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Two Cent Penny Stock Firm to Acquire Chinese Plantation Company
By: AllPennyStocks.com News
June 18, 2010
Nowadays, with human error responsible for putting this planet in mortal peril, it is cheering to hear about successful companies doing something that is positive for the environment.
One such firm is China-based China Forestry Inc. (OTCBB:CHFY), a timber investment group which announced in mid-June that it had acquired all the equity interest of compatriot company Hanzhong Hengtai Bio-Tech Limited, by way of a share exchange agreement dated June 10, with Financial International (Hong Kong) Holdings Company Limited.
Hengtai is a company organized under the laws of China and existed as a variable interest entity of FIHK, a company incorporated in Hong Kong. Hengtai makes Chinese Yew, Aesculus, Dove Tree and Dendrobium plantation, substances endorsed by China’s science and technology ministry as effective in the fight against cancer.
Under the terms of the share exchange agreement, CHFY will acquire 100% or all of the issued and outstanding share capital of FIHK from its shareholders in an exchange for 100,000,000 shares of newly issued common stock of the CHFY and a Convertible Note for the equivalent of $1 million U.S.
CHFY, incorporated in Nevada in early 1986, and mainly focuses on operating a forestry development, though its indirect wholly-owned subsidiary, Harbin SenRun Forestry Development Co., Ltd.
CHFY’s strategy is to capitalize on the Chinese Government's decision to promote sustainable forest management through land tenure reforms that include the transferability of forest user right certificates to entities in that country. CHRY’s current holdings include ownership of four user right certificates representing 1,561 hectares of State forest assets in the northeastern Heilongjiang Province, home to China's most valuable timber.
China’s 175 million hectares of forest stock ranks as fifth in the world. Generations of over-exploitation, disease and fires have reduced its forest coverage to 18% of its land mass, ranking its 0.13 hectares of forest per capita at 134 globally, less than one-fourth the world average. The recent goal of the Beijing government is to change those figures, increasing its forest coverage to 26% by 2050.
To that end, CHFY has gone the acquisition route, picking up Harbin in 2006, and buying forest user right certificates, supposedly left, right and center.
What should primarily thrill potential investors is that, with all its holdings, CHFY is stuck in the bottom end of a 52-week stock trading range, falling to 95-100ths of a cent on June 11. The stock peaked at a dime on November 17. But with its latest acquisition, and the other cheery developments coming out of the once-forbidden Asian country, the company is understandably excited, and plans on “planting the seed” of enthusiasm into potential investors as well.
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