Fuqi International, Inc. (NASDAQ: FUQI) posted a much stronger quarter than expected and traded up at the end of last week. Fuqi designs, develops, promotes, and sells precious metal jewelry in the Peoples Republic of China. By the look of the company and with what may be coming in China, this is one which traders and investors may want to take a closer look. We covered this last night in our weekly "10 Stocks Under $10" subscriber letter which was sent out to subscribers via email:
Revenue for the third quarter of 2008 increased 159% to $93.7 millionfrom $36.2 million in the third quarter of 2007, due to increases insales volumes and selling prices in the wholesale business.
For the full year 2008, Fuqi raised its revenue guidance, netincome and diluted earnings per share estimates. It now expectsrevenue of approximately $345 million to $350 million. Fuqi said the largeChinese government stimulus package would help bolster future results.
While the economy in the world’s most populated country may be slowing,the middle and upper classes should not suffer a great deal if the $600billion in rescue funds are used wisely. One of the centralgovernment’s primary goals it to make sure that consumer spendingwithin China’s borders continues to be strong.
At $6.62, Fugi still only trades at about 60% of its 52-week high of $11.95. That does not make sense. Its market cap is listed as roughly $140 million.
It may well have much further to run.
Douglas A McIntyre
November 17, 2008