CHINA INTEGRATED ENE (OTC:CBEH)

XI'AN, China, May 3, 2013 /PRNewswire/ -- China Integrated Energy, Inc. (OTC Pink: CBEH, "China Integrated Energy" or the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that the Company has engaged RBSM LLP as its independent auditor.

China Integrated Energy, Inc. was informed by its independent registered public accounting firm, Sherb & Co., LLP, ("Sherb"), that it has combined certain of its practice with RBSM LLP effective January 1, 2013. As a result, Sherb effectively resigned as the Company's independent registered public accounting firm and RBSM LLP became the Company's independent registered public accounting firm. The engagement of RBSM LLP as the Company's independent registered public accounting firm was approved by the Audit Committee of the Company on March 4, 2013.

Ms. Gaihong Li (Lisa), Chief Financial Officer of China Integrated Energy, said, "The change of the auditor is solely a result of the merger. Given the continuity of service, we believe and expect that the merger will have no negative effect on the auditing work for us, and we look forward to working with RBSM LLP."

On September 18, 2012, Mr. Jeff Chan tendered a letter of resignation from his position as Chief Financial Officer of the Company, which will be effective as of September 30, 2012. Mr. Chan cites relocation and personal reasons for his decision to resign. Mr. Chan has stated that he has no disagreements with Company management and is not aware of any issues relating to the Company’s financial statements.

Ms. Gaihong Li (Lisa), age 35, will succeed Mr. Chan as Chief Financial Officer. Ms. Gaihong Li (Lisa) is currently Executive Vice President, Financial Controller and Director of the Company.

XI'AN, China, May 24, 2012 /PRNewswire-Asia/ -- China Integrated Energy, Inc. (OTC Pink: CBEH) ("China Integrated Energy" or the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced the completion of the thorough Independent Investigation conducted by the Audit Committee into allegations raised in reports published in early 2011. Although the specific findings and conclusions of the Committee, as advised by its legal and forensic accounting professionals, remain privileged, the Company announced that the Committee has informed it that the Committee is satisfied that the vast majority of the short sellers' claims were baseless. Based on its investigation, however, the Committee has made observations, primarily regarding strengthening internal controls, which the Company will actively pursue.

Beginning in March 2011, short sellers calling themselves Sinclair Upton and Alfred Little published claims that China Integrated had made misrepresentations or other alleged wrongdoing regarding (1) cash in the bank, (2) related party transactions allegedly benefitting the Company's Chairman and his family, (3) the Company's overall financial health, as demonstrated by differences between Chinese filings with the SAIC and US filings with the SEC, (4) certain accounting practices, (5) the value and ownership of gas stations owned or leased by the Company, (6) the Company's affiliations with educational and research institutions, (7) the Company's auditors, (8) whether the Company enjoyed certain tax exemptions, (9) the Company's licenses , (10) the VIE structure, (11) the Company's wholesale distribution network, and (12) the Company's production of biodiesel.

In May 2011, the Audit Committee engaged Shearman & Sterling LLP to lead the independent investigation into these allegations. Each of these allegations was thoroughly investigated. While some issues remain as to production at the Company's Tongchuan biodiesel facility, and while the investigation revealed the need to strengthen internal controls and take similar measures, the primary substance of all other allegations has been proven groundless. Sales of biodiesel accounted for approximately 17% of the Company's revenue in FY2010. The Committee applauded the Company for its full cooperation given throughout the investigation.

Speaking on behalf of the Company, its Chairman, Xincheng Gao, stated: "We are heartened, but not surprised, to hear the Audit Committee's conclusions. From the day the short sellers issued their attacks, we have consistently and vehemently denied them. Unfortunately, in this climate, people like the short sellers can say anything and then it is up to the Company to prove its innocence. While we are happy that we have been able to do so, the effort has cost the Company, and therefore its shareholders, a great deal. We are of course struck by the fact that the short sellers accused us of making false statements to benefit ourselves financially, when, in fact, that is precisely what the short sellers did. We will continue to defend ourselves and also continue to work with the Audit Committee to resolve any remaining issues regarding biodiesel production. We also appreciate that this thorough evaluative process inevitably and productively leads to useful recommendations, which will make our Company stronger and even more responsive to the interests of its shareholders."

XI'AN, China, May 20, 2011 /PRNewswire-Asia/ -- China Integrated Energy, Inc. (Nasdaq: CBEH) (the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that it has appointed Jeff Chan to serve as Chief Financial Officer of the Company. Jeff replaces Albert Pu, who resigned as Chief Financial Officer on April 28, 2011.

Jeff is a fellow member of Association of Chartered Certified Accountants. Jeff joined Ernst & Young Shanghai office in 2005 after working for four years with another big four auditing firm in Malaysia. He served six years in various positions within Ernst & Young's assurance group, the last two as a senior manager.

Throughout his professional career, he has served a myriad of clients, mainly in industries that included production, semi-conductors, transformers, telecommunications, and power generation. In addition, he has also conducted special audits and due diligence reviews in connection with listings and acquisitions. He is conversant with US GAAP, IFRS, and PRC GAAP.

Mr. Xincheng Gao, Chief Executive Officer of the Company, said, "Jeff has a very strong background in accounting and a solid six-year track record at Ernst & Young. I am confident that Jeff's financial experience and capabilities will facilitate a smooth transition, and I look forward to working more closely with him to further enhance the Company's performance."

Rodman and Renshaw on CBEH                                        5/2/2011

CBEH: Terminating Coverage

Terminating Coverage: Effective immediately, we are terminating coverage on China Integrated Energy Inc. (Nasdaq: CBEH) to better allocate resources within our coverage universe. Our last rating for CBEH was Under Review / Speculative Risk. Investors should not rely on our previously published financial projections.

