06-10-2009 CAEI - China Architectural Engineering
QUICK ALERTED PRICE: $1.49 (06/09/2009)
TYPE OF PLAY: GROWTH / FUTURE PROSPECTS
China Architectural Engineering (Nasdaq: CAEI) specializes in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems, roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.
China has a $586 billion stimulus package in place and have began to spend on construction. China Architectural Engineering (CAE) has a history of working on large government projects in the past which should bode well for future spending by the Chinese government going forward.
CAE has also began expanding their services worldwide, procuring a large contract in Dubai where they will be engineering and installing of station facilities for the Dubai Metro rapid transit system.
Despite tough economic times, CAE’s revenues for the first quarter of 2009 totaled $36.34 million, up 43.4% and they continued to remain profitable for the full year. Their backlog remained robust at $136 million. The CEO also had this to say about going forward:
“But in the longer term it can be expected to produce a sharp rise in revenues, with rising gross margins and international diversification that makes us less vulnerable to demand volatility in CAE’s home market, China.”
It is quite clear that globally China has the most potential and room for an economic turnaround, they have the finances and the intense need for infrastructure and other engineering work to be done, this should benefit CAE going forward as they remain strong in their own homeland. The recent rise in oil also benefits CAE because now their expansion territory, the Middle East, has more money to spend on services in the future. With all the 'going green' buzz that is going around the globe, CAE energy saving products that may see an increase in sales in the future.
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Links for further reading:
CAEI homepage
SEC filings for CAEI
General CAEI statistics
