Yesterday, China Clean Energy Inc. (OTC:CCGY) stock finally rushed up after the company announced its second quarter financial results. Despite the 25.40% jump up, it looks like the shares are still undervalued.
The reported by the company three-digit percentage increase in revenues and income seemed like something usual and expected by investors.
The latest comparable CCGY stock stir took place at the beginning of April and also followed the announcement of the company’s annual financial report.
Then, CCGY shares noted a 52-week high at $0.99 and investors were not ready to overcome the $1 value per share.
During the following month, when the company’s first quarter results were published, investors seemed to be used to CCGY reporting high growth, noticed on the lower market activity.
The released yesterday CCGY second quarter results and the presented business outlooks were immediately reflected in CCGY share price and volume increases. This time, the closing price was far below the above mentioned 52-week high.
Maybe, the company’s statement in its financial report that it has sufficient working capital to operate at full capacity until the end of the year was one of reasons for investors to get more cautious about CCGY stock.
Despite the need of additional working capital after that period, CCGY plans to continue its growth by acquiring an upstream feedstock supplier. Through that acquisition, the company hopes to mitigate its row materials supply risk and the feedstock price fluctuation. Since the increase in revenues due to increased capacity provided by the new facility in Jiangyin was successful, it is not hard to believe that CCGY will implement its next investment plan as soon as possible.[BANNER]
The Chairman and CEO of CCGY forecasts that by the end of the year the company’s revenues are expected to reach $57 million, representing a year-over-year increase of 258%. The operating income is expected to reach $8.2 million, representing a year-over-year increase of 811%.
Based on that optimistic forecast, it looks like CCGY stock was rushed up yesterday, but not strong enough. CCGY stock closed at $0.79 in more than 458K volume.
