Buy: IPO China Farm

As the name suggests, China Farm is a farm equipment supplier to farms, in China. They produce harvesters and plough machines (bye bye bulls hello stock bull), and they produce diesel engines for various uses, including in their own product.

In terms of prospects, there is lots. Looking back that the industrial age in USA, farms are rapidly mechanised to increase efficiency for the population, with a reduced amount of arable land for urban use. Bring it back to present world, we could see the same rapid mechanisation in China. China Farm is well placed to tap into that.

Prospects aside, hows the fundamentals? Since its an IPO, there really isn't much I can look into its quarterly performance. However, the yearly performance has been nothing short of impressive. Revenue, Profits and EPS has more thandoubled for the last 3 years, each year. >50% growth.

"Thats the kind of company that calls for not only a headliner day 1, but a headliner for 2007. "

Risks? What are the chances of the government withdrawing grants for machines to farmers? I think its unthinkable. The government, though Communist, has proved to be an extremely efficient government in economics, and is unlikely to make a decision like this. The farm industry is set to grow.

I will within the next few days sell my shares of Tech Oil & Gas and apply for China Farm's IPO (pick me!). I am 70% certain that shares for China Farm will gain >70% over $0.345, and may reach $1.0 by the end of the year. I based this on nothing.

Joking.

I've been monitoring IPOs for the last few years using my model, and companies that fit my model generally do very well on day 1 and the next year.

I just hope i don't make such an impact on the IPO that i don't get a single lot in China Farm in the ballot. I'll still buy China Farm on day 1, in view of its potential upside of a $1 stock.

Apply! With an interim target of $1.00, pending day 1 open price.
Will inform on blog when I sell Tech Oil & Gas. With graphical prove.