China Digital Communication Group

Filed Under Electronic Instr. & Controls

China Digital Communication Group (Symbol: CHID) is actually a US corporation based in Shenzen, one of China’s key manufacturing centers. They manufacture components for batteries used in mobile phones, digital cameras, PDAs, laptops, and other digital devices. Their main goal is to become the largest telecom-equipment producer, marketer, and distributor with a significant presence in the US market as well.

Recently they announced that they have entered a product test agreement with one of the US’ leading computer retailers and resellers of technology products and services. Based on the agreement, the retailer will see China Digital’s lithium ion batteries in 20 of its retail stores nationwide and its e-commerce website. Pretty good, heh?

China’s domestic mobile phone market is expected to increase in 2005 to 570 million units, up from 450 million in 2003; while the worldwide market will increase to 2.52 billion from 2.16 billion. In other words, this will benefit China Digital Communication Group since their domestic battery sales in China are expected to rise to $2.1 billion in 2005 (up $264 million from 2004).

The past three months (Oct’ 2005 – Dec’ 2005) the stock has been going crazy. I can’t really decide whether this would be a good short-term or long-term investment. The numbers are good (their net income increased by 478% and revenue increased by 242% year-over-year in Q3 2005), the prospect is great, and they are one of the leading companies in their industry in China.

I’ll let you decide on this one