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China Direct Industries, Inc. (CDII) FY11 Financials Report Shows Solid Growth, Positive Leading Indicators in Fundamentals

Today, China Direct, a veritable clearinghouse for investment capital interests and management logistics based in the US, which serves the small- to mid-sized business sector of the PRC and produces/distributes to both markets (largely industrial products),  reported excellent financials for FY11 (period ending Sept. 30).

Let’s take a look at a quick breakdown of the salient data points from the report:

  • Revenue up 66.6% to $187.8M from FY10
  • Gross Profits up 171.1% to $19.5M over FY10 data – GP Margins also up 63% (to 10.4%)
  • Net Income of $9.3M compared to a $3.2M loss in FY10
  • Diluted EPS of $0.25 compared to a loss of $0.11 per share in FY10
  • Total Assets of $116M, up 21% over FY10
  • Shareholder Equity of $68M (up 35.5%) on 40.4M (31.7M in FY10) shares outstanding
  • Cash and Cash Equiv. up 24.8% to $12.6M and Prepaid Expense up 67.4% to $14.4M
  • Working Capital up 46.9% to $44.5M

All around a huge upswing for CDII as this ambitious Deerfield Beach, Florida headquartered continent spanner becomes an increasingly dominant hub for nurturing various entities and business solutions to fruition within the PRC.

Growth across all business segments in FY11 shows solid evolution of end market cohesion, with revenue from the Ruiming Magnesium acquisition, the consulting segment and international commodities businesses leading the charge. Magnesium segment hit $99.9M, up 95.3% on strong demand and high volume (up 68.2%, or 36,637 metric tons) bolstered by an increase in the average sale price (up 15.1% to $2,703/ton).

The basic materials segment saw similar dynamics with revenue up 17.2% to $68.9M largely on the strength iron ore from the Company’s US-based industrial commodities business. The consulting segment did quite well, bringing in total revenues of $19M, up a whopping 578.6% on fees earned via two new big clients.

The abundant forward momentum generated across the entire operating environment in FY11 is set to be exploited fully by CDII and despite some cyclical softening of magnesium demand late in the year the Company went into FY12 with strong prices and indicators. Plans to utilize cleaner and more efficient waste gas, combined with strategic magnesium acquisitions should really push operations to a whole new level for CDII in this segment and projected tightening of Chinese supply should accelerate things significantly.

Chairman and CEO of CDII, Dr. James Wang, commented on the bold return of the Company to profitability in FY11, and underscored the potential of consolidation in the magnesium segment, as well as the Company’s successful expansion efforts in North and South America. Sourcing iron ore from Mexico into China, crystallizing price/logistical dynamics in the magnesium segment and due diligence fostering a stronger presence in Bolivia/Chile in order to meet market demand by growing the Company’s commodities business well through 2012, all are seen as contributing factors to a positive forward outlook. With the current business environment for publicly US-traded Chinese companies lighting brushfires of production across the operational landscape, CDII is positioning for strong growth in fundamentals as the consulting business really starts to heat up.

For more information on the financials report, or on China Direct Industries, Inc., please visit the Company’s website at:

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