Recent Developments: On April 27, 2011, CBEH issued an 8-K form announcing the resignation of Larry Goldman, the Board member and Chairman of Audit Committee due to the resignation of the team of special independent investigators, including Pillsbury Winthrop Shaw Pittman LLP, Deloitte Financial Advisory, and King and Wood. The 8-K filing also disclosed the electronic resignation letters of Larry Goldman and the investigators, indicating that the company’s failure to provide requested documents obstructed independent investigation. Prior to the resignations, on March 29, 2011, we put our rating Under Review after the company announced the independent investigation regarding the allegations, and removed our financial projections. Trading in the stock has been halted since market close on April 20, 2011.

On April 20, 2011, the company announced a lease termination of 4 gas stations in Shaanxi province by the lesser, Shaanxi Highway Service Co., Ltd. This brings the total number of gas stations operated by CBEH to 9 from 13.

4Q10 Results: CBEH reported 4Q10 revenue, net income and EPS of $118.0 MM, $15.3 MM and $0.39, largely in line with our expectations of $118.0 MM, $15.5 MM, and $0.35, respectively. By business segments, Wholesale distribution, bio-diesel, and retail gas stations accounted for 58%, 18%, and 24% of total revenue, generating $68.6 MM, $21.2 MM, and $28.2 MM, respectively.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

On April 26, 2011, a member of the Audit Committee of the Board of Directors of China Integrated Energy, Inc.  received a letter from KPMG confirming that the client-auditor relationship with the Company ceased.

In its letter KPMG indicated that its resignation was due to, in its view, the inconsistency between management’s representation to KPMG that it will fully cooperate with the special investigation requested and authorized by the Audit Committee and the manner of management’s conduct during the investigation, and such inconsistency has made KPMG unable to rely on management’s representations in connection with its 2010 audits of the consolidated financial statements and the effectiveness of internal control over financial reporting of the Company.

XI'AN, China, April 20, 2011 /PRNewswire-Asia/ -- China Integrated Energy, Inc. (Nasdaq: CBEH) (the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that four gas station leases entered into in 2008 have been terminated by Shaanxi Highway Service Co., Ltd. ("Shaanxi Highway"), reducing the total number of the Company's gas stations from thirteen to nine. Shaanxi Highway has recalled all of the 32 gas stations that are currently being leased by Shaanxi Highway to third parties, including the four gas stations leased by the Company.

On May 20, 2008, the Company leased four gas stations for operation from Shaanxi Highway. The annual lease payment for each gas station was approximately $437,000 (RMB 3,000,000). The Company was required to make the lease payments for all four gas stations in advance in five-year increments. The first five-year aggregate lease payment of $8,747,631 (RMB 60,000,000) has been paid by the Company to Shaanxi Highway.

Each gas station will be inspected by Shaanxi Highway, and upon its approval, the Company will receive the pro-rated portion of the prepaid lease payment by April 30, 2011. The Company expects the aggregate returned amount to be approximately $3,970,496 (RMB 26,000,000).

"As mentioned in my letter to shareholders on March 23, 2011, since early 2010, the cost of acquiring or leasing retail gas stations has escalated significantly in China, primarily as a result of increased competition to buy gas stations from state-owned petroleum companies working in cooperation with foreign entities," said Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. "Given the fierce competition that exists now in the retail gas station market in China, we will continue to evaluate organic and acquisition opportunities in all three of our business segments - biodiesel production, wholesale distribution and retail gas stations - to prudently deploy available resources to achieve the greatest investment return."

XI'AN, China, April 5, 2011 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. today announced that the Audit Committee of the Company's Board of Directors has retained the law firm Pillsbury Winthrop Shaw Pittman LLP who, in turn, with the Audit Committee retained Deloitte Financial Advisory Services LLP to, together, advise the Company's Audit Committee with regard to the Audit Committee's independent investigation into various issues raised by certain individuals.

Mr. Larry Goldman, an independent Director and Audit Committee Chair, said, "We consider these issues to be significant and the Audit Committee intends to conduct a thorough and independent investigation.  The Audit Committee will authorize counsel to engage such additional independent advisors as deemed necessary and the Committee will work to conclude the investigation in a timely manner."

Important CBEH Update:

Recall the following excerpt from our CBEH research note on March 25, 2011:

Note that we are not sure whether the WFOE (FIE), RedSky, is holding a substantial amount of income. Theoretically, the VIE can send the WFOE its net income. This transaction would be an expense to the VIE and taxable income to the WFOE. However, usually, in the VIE structure, the WFOE does not hold a substantial amount of income. We have not obtained the WOFE's filings at this time, but we have yet to come across a situation where a WOFE retains a significant amount of income in our analysis of VIE ChinaHybrids. Furthermore, in its rebuttal, CBEH made no mention of the WOFE retaining any income.  Regardless, if we locate a substantial amount of income in CBEH's WOFE, we may be inclined to change our opinion. Another possible scenario is that CBHE choose to report its true revenue standing to the SAIC/SAT agencies. In doing this,the company likely paid the appropriate VAT tax.  However, CBEH may have went on to overstate expenses to avoid income taxes (rendering SEC margins to be accurate). Remember that the penalty for VAT tax avoidance is much more severe than the penalty for income tax fraud. Still, the magnitude of a net income tax avoidance scenario would be rather large in the case of CBEH and we feel improbable (we are willing to accept tax fraud of around 30% underpayment). The bigger and more disturbing questions become:

• How do auditors like KPMG verify tax payments and allow companies to show tax payments on SEC documents that may have actually not been paid?
• If SEC documents are accurate, where does the phantom tax paid go? Back into the company or to line the pockets of management? 
• What would be the penalty for income tax fraud that is greater than a 30% underpayment?

