This is a speculative investment, but one that is very attractive at this level. The stock caught our attention today after trading nearly 5 million shares when its 3-month average daily volume is just 17,778 shares. Unsurprisingly, this has been an all-time record volume day. While there doesn't appear to be any significant, publicly known reason for the surge, it is quite interesting.

China Finance, Inc. (CHFI.OB) is a well capitalized Chinese financial services company focused on providing guarantees to China's large and rapidly growing class of privately owned small and medium enterprises (SMEs) when they seek access to capital or to be acquired by a United States reporting company in a merger. The company's mission is to bridge the gap between China's small and medium size enterprises' (SMEs) rapidly growing demand for capital and the country's underdeveloped banking system and equity markets.

In the past 52-weeks, the stock has traded as high as $6.90 and as low as $0.042. It is very interesting to note that the CEO purchased $1.5 million dollars of stock at $4.96 (which was nearly at the peak). According to Yahoo Finance, 81.50% of the outstanding shares are currently held by insiders. It is also notable that assets total $39.7 million while liabilities only total $2.4 million. With a book value of $0.647, this stock is very attractively valued.

By buying this stock, you are actually purchasing the shares of many Chinese microcap companies. When providing surety guarantee services to Chinese SMEs seeking to become publicly-traded companies in the United States, the company generally expects to be paid in stock since their clients are oftentimes not able to pay in cash for these services. Fortunately, the company is very strict when selecting clients and has proven their ability to make returns on their investments.

There's much more that could be said about this company and we highly recommend reading recent press releases. It would also be highly beneficial to read through the company's website.

Links:

Company Website

Risk Control/Criteria

Recent Press Releases