China Yuan Hong Fire Control Group Holdings Ltd. (NASDAQ:CNYH)

China Yuan Hong Fire Control Group share holders registers stock to take company public. (Company was originally a private shell that became a non-public operating entity via a reverse merger).

Company Snapshot:

Operates a fire safety products company in the People’s Republic of China

Industry Snapshot:

• The Chinese fire safety products industry is divided into three major segments: residential, commercial and industrial. According to the Market Research Report on Gas Aerosol Fire Extinguishing System published by HC International (the “Market Research Report”), there are over 3,000 fire protection product manufacturing companies in China. The Market Research Report and the Research and Analysis Report on Domestic Fire Protection Industry in 2008 published by HC International (the “2008 Industry Report”) report that in 2008 the sales volume of fire safety products in China reached approximately ¥46 billion (approximately $6,739,136,804 based upon an exchange rate of ¥6.8258 to US$1.00) and the average annual sales growth rate, which over the past five years has been 17%, is expected to grow at a rate of 15% to 20% over the next few years.

• The fire safety products industry in China is relatively fragmented with many suppliers. According to the 2008 Industry Report, only 5% of the Chinese fire safety products companies achieved annual sales exceeding ¥50 million (approximately $7,325,149 based upon an exchange rate of ¥6.8258 to US$1.00) and 72% have annual sales below ¥10 million (approximately $1,465,030 based upon an exchange rate of ¥6.8258 to US$1.00). Until recently, the small-scale fire production companies played a dominant role in the industry.

Use Of proceeds:

• Construction of a research and development testing center
• Purchase of manufacturing equipment
• Expansion of our sales network and marketing expenses
• Potential acquisition of complementary fire safety businesses
• Working capital

Underwriter: Anderson & Strudwick

Proposed offering price: $6.00

Post Merger Share Calculation:

• 15,173,334: Pre IPO merger outstanding shares
•   2,250,000: ~ Registered shares of Common Stock by current shareholders.   
•   1,742,333: ~ Shares from underwriter warrants

GeoTeam® best effort calculation of total post IPO assuming full conversions: 19,165,667

Financial Snapshot: December Year End

2009 vs. 2008

• Revenues: $50.4 million vs $24.4 million 
• Adjusted Net Income: $12.4 million vs. $4.2 million 

Nine Months September 2010 vs 2009

• Revenues: 47.5 million vs. $32.5 million 
• Net Income: $11.9 million vs. $7.9 million 

Pro Forma Valuation: using $6.00 offering price and new share count

• Trailing EPS: $0.86
• Trailing P/E:  $7.0