We have now received the SAIC filings for RedSky.  Comments From Bob:

We obtained the SAIC and SAT of the WFOE of CBEH last night. The SAT and SAIC filings match each other, as should be the case for an FIE. Unfortunately, according to our findings, the WFOE does not have any substantial business. Thus, we will assume that our original analysis of the VIE of CBEH was originally correct, meaning that net income for CBEH is minimal and that the SEC documents grossly misrepresent profitability.

Rodman and Renshaw on CBEH                                     3/29/2011

CBEH: Rating Under Review

Rating Under Review: We are putting our rating on CBEH Under Review from Market Outperform. Our rating change is driven by the company’s announcement to undertake an independent third party investigation surrounding recently published allegations. We will continue to monitor developments and revisit our rating on the completion of the third party review.

Stock Performance: CBEH has dropped over 50% in the last two weeks as management has publicly sparred with short interests over various allegations. The outcome has created confusion in the market about the company’s business and M&A driven growth strategy. We are removing our financial projections on CBEH while we have the company Under Review.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Earnings Recap from blog entry 

CBEH is another Chinese RTO company that has come under fire. The company recently reported 2010 vs. 2009 fourth quarter EPS of $0.38 vs. $0.30, exceeding analyst estimates of $0.34.

We were recently turned off by the CBEH story when the company raised money at insanely cheap valuations, despite having a "healthy" cash balance: 

CBEH raises funds

"XI'AN, China, Dec. 29, 2010 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. today announced that it has entered into definitive agreements with several institutional investors for a registered direct placement of approximately $15.3 million of common stock at a price of $7.00 per share. The Company will issue a total of 2,185,716 shares to the institutional investors.

In addition, the Company will issue to the investors warrants to purchase up to 1,092,858 shares of common stock, which, if fully exercised, would provide an additional $7.65 million in gross proceeds to the Company. The warrants have an exercise price of $7.00 per share and are exercisable for six months following the closing date.

The Company anticipates that the capital raised in this registered direct placement will be used for biodiesel capacity expansion and working capital for wholesale distribution of finished oil and heavy oil products.

GeoTeam® Note: What can we really say? Why offer stock?

• Cash balance of $79.7 million.
• Analyst estimates indicate that 2011 EPS will grow 28.5% to $1.85.
• Just appointed KPMG as auditor.

The company should let these positive developments play out before issuing stock at an absurd PEG ratio of 0.22. Dilution will only be 8%, assuming conversion of IN THE MONEY warrants. At least the this may end the overhang that this development was possibly having on CBEH's stock price."

In our recent blog note, we had originally commented that:

• The company had just finished working off past dilution. A new round of shares will once again hamper EPS growth in 2011. (We should note that EPS estimates have been raised to where now the street expects CBEH 2011 EPS to grow to $1.62 from $1.28. Previous 2011 estimates stood at $1.42)
• We believe CBEH has left the door open for another capital raise since its 10K states that it will have sufficient working capital to sustain its current business for the next 12 months, as opposed to commenting that it has capital to expand past current business goals.

On March 16, 2011 we issued an alert that we went short CBEH around $5.00, inspired by a convincing hit piece.

In order to gain clarity on the current CBEH situation, we ordered its SAIC documents. We just received the filings of CBEH's main operating subsidiary and have applied the logic from our circle of trust article, published a few days ago. (SAIC filings confirms the information provided by hit pieces).

Step 1 – Use SAIC documents to determine if companies (who pay VAT) are worth exploring

Confirm revenues. Is CBEH a shell? Pass

• CBEH is not a shell since revenues match SEC filings with in ~25%

• 2009 Revenues SAIC vs SEC: $216 million vs. $289 million
• 2008 Revenues SAIC vs SEC: $151 million vs. $216 million

Taking an additional look at companies where revenues are in an acceptable range of SEC filings – Further analysis to confirm that taxes paid and net income match. Fail

• CBEH is likely misrepresenting margins and/or tax paid since net income in essentially non-existent

• 2009 Net Income SAIC vs SEC: $129 thousand vs. $38 million 
• 2008 Net Income SAIC vs SEC: Loss of $302 thousand vs. $18 million

Confirm that cash balances, assets and liabilities match - TBA (At this point we only need these figures to establish a bottom on CBEH stock price)

Step Two - Perform on-the-ground due diligence.

• Not worth the trouble at this point

Step Three - Supplemental criteria to support SAIC/SAT filings 

• Not worth the trouble at this point unless we are given permission to view SAT filings, as we will not put trust in the KPMG audit.

On March 23, 2011, CBEH published a shareholder letter to rebut information in the hit piece. The company referenced boiler plate rhetoric to down play the relevance of SAIC filings.  We then posed the following question:

If SAIC filings are irrelevant, as management claims, then why are SAIC revenues within 25% of SEC revenues? Is it just coincidence that revenues match but net income is way off?

