> > --I copied this from Best Independent Research--

> > Investing in Coal-To-Oil Project:
> > In February, the Chinese government approved
> > the one million ton coal-to-oil (CTO) project of
> > Yankuang Group, parent company of Yanzhou
> > Coal Mining Co., Ltd. This is the first indirect
> > coal liquefaction demo project with independent
> > intellectual property in China. The plant will be
> > located in Yulin, Shaanxi province and the
> > Yankuang Group plans to invest RMB13.45
> > billion. The plant will be an environment-friendly
> > project with RMB650 million, or 4.81 percent of
> > the total costs earmarked to make it conform to
> > green standards. The CTO project is expected to
> > achieve an annual indirect coal liquefaction
> > production capacity of 1 million tons, including
> > 780,800 tons of diesel, 258,400 tons of naphtha,
> > 56,480 tons of LPG, and other secondary
> > products such as sulfur, nitrate, liquid argon, and
> > gypsum. The scheme will be a significant step in
> > developing alternative energy sources and
> > achieving a sustainable supply of oil and gas for
> > China.

> > Technology Fuels Growth:
> > Yanzhou Coal Mining Co’s raw coal output has
> > increased over the years, thanks to technology.
> > The firm extensively uses the “top coal caving
> > method”, a coal seam mining technology which
> > allows thick coal seam ranging from 8-12 meters
> > to be excavated in a single stretch until all
> > retrievable coal is collected and waste rocks
> > appears. Further, the method is cost effective as
> > it does not require expensive steel nets for the
> > mine roof. Moreover, the top coal caving mining
> > method increases productivity at its mines to
> > 17.87 tons per mine worker, which is 4.39 times
> > more than the average level of mine efficiency in
> > any major state-owned coal mine. The technology
> > has improved mine safety also. The company’s
> > mortality rate per million tons is at the same
> > levels seen in the U.S. mines.- Hide quoted text -

> - Show quoted text -

> Investing in Coal-To-Oil Project:
> In February, the Chinese government approved
> the one million ton coal-to-oil (CTO) project of
> Yankuang Group, parent company of Yanzhou
> Coal Mining Co., Ltd. This is the first indirect
> coal liquefaction demo project with independent
> intellectual property in China. The plant will be
> located in Yulin, Shaanxi province and the
> Yankuang Group plans to invest RMB13.45
> billion. The plant will be an environment-friendly
> project with RMB650 million, or 4.81 percent of
> the total costs earmarked to make it conform to
> green standards. The CTO project is expected to
> achieve an annual indirect coal liquefaction
> production capacity of 1 million tons, including
> 780,800 tons of diesel, 258,400 tons of naphtha,
> 56,480 tons of LPG, and other secondary
> products such as sulfur, nitrate, liquid argon, and
> gypsum. The scheme will be a significant step in
> developing alternative energy sources and
> achieving a sustainable supply of oil and gas for
> China.

> Technology Fuels Growth:
> Yanzhou Coal Mining Co’s raw coal output has
> increased over the years, thanks to technology.
> The firm extensively uses the “top coal caving
> method”, a coal seam mining technology which
> allows thick coal seam ranging from 8-12 meters
> to be excavated in a single stretch until all
> retrievable coal is collected and waste rocks
> appears. Further, the method is cost effective as
> it does not require expensive steel nets for the
> mine roof. Moreover, the top coal caving mining
> method increases productivity at its mines to
> 17.87 tons per mine worker, which is 4.39 times
> more than the average level of mine efficiency in
> any major state-owned coal mine. The technology
> has improved mine safety also. The company’s
> mortality rate per million tons is at the same
> levels seen in the U.S. mines.

> Why give them a look?
> Sales $201.26 Mil per year
> Sales Growth*   +43.20%
> Debt/Equity Ratio       0.04
> Cash $11.59 million
> Asset $79 million not including $11.59 million in the bank and future
> earning
> Market Cap $25 million

> What they do?
> Basic material and Magnesium (think of them as FCX for magnesium)

> CDII own stakes these companies:
> Chang Magnesium
> Golden Magnesium
> Pan Asia Magnesium
> CDI Magnesium
> Baotou Changxin Magnesium

> Material companies they own:
> Lang Chemical
> Jingkun Zinc
> Jixlang Metal
> CDI Beijing (Steel)

> Why magnesium?
> -Magnesium is the third most commonly used structural metal, following
> steel and aluminium.
> -Magnesium is strong and light, so it is used in several high volume
> part manufacturing applications, including automotive and truck
> components
> -Magnesium is widely used for manufacturing of mobile phones, laptop
> computers, cameras, and other electronic components.
> -Magnesium alloys in aerospace is increasing, mostly driven by the
> increasing importance of fuel economy and the need to reduce weight
> -Magnesium is used to combine in alloys, where this metal is essential
> for airplane and missile construction.
> -Magnesium is an alloying agent, improving the mechanical, fabrication
> and welding characteristics of aluminium.
> -Magnesium is an additive agent in conventional propellants and the
> production of nodular graphite in cast iron.

> The revenue they generates come from sales in China.  However, soon
> they can easily quad-triple that by becoming both importer and
> exporter. Generating revenue not just from China but also US,
> eventually generating from all over the world.

> How is their finance?
> Total Current Liabilities ( Accounts Payable , Accrued Expenses, Notes
> Payable/Short Term Debt, Current Port. of LT Debt/Capital Leases)
> As of 3/31/09 $13.53    million
> As of 12/31/2008 $22.23 million
> As of 9/30/2008 $33.41 million

> Dummies version explanation:  Think of it as your credit card bill and
> you are trimming 30% off your credit balance every 3 month.  Most
> amazingly is the total current  liabilities and the pace its
> decreasing rate (less liabilities, less debt the better, making
> improvement quarter over quarter is just icing on the cake).

> China Direct, Inc., doing business as China Direct Industries, Inc.,
> primarily engages in the production and distribution of magnesium in
> the People’s Republic of China. It also distributes basic materials
> and offers consulting services. The company operates in three
> segments: Magnesium, Basic Materials, and Consulting Services. The
> Magnesium segment produces and distributes various magnesium products,
> such as magnesium ingots, magnesium powders, magnesium alloys, various
> grades of ordinary mag ...

> What are the Potential Catalyst?

> -Although they generate their revenues from sales in China, China
> Direct is also taking steps to become a U.S. importer of the metal.
> The company's first test shipment cleared customs last month, said
> James Wang, chairman and chief executive officer.

> -China Direct is seeking an exemption from U.S. import duties, a
> process that could take between six months and a year.

> -Rebound in magnesium price

> -Still ranked number 1 here, keep in mind Feed, APWR, etc were on top
> 10 before they made 500% move.  http://www.cnanalyst.com/upside/

> --repurchase of $1.7 million worth of their own common stock recently

> Anybody disagree? And why?

> http://www.cnanalyst.com/upside/