Check on China: China Direct, Inc.

China has been good to investors. Thanks to a wave of hot Chinese companies that have become phenomenally successful in U.S. and global markets, investors have been rewarded with exceptionally high returns.

Even as the U.S. economy fights to stay out of a recession, consumer spending slows, the credit crunch worsens, bleak financial market news becomes the norm, and a wave of American businesses struggle to stay afloat, many companies tied into China's booming economy continue to prosper. 

China Direct, Inc. (AMEX:CDS), an American firm that assists Chinese companies with accessing the U.S. capital markets and owns controlling stakes in a diversified portfolio of China-based businesses, has been no exception. China Direct invests in profitable, well-managed Chinese small to medium enterprises (SMEs) that account for 75% of the growth in the Chinese economy and have difficulties obtaining capital through traditional channels. After incorporating as Evolve One, Inc. in 1999, China Direct quietly meandered along until it grabbed the Street's attention in November 2007, when it posted unexpectedly high third-quarter revenue gains, swung into the black and upped its earnings outlook for 2007 and 2008. 

China Direct's recent success can be attributed to savvy acquisitions made by its smart management team, which has significant experience in top public and private enterprises in the United States and China.

In October 2006, it snapped up a 51% interest in Shanghai Lang Chemical Co., Ltd., a company that sells and distributes industrial grade synthetic chemicals. In February 2007 it bought a 60% majority stake in Chang Magnesium Co. Ltd., operator of a magnesium refinery in Taiyuan, China, and it secured 51% ownership of CDI Wanda Alternative Energy Co., Ltd., a recycling company that converts waste rubber tires into gasoline, diesel and fuel oil. In November of 2007, it acquired CDI Jixiang Metal Industry Co., Ltd., a company with sole mining rights to a parcel of land in the zinc- and lead-rich Yongshun Kaxi Lake Mining area. In December 2007, it bought a 51% stake in Baotou Xinjin Magnesium Co. and Baotou Sanhe Magnesium Co., Ltd., two magnesium companies.

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