Conclusion: This reminds us of the FUQI events, where revenues on SAIC filings matched SEC filings, but net income did not.  FUQI is in the process of restating SEC filings and just received its delisting notice. Unlike FUQI, CBEH is a VIE, so there is no annual inspection between the SAIC and SAT. However, since revenues in CBEH's SAIC filings match SEC filings, we will surmise that there is a very high possibility that CBEH SAIC net income figures are a true representation of CBEH operations, with maybe some tax fraud. Valuing CBEH shares is tricky. Since the corporate structure is a VIE, non-PRC entities technically have a questionable legal claim to CBEH's cash. Furthermore, will investors apply logic for companies where it appears foul play has occurred, especially during massive panic times? SAY NO MORE!!!  In order for CBEH to validate its story, we are requesting that the company allow the GeoTeam to inspect SAT filings directly with the SAT agency ASAP. We are not impressed that the company just announced a share buy back, given that CBEH may have misrepresented its business operations. CBEH should have used its "mountain" of cash to buy back stock a long time ago, as opposed to tapping equity markets.  Better yet, they should immediately approve and pay a large one time special dividend.

Note that we are not sure whether the WFOE (FIE), RedSky, is holding a substantial amount of income. Theoretically, the VIE can send the WFOE its net income. This transaction would be an expense to the VIE and taxable income to the WFOE. However, usually, in the VIE structure, the WFOE does not hold a substantial amount of income. We have not obtained the WOFE's filings at this time, but we have yet to come across a situation where a WOFE retains a significant amount of income in our analysis of VIE ChinaHybrids. Furthermore, in its rebuttal, CBEH made no mention of the WOFE retaining any income.  Regardless, if we locate a substantial amount of income in CBEH's WOFE, we may be inclined to change our opinion. Another possible scenario is that CBHE choose to report its true revenue standing to the SAIC/SAT agencies. In doing this,the company likely paid the appropriate VAT tax.  However, CBEH may have went on to overstate expenses to avoid income taxes (rendering SEC margins to be accurate). Remember that the penalty for VAT tax avoidance is much more severe than the penalty for income tax fraud. Still, the magnitude of a net income tax avoidance scenario would be rather large in the case of CBEH and we feel improbable (we are willing to accept tax fraud of around 30% underpayment). The bigger and more disturbing questions become:

• How do auditors like KPMG verify tax payments and allow companies to show tax payments on SEC documents that may have actually not been paid?
• If SEC documents are accurate, where does the phantom tax paid go? Back into the company or to line the pockets of management? 
• What would be the penalty for income tax fraud that is greater than a 30% underpayment?
  

XI'AN, China, March 28, 2011 /PRNewswire-Asia/ -- China Integrated Energy, Inc. today denied the allegations published in the article written by an author calling himself "Alfred Little." The Company has previously denied and addressed similar and overlapping allegations raised by an individual using the pseudonym "Sinclair Upton".

In order to provide the highest level of transparency to its shareholders, the Audit Committee of the Board of Directors had previously authorized the conduct of an independent investigation into the issues raised by Sinclair Upton. The Committee will ask the investigators also to consider the Alfred Little allegations. The Company intends to pursue all of its rights against the authors of these reports.

XI'AN, China, March 21, 2011 /PRNewswire-Asia/ -- China Integrated Energy, Inc. today announced that its Board of Directors has approved the repurchase by the Company of up to $20 million of its shares of common stock over the next 24 months, subject to the Company's blackout period restrictions.

"This share repurchase program reaffirms our ongoing commitment to enhance shareholder value and our confidence in the long-term growth opportunity of our company," said Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. "Our business has continued to generate healthy cash flow and we believe that at current levels, our shares represent a compelling investment opportunity."

XI'AN, China, March 21, 2011 /PRNewswire-Asia/ -- China Integrated Energy, Inc. (Nasdaq: CBEH), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that its Board of Directors has approved the repurchase by the Company of up to $20 million of its shares of common stock over the next 24 months, subject to the Company's blackout period restrictions.

"This share repurchase program reaffirms our ongoing commitment to enhance shareholder value and our confidence in the long-term growth opportunity of our company," said Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. "Our business has continued to generate healthy cash flow and we believe that at current levels, our shares represent a compelling investment opportunity."

As a result of the offering and cash provided by operating activities, we believe we have sufficient working capital to sustain our current business for the next 12 months due to expected increased sales volume and net income from operating. We anticipate spending $8.2 million to purchase a 51% equity interest of a finished oil distributor in Chongqing. We also anticipate spending $9 million to acquire a chemical production plant in Hainan Province for the construction of a new 300,000 ton biodiesel production facility.

GeoTeam Note:  We believe that CBEH has left the door open for another capital raise since its 10K states that  it will have sufficient working capital to sustain its current business for the next 12 months, as opposed to commenting that it has capital to expand past current business goals.

Rodman and Renshaw on CBEH                                              3/15/2011

Expecting 2010 10-K Filing By March 16, 2011

Expecting 10-K Filing On March 16, 2011 - We would like to rectify that we are expecting CBEH's 2010 10-K filing to happen by March 16, 2010 and not March 15, 2010 as published in our last note.

Valuation: At current levels CBEH is trading at a P/E multiple of ~4.0x to our FY11 earnings estimates. We maintain our Market Outperform rating and highlight CBEH as a vehicle to participate in China's increasing energy consumption. At our PT of $12.50, CBEH will be trading at ~8.9x FY11 earnings, still significantly lower than its peer group.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Rodman and Renshaw on CBEH                                                 3/14/2011

CBEH: Expecting Timely 10K Filing To Be A Catalyst; 4Q & FY10 Earnings Update

4Q10 Results: CBEH reported 4Q10 revenue, net income and EPS of $118.0 MM, $15.3 MM and $0.39, largely in line with our expectations of $118.0 MM, $15.5 MM, and $0.35, respectively.

