This Chinese Favorite Up Two Points

Remember Shengdatech, Inc. (NASDAQ/SDTH)? I wrote about this company at the end of November and the stock is already up two full points. Not only this; but even at its current stock price, this company is a bargain on the stock market.

This small Chinese company manufactures what is known as “nano precipitated calcium carbonate” (NPCC). This product is commonly described as chemical “filler” that is used to enhance the properties of other materials. According to Shengdatech, NPCC refers to an ultra-fine, precipitated calcium carbonate that has an average particle diameter of less than 100 nanometers, and is used as an additive in various products.

Because of its special physical and chemical properties, NPCC has been widely applied in the paint, paper, plastic and rubber industries. According to the company, NPCC is particularly applicable to the tire industry and, in China, the company believes it is the only one supplying NPCC products to tire manufacturers.

Recently, Shengdatech received a 20-year patent in China for its membrane dispersion technology, which is used to manufacture NPCC. This technology was co-developed by Shengdatech and Tsinghua University, a leading science university in China. The company and Tsinghua University each have a 50% ownership stake in the technology, but Shengdatech has the sole right to the commercialization of any applications.

Shengdatech is representative of many exciting small-cap, Chinese companies. It is growing fast, is reasonably priced on the stock market, and is exceptionally profitable. Only now are institutional investors starting to get interested in this stock. It very well could appreciate a lot higher in value over the coming quarters.

As I’ve written before, sometimes the most profitable stocks can be those that deal with the industrial/infrastructure sectors of the economy. You don’t have to find a high-flying technology stocks to make a serious return on your investment.

When you have an economy that’s growing by double digits each year, even the most basic of industries are booming.