China Sun Group (CSGH.OB) Posts Q3 2010 Results, Future Outlook

In the company’s news yesterday,

China Sun Group High-Tech Co. Ltd. announced its financial results for the third quarter ended February 28, 2010, and its business outlook for the upcoming years.

The company reported third-quarter revenues at $10.8 million, up 22.7 percent from $8.8 million for the third quarter of 2009, an increase attributable mainly due to sales of the company’s newly launched LIP product, which accounted for about 19.7 percent of total sales in the quarter.

Gross profit was $3.4 million, up 42 percent compared to $3.2 million for the three months ended February 28, 2009. Gross margin was 31.3 percent compared to 36.9 percent in the same quarter of last year. The company attributes the decrease in gross margin primarily to a decrease in the market price for cobalt. China Sun Group said it expects gross margins to recover in the fourth quarter of fiscal 2010.

Net income was $2.2 million in third quarter, or $0.04 per fully diluted share, compared to net income of $2.0 million, or $0.04 per fully diluted share, during the same period of 2009.

“In the third quarter of fiscal year 2010, selling prices of our cobalt oxide product declined in tandem with the falling cobalt prices. Our cobalt inventory was purchased in advance of the drop in cobalt prices, which impacted gross margin. While some domestic competitors turned unprofitable due to this factor, we were able to maintain profitability due to higher yields and better capacity utilization,” Bin Wang, chairman of China Sun Group stated in the press release.

The company anticipates its new LIP product to positively impact future revenues as it secures its foothold in the clean energy industry.

“We also launched our LIP product, which is expected to become an important revenue contributor in our future business operations. The urgent need to develop low emission vehicles to reduce air pollution in China has and will continue create huge demand for clean energy and related products. Our LIP product is a core material of lithium power batteries for zero emission automobiles. As one of the few major LIP manufacturers in China, we believe we are well positioned to achieve rapid and profitable growth over the time,” Wang stated in the press release.

For the quarter ended May 31, 2010, China Sun Group said it anticipates to generate approximately $11.0 million to $12.0 million in revenue and $2.0 million to $2.5 million in net income. The outlook is supported by the company’s plans for all around improvement.

“Having been a leader in the cobalt oxide manufacturing industry for years, China Sun Group has recently expanded our business to the more advanced and profitable LIP segment. We will strategically increase our productivity and research efforts of LIP over the next few years to achieve long term sustainable growth for our shareholders. We will also significantly improve our corporate governance and communications with the investment community going forward and look forward to listing our shares on a senior stock exchange soon,” Wang stated.

About QualityStocks

QualityStocks, based in Scottsdale, Arizona is a free service that collects data from hundreds Small-Cap and Micro-Cap online Investment Newsletters into one Free Daily Newsletter Report. QualityStocks is dedicated to assisting emerging public companies with their advertising efforts and now has over 750,000+ subscribers that receive The Daily Stock Newsletters.

To sign up for “The QualityStocks Daily Newsletter” please visit http://www.qualitystocks.net/

Please see disclaimer on QualityStocks website: http://Disclaimer.QualityStocks.net 

Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.