Overall Gross Margin Continues to Improve: 4Q10 gross margin was 15.5%, a moderate improvement from 14.4% in 4Q09 and 15.0% in 3Q10. This was mainly driven by a 240 bps margin expansion in its retail gas business, which generated 14.9% gross margin compared to 12.5% in 3Q10, thanks to a favorable pricing adjustment done by NDRC during the quarter.

2^ndGeneration Bio-diesel Capacity to Ramp Gradually:Currently the company is running at 150,000 tons of bio-diesel capacity, and expects the new 2^ndgeneration facility with 50,000 tons capacity in Tongchuan to come in place by the end of March. Management indicates that the 50,000 tons should be utilized gradually throughout this year, with 20%~30% of utilization rate in 2Q, ~70% in 3Q, and eventually 100% utilized in 4Q and reach 200,000 tons of capacity by the year end.

Management Delivers on New Facility: Last week we hosted a group of investors to visit CBEH’s bio-diesel facility located in Tongchuan City, Shaanxi province. Investors were given a tour of both the current and the newly finished 2^ndgeneration plant. The new plant is under test runs and should be ready to start production by the end of the month. We must give management credit for delivering the new 50,000 ton facility on time. We were at the facility in October 2010 when the new plant’s buildings were under construction compared to our recent visit where all the equipment has been installed and facility is being prepped for production.

Stock Under Pressure We believe the stock’s recent weakness is in sympathy with other small cap China names that are under auditor and 10K / 10Q filing related scrutiny. We believe pressure should abate once the company files its 2010 10K with the SEC. We expect this to happen by March 15, 2011.

FY11 Guidance: Management is now guiding for revenue and earnings of $588.1 MM and $72.2 MM for full year 2011, representing 34% growth in both top-line and bottom-line.

Revising 1Q11 Estimates: We are now expecting CBEH to generate top-line, bottom-line, and diluted EPS of $124.5 MM, $15.0 MM, and $0.29, respectively. For the full year numbers, our projections are in line with the company’s guidance, with $587.5 MM in revenue, $72.9 MM in earnings, and $1.41 in diluted EPS.

Valuation: At current levels CBEH is trading at a P/E multiple of ~4.0x to our FY11 earnings estimates. We maintain our Market Outperform rating and highlight CBEH as a vehicle to participate in China’s increasing energy consumption. At our PT of $12.50, CBEH will be trading at ~8.9x FY11 earnings, still significantly lower than its peer group.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Fourth Quarter of 2010 Financial Results

• Sales - Fourth quarter 2010 sales were $118.0 million, an increase of 26.6% from $93.3 million in the fourth quarter of 2009

"Our fourth quarter results demonstrate our ability to continue executing on our growth plans by increasing biodiesel production to drive incremental, high margin revenues," stated Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. "Sales growth was driven during the quarter by a combination of increased sales volume and higher average selling prices. Biodiesel sales increased 35.7% for the fourth quarter of 2010, compared to the fourth quarter of 2009, while retail gas station sales increased 144.6% due to 3 newly acquired or leased gas stations in 2010, strong consumer demand across 13 stations, as well as higher fuel prices at the pump."

• Net Income – For the quarter ended December 31, 2010, net income was $15.3 million as compared to $12.0 million in the same period of 2009, an increase of $3.3 million, or 28.0%.
• Diluted earnings per share grew to $0.39 from $0.30 in the fourth quarter of 2009.

Based on the strong results recorded for the full year of 2010, management expects to report sales of $588.1 million and net income of $72.2 million for the year ended December 31, 2011.

SUMMARY FINANCIALS

XI'AN, China, Jan. 31, 2011 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. (Nasdaq: CBEH; the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that it has completed the construction of a new 50,000-ton biodiesel production facility, adjacent to its existing 100,000-ton biodiesel production facility in Tongchuan City, Shaanxi Province.

The new 50,000-ton production facility will bring the Company's total biodiesel production capacity to 200,000 tons per annum. The company operates a 100,000-ton biodiesel plant in Tongchuan City, Shaanxi Province and a 50,000-ton plant in Chongqing City, China.

The total construction cost of the new biodiesel production facility was approximately $19.3 million. $18.3 million has been paid by the Company to date, and the remaining $1 million will be paid in the first quarter of 2011.

The facility is expected to be operating at 25% - 30% capacity in the first quarter of 2011 and 50% - 60% capacity in the second quarter, ramping to 80% - 90% utilization rate in the third quarter. For the full-year 2011, the new facility is expected to contribute approximately $21 million in revenue and $5.2 million in net income.

Rodman and Renshaw on CBEH                    01/28/2011

CBEH: Updates On Capex And Expansion 
 

Two Acquisitions in 4Q10: CBEH provided another update on its recent developments. During 4Q10, the company finished two acquisitions: (1) a Shenmu retail gas station for $9.2 MM cash, and (2) Chongqing Tianrun Bio-diesel plant with 50,000 tons/yr of capacity for $16.5 MM cash. The two acquisitions are expected to generate revenue of 12.3 MM and $32 MM for 2011, respectively.

New LOI Signed to Acquire a Marine Fuel Distributor: CBEH also announced that it has signed a LOI to acquire 51% of Chongqing Feng Dou Keyu Trade Co., Ltd, a marine fuel distributor located in Chongqing city for $8.2 MM. CBEH is expected to sell 50,000 tons of products to Chongqing Feng Dou for ~$45.0 MM in 2011. We believe this move could provide an additional revenue stream and help CBEH capture some downstream profit margin.

Tongchuan Phase II Facility In Place This Month: the 50,000 tons/yr phase II facility is about to come on line by the end of this month. $18.3 MM out of a total cost of $19.3 MM has already been paid, with the remaining $1 MM to be paid by the end of the quarter. CBEH projects this new facility to contribute $21 MM in revenue in 2011.

