raw materials, since inception, Asia Carbon management capitalized on its location, continually adding to capacity and broadening Asia Carbon's product line.
The Company currently manufactures four types of carbon black, all of which are used by tire manufacturers. The Company's main product N220,is a soft carbon black which has the flexibility necessary for the production of automobile tire inner tubes and hoses.
Initially Asia Carbon manufactured carbon black using only conventional "dry" processing; however in the fourth quarter of 2010, the Companycompleted its first wet production line. Sales of the Company's first wet product — N220-W — had a significant impact on the Company's financial performance, as the state-of-the-artfacility produces a higher quality product, enabling Asia Carbon to charge a premium price and thereby generate superior profit margins.
In 2010 the Company also initiated the sale of naphthalene oil, a by-product of the carbon black production process. Revenues generated from naphthalene have had a positive impact on Asia Carbon's financial performance, and this trend is expected to continue as the Company increases its production levels.
Asia Carbon Industries reported sales for the six months ended June 30, 2011 of $26,942,388, an increase of $15,792,436, or 142%, compared to $11,149,952 for the six months ended June 30, 2010. This very strong sales increase was primarily attributed to the expansion in sales of Asia Carbon's new products: N220-W, launched in November, 2010, and naphthalene oil, which began selling in July, 2010. Together, these two products accounted for 50% of total revenue for the first half and 85% of the increas Kenmore Bisque 15 inchi e in sales in the six months ended June 30, 2011 as compared to the same period for the prior year.
Net income was $4,086,913 for the six months ended June 30, 2011, an increase of $3,391,717, or 488%, compared to $695,196 in the same period of 2010. Again, the increase in net income was the result of the contribution of N220-W and naphthalene oil
Asia Carbon reported earnings per share for the first half of 2011 of $0.08 compared to $0.01 for the same period of 2010. Weighted average shares outstanding in the first six months of 2011 were 50,608,077, a 9% increase, as compared to 46,382,104 for the same period in 2010.
Data recently released from the National Bureau of Statistics of China show that the number of registered automobiles for civilian use in China reached almost 91 million units at the end of 2010, up over 19% from a year earlier. The tire demand in the aftermarket is also on healthy ground. Vehicle owners replaced about 100 million tires in 2009, which represented about 11 % of global tire sales.The demand for replacement tires is about twice that for Original Equipment – OEM – tires, accounting for more than two-thirds of the domestic tire market.
Ray Dirks Research believes that Asia Carbon Industries is ideally positioned to benefit from these powerful trends, which are likely to continue for at least the next 10 years, as an estimated 89% of its sales are to local Chinese tire manufacturers and related companies.
The Company has initiated an aggressive expansion strategy to capitalize on the forecast for growth in demand for its products.Near term, the Company is planning the addition of two more state-of-the-art wet granulation production facilities, and the construction of a small power plant which will enable Asia Carbon to use the coke oven gas byproduct of production to generate the energy necessary to run a portion of its operation. Longer term, management intends to build capacity both organically and through acquisition of smaller carbon black manufacturers.
RAY DIRKS Research thinks that for all of the reasons cited in the report above, sophisticated investors, including Institutional Investors, Hedge Funds, High-Net-Worth Individual Investors, and Fiduciaries, should consider taking a long position in Asia Carbon Industries, Inc. (ACRB) for its significant capital appreciation potential.
Some of the key numbers regarding Asia Carbon Industries, Inc. are shown below for the purpose of analyzing the common stock of ACRB
Price as of August 30, 2011 – $0.75Shares Outstanding – 50,608,077Market Capitalization $37, trash bins 956,058Average Daily Volume – 350 sharesAnnualized Revenue Rate – $54,000,000Earnings Per Share – Trailing 12 helicop ter technology Months – $0.14Earnings Per Share – Q1 and Q2, 2011 – $0.08Earnings Per Share – Estimated for 2011 $0.20Target Price August 1, 2012 $2.25Target Price August 1, 2014 $4.50
Readers of this Article are encouraged to contact Ray Dirks by e-mailing rdirks@nyc.rr.com
For the complete posting, please visit http://www.cpreports.com/?p=1334
Disclosure:
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