In the continuing story of undervalued U.S.-listed Chinese stocks, a company called Shengdatech, Inc. (NASDAQ/SDTH) stands out as an excellent small-cap growth stock.

This company is based in Taian City, Shandong Province, China, and 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 another material. According to the company, NPCC is an ultra-fine product 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. In China, Shengdatech is the only company right now that is supplying NPCC products to that industry.

The company also has a separate chemical division that supplies products like ammonia bicarbonate, liquid ammonia, methanol, melamine and other agrochemical products in Shandong Province, China. Not necessarily exciting stuff, but they are the kind of products that are in big demand and are highly profitable.

Recently, Shengdatech reported that its 2008 second-quarter revenues grew 76% to almost forty million dollars, up substantially from revenues of close to twenty-three million dollars generated in the comparable quarter last year.

According to the company, its revenue growth was driven by higher selling prices and increased demand for both its chemical and NPCC products. At quarter end, total annual NPCC production capacity was 190,000 metric tons compared to 90,000 metric tons one year ago. Shengdatech cited that its NPCC production contributed 48% of total revenues in the quarter, with the chemical business contributing 52% of total revenues.

Gross margin for the quarter was 36.8%, compared to 33.8% for the same period in 2007.

Net income in the second quarter of 2008 was ten million dollars, representing growth of approximately 66% from net income of $6.0 million generated in the same quarter last year. This is outstanding profitability on total sales of almost forty million dollars.

For the first six months of 2008, total revenues were over sixty- eight million dollars, representing growth of 53% over the first six months of 2007.

Net income for the first six months of 2008 was more than seventeen million dollars, also for a gain of 53% over net income generated in the first six months of 2007.

In my mind, Shengdatech is just another company in a long list of unappreciated and undervalued U.S.-listed Chinese stocks. I don't think many of these kinds of stocks will take off in the current bear market, but when sentiment changes, a company like this could become an excellent wealth creator.