Higher Phase One Capacity at Lin Gao: the company revised its original capacity design of 100,000 tons/yr to 200,000 tons/yr for Lin Gao phase one project. CBEH expects to spend ~$37 MM on the build-out for phase one, which should be completed within 14 months once the deal is closed by the end of 1Q11. Lin Gao phase one facility is expected generate approximately $140 MM in annual revenue.

CapEx and Working Capital: CBEH expects its working capital needs to range between $45.0 and $50.0 MM for 2011, while the CapEx for Lin Gao Chemical is estimated at $37.0 MM.

Key Takeways: Management’s proactive stance on providing visibility into expansion plans should be received positively. It is clear that growth initiatives for 2012 are already underway. We believe these efforts are coming on the back of an optimistic outlook on domestic energy consumption trends.

Valuation: At current levels CBEH is trading at P/E multiples of ~5.0x and ~4.6x to our FY10 and FY11 earnings estimates. These multiples are significantly below the peer group averages of ~21.7x and ~21.5x (includes China and US operating companies). Our $12.50 price target is predicated on a P/E multiple of ~9x to our 2011 EPS estimate. We believe this multiple is in line with the range currently being assigned by the market to small cap US listed Chinese companies. We maintain our Market Outperform rating and highlight CBEH as a vehicle to participate in China’s increasing energy consumption. We believe the stock is available at a very reasonable multiple for a company that has substantial growth opportunities ahead, a strong market position and a healthy balance sheet. Historically energy distribution companies have traded within a range of 8x to 30x on a P/E basis.


Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

XI'AN, China, Jan. 27, 2011 /PRNewswire-FirstCall-Asia/ --- China Integrated Energy, Inc., a leading non-state-owned integrated energy company in the People's Republic of China ("PRC"), today announced an update on its expansion plans.

Management is committed to growing all three of the Company's business segments - the production and sale of biodiesel, the wholesale distribution of finished oil and heavy oil products, and the operation of retail gas stations - to support the Company's long term growth strategy. As of September 30, 2010, the Company had cash and cash equivalents of approximately $79.7 million. Together with strong operating cash flow and net proceeds of approximately $37.4 million from two recent capital raises, the Company believes that it has adequate funds to support its growth plans.  In the fourth quarter of 2010, the Company spent a total of $25.7 million for two separate acquisitions that will generate a combined $44.3 million in revenues in 2011.

1. Shenmu gas station: On October 25, 2010, the Company acquired Shenmu gas station in Yulin City, Shaanxi Province, for $9.2 million in cash. Management estimates the Shenmu gas station will generate approximately $12.3 million in revenue in 2011.

Chongqing biodiesel production plant: On October 26, 2010, the Company acquired a 50,000-ton biodiesel production facility, located in Chongqing City, from Chongqing Tianrun Energy Development Co., Ltd., for $16.5 million in cash. Management expects this acquisition to add approximately $32 million in revenue in 2011.

Rodman & Renshaw on CBEH               1/14/2011

CBEH: Catering To An Energy Hungry Market 

Summarizing Recent Developments: CBEH stock has pulled back from the ~$7.50 levels to ~$6.50 levels driven by newly raised capital. The company expects the proceeds to be directed towards biodiesel capacity expansion and working capital for wholesale distribution of finished oil and heavy oil products. In line with this the company announced an LOI to acquire 100% of assets of Hainan Lin Gao Chemical Co., Ltd for $9 MM in cash. CBEH plans to build a new 2^nd generation bio-diesel plant with 300,000 tons of capacity at this facility (we are not yet modeling for any revenues from this initiative in 2011). The company also signed a contract with an existing wholesale petroleum distribution customer that allows for a 25% increase (40K tons) in sales for 2011 to that customer. On the corporate governance side the company completed its SOX 404 Compliance program and announced signing KPMG as its new auditor.

Attractive Entry Point: CBEH’s recent strategic developments have created, in our opinion, a relatively attractive entry point for investors. We believe the company continues to be favorably positioned to benefit from growing energy consumption in China. This macro trend is now fundamentally supported by 1) a stronger balance sheet 2) improvements in corporate governance as demonstrated by engaging KPMG 3) indications of healthy customer demand and 4) visibility into growth initiatives. Outside of any news flow, the key near term catalyst for the stock should be the company’s upcoming quarterly conference call where management should provide color on cap-ex plans and business pipeline for 2011.

Financial Projections: We are revising our EPS estimates for 2011 to account for shares issued. We are now expecting 2011 EPS of $1.36 compared to $1.60 earlier. We are using a fully diluted share count of 52.8 MM, which includes warrants issued.

Valuation: At current levels CBEH is trading at P/E multiples of ~5.3x and ~4.8x to our FY10 and FY11 earnings estimates. These multiples are significantly below the peer group averages of ~20.7x and ~20.1x (includes China and US operating companies). Our $12.50 price target is predicated on a P/E multiple of ~9x to our 2011 EPS estimate. We believe this multiple is in line with the range currently being assigned by the market to small cap US listed Chinese companies. We maintain our Market Outperform rating and highlight CBEH as a vehicle to participate in China’s increasing energy consumption. We believe the stock is available at a very reasonable multiple for a company that has substantial growth opportunities ahead, a strong market position and a healthy balance sheet. Historically energy distribution companies have traded within a range of 8x to 30x on a P/E basis.


Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

XI'AN, China, Jan. 4, 2011 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc.  today announced that it has entered into definitive agreements with several institutional investors for a registered direct placement of approximately $24.17 million of common stock at a price of $7.00 per share. The Company will issue a total of 3,453,572 shares to the institutional investors.

