China just keeps chugging along with its rapid growth rate. Recent figures show that the Gross Domestic Product (GDP) in China expanded 9.50% in the second quarter of 2011 over the same quarter in 2010. On a larger scale, China’s average quarterly GDP growth from 1989 until 2010 was a solid 9.31%.
Nineteen ninety-two was an amazing year for growth with GDP mushrooming to 14.20% in December of that year; rebounding exponentially from record lows of 3.80% in December two years earlier. Outpaced only by the U.S., China's economy is the second largest in the world. The country is gaining ground rapidly due to the transformation from a largely closed system to international trade to a more globally-friendly approach that has allowed the private sector to boom and seen a large increase in exports over the last few decades.
Looking to capitalize on the seemingly unending upward surge of China’s economy, Hohhot, China-based Gold Horse International (OTCBB:GHII) operates a diversified business group that controls and operates a construction company, real estate development business and a hotel/banquet facility in Inner Mongolia, China. Through its subsidiary, Jin Ma Construction, Gold Horse has been an established and respected player in the construction industry in Inner Mongolia for more than 20 years.
Fundamentally speaking from a purely stock standpoint, the reverse split that was exercised last year took the Company’s outstanding shares to a miniscule number of approximately 1,935,000 shares. Amongst those shares only about one million are available in the freely tradable float, a fact that clearly explains the low volume trading activity that GHII demonstrates daily.
Investors are enjoying today’s news from Gold Horse that they have officially completed a $30-million project called, "the Shuian Renjia project." No small undertaking, the Shuian Renjia Project consisted of two residential buildings with total seven units aggregating 355 residential apartments and nine commercial units encompassing 56,841.2 square meters. The project took less than one year to complete as it was started on September 15, 2010, with the completion date being May 25, 2011. In a burgeoning neighborhood next to a desirable school, all of the units have already been sold to a group and for personal purchase as of the end of June; officially completing the project for Gold Horse.
The total investment in the Shuian Renjia project was approximately $22 million U.S. In the fourth quarter of 2011, revenue related to the project was slated to be roughly $30 million U.S. of which approximately $18 million U.S. had been collected by the end of May 2011 and approximately $12 million U.S. now having been paid by the end of June 2011.
As mentioned, the investment community appears to be reveling in the news of significant revenues and project completion. Shares are trading up more than 50 percent heading into the close, at $1.09, after hitting a high of $1.30 earlier in trading. Volume still remains low -- as is to be expected -- with less than 30,000 shares trading hands, but that represents a pretty substantial volume day for Gold Horse and could be continuation of a new upward that has begun since the stock a hit 52-week low of 56 cents in June.
