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HQ Sustainable Maritime Industries Inc. (AMEX: HQS) Has a Stable Business Platform

This company from Seattle has major business in China. It has a broad range of products harvested from the oceans and grown in fish farms as well. It has customers in the United States, Mexico, Korea, Japan, and Australia, but its major base is in China.

The company has an unusually broad range of products, from tilapia which are relatively easy to grow, to value-added nutrition and therapeutic products made from non-endangered species of sharks. It also has a thriving business in superior grades of shrimps. Sea-food demand is set to grow, so the company has a very durable business model.

The company uses a co-operative arrangement for supplies, which is another source of strength. Small fishing communities gain international branding opportunities through this company, while the management has vertical integration and low-cost advantages.

Pollution and toxicity are key consumer and regulatory concerns in the Fish/Livestock industry. This company has secured organic certification from the Chinese authorities. Its principal sourcing is from an area designated by Beijing for organic harvesting of aquatic and ocean produce. The processing facilities of the company follow HACCP (Hazard and Critical Control Point) guidelines. The company has excellent long term prospects as it is able to meet quality and food safety norms.

The management has achieved nearly 50% annual growth during the most recent quarter against just 28.4% for the Fish/Livestock industry. The Gross Margin over the last four quarters is more than twice the figure for the industry. Investors can therefore choose this stock with confidence.

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