In addition, the Company will issue to the investors warrants to purchase up to 1,726,786 shares of common stock, which, if fully exercised, would provide an additional $12.95 million in gross proceeds to the Company. The warrants have an exercise price of $7.50 per share and are exercisable for a six month and five trading day period commencing six months and one day following the closing date

CBEH raises funds:

XI'AN, China, Dec. 29, 2010 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. today announced that it has entered into definitive agreements with several institutional investors for a registered direct placement of approximately $15.3 million of common stock at a price of $7.00 per share. The Company will issue a total of 2,185,716 shares to the institutional investors.

In addition, the Company will issue to the investors warrants to purchase up to 1,092,858 shares of common stock, which, if fully exercised, would provide an additional $7.65 million in gross proceeds to the Company. The warrants have an exercise price of $7.00 per share and are exercisable for six months following the closing date.

The Company anticipates that the capital raised in this registered direct placement will be used for biodiesel capacity expansion and working capital for wholesale distribution of finished oil and heavy oil products.

GeoTeam® Note: What can we really say? Why offer stock?

• Cash balance of $79.7 million.
• Analyst estimates indicate that 2011 EPS will grow 28.5% to $1.85.
• Just appointed KPMG as auditors.

The company should let these positive developments play out before issuing stock at an absurd PEG ratio of  0.22.  Dilution will only be 8%, assuming conversion of IN THE MONEY warrants.  At least the overhang that this development could have been having on CBEH stock price may be over.

Rodman & Renshaw on CBEH                        12/13/2010

CBEH: Recent Volatility Is Long Term Positive 

Recapping Recent Volatility On December 1, 2010, a short seller published an article challenging the strength in CBEH’s bio-diesel business and generally raising questions on the company’s financial / operational performance. CBEH in turn responded quickly through a press release that provided investors with counter arguments supporting their business model. These developments provided additional volatility to a stock, which is in a space that has tested investor patience in 2010.

Our Take We take a slightly optimistic view of last week’s developments from the perspective of the attention being focused on CBEH by the market. Investors cannot be blamed for becoming cautious as a result of these developments. However, management’s prompt and professional rebuttal indicates a sense of responsibility they have towards all stake holders. Short sellers have essentially compared CBEH to two other US listed Chinese companies, GU (Not Rated) and CCGY.OB (Not Rated), that operate in the bio-diesel business with the implicit assumption that all bio-diesel business models are equal. We believe variances in product quality, pricing, taxes, capacity, licenses, transportation costs, raw material costs, geographic location, customers and contracts can provide for a wide margin of difference between companies who may be operating within the same industry. GU generated gross margins of 43% and 35% in 2007 and 2008 when the business was operating without disruptions and was comparatively less geographically dispersed. In CCGY.OB’s most recent quarter bio-diesel accounted for 14% of 3Q10 sales of ~$16 MM @ ASP of $682 per ton (or 3.2 K tons) vs. CBEH that sold 24K tons of bio-diesel @ ASP of $845 per ton. Clearly, operational circumstances vary for all three companies. However, investors have to decide whether they should reward or punish CBEH for demonstrating operational consistency. We believe that decision will be aided by the company’s move to a big four auditor, which is imminent. In addition the growth in bio-diesel capacity from 50K tons to 200K tons should test management’s ability to maintain margin consistency. We believe the company should see a multiple expansion in its valuation if it comes through on these two fronts.

Maintain Market Outperform: At current levels CBEH is trading at P/E multiples of ~6.1x and ~4.7x to our FY10 and FY11 earnings estimates. These multiples are significantly below the peer group averages of ~19.3x and ~16.4x (includes China and US operating companies). We maintain our Market Outperform rating and highlight CBEH as a vehicle to participate in China’s increasing energy consumption. We believe the stock is available at a very reasonable multiple for a company that has substantial growth opportunities ahead, a strong market position and a healthy balance sheet. Historically energy distribution companies have traded within a range of 8x to 30x on a P/E basis.

Risks 

(1) Supplier Concentration (2) Commodity Price Risk (3) Competition (4) Limited Market for Biodiesel (5) Government 

Regulation.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Since commencing production in its 100,000 metric ton (MT) biodiesel production facility in October 2007, China Integrated Energy has grown its biodiesel business steadily.  During the third quarter ended September 30, 2010, revenue generated from the Company's production and sale of biodiesel was $20.3 million, or 19.0% of total sales, with gross margins of 29.8%. With the recent acquisition of the 50,000 MT biodiesel production facility in Chongqing City and the upcoming completion of a new 50,000 MT biodiesel production facility in Tongchuan City, the Company will double its biodiesel production capacity to 200,000 MT per annum.

The Company believes that it has five primary competitive advantages that have contributed to higher and more stable margins in its biodiesel business: 1) a national license to distribute both heavy oil and finished oil including gasoline, petro-diesel and biodiesel; 2) a proprietary and patented production process that enables its existing 100,000-ton production plant to mix a variety of feedstock interchangeably at any ratio to achieve a high conversion rate from the feedstock and to produce high-quality biodiesel, resulting in the efficient usage of the least expensive feedstocks; 3) long-term relationships with local suppliers that have resulted in the Company's ability to secure a steady source of raw materials, including non-edible seed oil, waste cooking oil and vegetable oil residue; 4) certified Chinese B-100 grade of biodiesel, which enables the Company to sell its biodiesel near parity with petro-diesel market prices; and 5) economies of scale.

