The stock is certain to catch the attention of every OTC market observer. It is a nearly ideal case of a Los Angeles company operating in Mainland China. The management has earned nearly an 18% net profit margin over the last four quarters and a 72% return on average equity. The stock traded at $2.74 on February 13 2008 against a 52-week low of just $0.75. Obviously, the business deserves a close look.
China business and leisure travel is a wonderful profit formula. It is possible to discern a sequence of management moves that give the company multiple choices in generating highly profitable and rapid growth in this dynamic business environment. It is based in Shenzhen, which is one of the most important growth centers in the country. More than 100 franchised outlets leverage the company’s eight own booking offices fully, to cater to huge demand for domestic and international air travel to and from China.
The company’s services must appeal to Chinese and international customers alike. It has alliances with international airlines of the caliber of Virgin Atlantic, though it is also able to organize ground handling in such elaborate detail as to include restaurant bookings. The company is also in the cargo space, which is a key growth driver in the global economic role that China has forged.
The company has recently undone an acquisition because the concerned travel company failed to meet due diligence objectives. It has also invited significant stock ownership by a Chinese financial institution. 2008 prospects are positive because packaged tours and Internet bookings are set to grow.
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