Detailed Profile

China Marine

Symbol: CMFO Type: OTCBB Sector: Emerging China State Location: China State of Inc: China Phone: Fax: Web Site:

Company Information

Market Cap:

$81 million 

Cap Structure:

Fully Diluted Shares: 23M
PIPE Price: $3.21 completed December 2007 (registration went effective May 2008)
Raise: 19.9MM 6.199MM approx shares (Warrants: 20% warrant coverage @ $4.18 for 3 years. 1.239 MM shares)

Company Overview:

China Marine produces dried, processed seafood snacks. Company maintains 21 different branded products sold in 3 provinces where they have a 35% market share. Instead of potato chips the Chinese love these for nutritious on-the-go snacks. The average price is $8RMB (or just over a $1US). They have $33M in cash and are going through Phase I expansion right now which will add 50% to their production. A larger expansion will take place in 2009. With 24 distributors and 1300 retailers that sell their products they will be expanding their products to other provinces as part of the growth plan. DSO's are under 30 days and ROE is over 30%. The company has Net Income Make Goods for 2008-2009 of $10.5M and $14M respectively which off of fully diluted share count of 25M yield $.42 in EPS and $.56. The company has complete a strong second quarter is, in our opinion, worth a look as the share price is near the PIPE price currently. For more information visit: http://www.hcinternational.net/CMFO.asp

Growth Plan:

1. Company is currently expanding its production capacity by 50% and this will come online during October of this year.
2. Company added new distribution in cities and provinces, Shanghai and Guangdong.
3. CMFO will add an additional production (processing and storage) facility in 2009. This will add another 6.6 tons to the capacity to total 16.5 tons

Financial Highlights:

- Balance Sheet includes $33M in Cash (6-30-08)
- 2007 Revenue $34.7MM up 33%
- 2007 Net Income $8.45MM up 23%
- Q2 2008 Revenues increased 51.3% to $13.1 MM
- Q2 2008 Net Income increased 67.8%% to $3.2MM
- 6 Month Revenues are $23.8 MM
- 6 Month Net Income is $6.0 MM
- Make Goods for 2008 $10.5MM and 2009 $14MM Net Income
- Corresponding EPS based on Make good for 2008 and 2009 are $0.42 and $0.56 respectively