Auditor Selection

The Company and the Board recognize the market's sensitivity to the Company's auditor selection process.  Our Board places exceptional emphasis on high corporate governance standards. We have been actively reviewing our auditor selection process in the near future.  

Financial Outlook for 2010

The Company reaffirms the newly updated 2010 guidance with

• revenue of $435 million
• net income of $53.5 million

representing an increase of 50.2% and 41.2%, respectively, from 2009.

China's National Energy Administration (NEA) has formulated a development plan for the clean energy industry, which includes wind, solar, biodiesel and nuclear energy, to receive direct investments totaling $738 billion from 2011 to 2020 to promote the development of clean energy industries in order to meet the carbon emissions reduction targets set by the PRC government by 2020.

Rodman & Renshaw on CBEH

Overview: CBEH reported 3Q10 revenue, net income and EPS of $106.8 MM, $13.7 MM and $0.32, largely in line with our expectations of $107.2 MM, $14.0 MM, and $0.32, respectively. These numbers were also in line with street consensus estimates of $105.9 MM, $13.6 MM, and $0.32 (from FactSet). By business segments, Wholesale distribution, bio-diesel, and retail gas stations accounted for 60%, 19%, and 21% of total revenue, generating $64.0 MM, $20.3 MM, and $22.5 MM, respectively.

Stock Performance: CBEH rallied strongly into earnings gaining almost 11% the day prior. We had raised our estimates for CBEH after our visit to the company last week and the company’s results came in line with our expectations. We believe drivers for the rally may have included expectations of a strong quarter leading to some short covering. In addition, recent developments in relation to going private proposals coming from small cap china companies may have added to the momentum in the stock. The stock should play catch up to recent news flow around acquisition of a new retail gas station and a new bio-diesel facility that provide good visibility into growth drivers for 2011. We expect the stock to trend higher from here as management’s guidance for 2010 may be viewed as conservative by the street. In addition, the company should also be viewed favorably for its cash generation abilities.

Y-o-Y Increase in ASP & Sales Volume: CBEH’s strong top-line growth for 3Q10 was driven by an increase in ASP and sales volume in all the three business segments.

New Bio-diesel Technology Should Aid Margin Improvements For FY11: CBEH management indicated that the new bio-diesel production facility located in Tongchuan City with additional 50,000 tons/year capacity will use the second generation bio-diesel production technology, which is expected to utilize lower cost feedstock and generate same quality bio-diesel product, potentially enabling higher gross margin.

Lowering Tax Rate Assumption: Management indicated a ~0.5% of overall effective tax rate for 4Q10 and ~0.75% for FY11. We lowered our tax rate assumption to ~3.0% from 15% earlier for FY11 (being slightly conservative).

4Q10 & FY11 Estimates: For 4Q10, we are projecting revenue and net income of $118.0 MM, $15.5 MM, with diluted EPS of $0.35. This implies full year estimates of $438.7 MM, $54.0 MM, and $1.24, respectively. For FY11, our revenue, net income and EPS estimates are now $553.4 MM, $70.5 MM, and $1.60 compared to $553.4 MM, $62.0 MM and $1.41 earlier, given a lower tax rate assumption of ~3% for FY11.

Valuation: At current levels CBEH is trading at P/E multiples of ~7.6x and ~5.9x to our FY10 and FY11 earnings estimates, below the peer group averages of ~17.6x and ~18.9x. We maintain our Market Outperform rating and highlight CBEH as a vehicle to participate in China’s increasing energy consumption.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Third Quarter of 2010 Financial Results, from November 4th, 2010

• Sales - For the third quarter of 2010 sales was $106.8 million, increased by 47.5% from $72.4 million in the third quarter of 2009.. The increase was due to strong market demand for finished oil and heavy oil products, an increase in average selling prices, and increased sales by its existing and five new gas stations added from September 30, 2009 to September 30, 2010.  

• Net Income – For the quarter ended September 30, 2010, net income was $13.7 million as compared to $9.9 million in the same period of 2009, an increase of $3.9 million, or 39.2%.  This increase was attributable to economies of scale combined with rapid growth in revenue from wholesale distribution of finished oil and heavy oil products and operation of retail gas stations segments.

• Diluted earnings per share grew to $0.32 from $0.28 in the third quarter of 2009.

Financial Outlook for 2010  

Based on the strong results recorded in the first nine months of 2010, Management expects to report the following for the full year ended December 31, 2010:

• Sales of $435 million
• Net income of $53.5 million

Guidance includes two months of contribution from the newly-acquired 50,000-ton biodiesel production capacity and Shenmu retail gas station, offset by lower-than-expected contribution from the newly-constructed 50,000-ton biodiesel plant due to the delay in the expected completion date.

On October 26, 2010, NDRC increased the retail selling price of gasoline and diesel by RMB 230 or $34.5 per ton or 3.2% and RMB 220 or $33.0 per ton or 3.4%, respectively, when global crude oil price stayed at $82 per barrel.

Business Outlook for 2010

China Integrated Energy, Inc.'s management plans to focus on growing each of its three businesses - biodiesel production, wholesale distribution, and retail gas stations with a focused expansion on biodiesel segment. On the wholesale distribution and retail side, the Company benefits from its advantageous location, well-established supplier relationships as well as an extensive distribution network that has valuable railway access to reach remote parts of China that other distribution companies cannot currently reach. China Integrated Energy is the only non-state-owned integrated biodiesel producer with a distribution license in China. Including the Shenmu retail gas station acquired on October 19, 2010, the Company operates 13 gas stations surrounding Xi'an city.

The Company is also doubling its current biodiesel production capacity of 100,000 tons to 200,000 tons once the newly-constructed 50,000-ton biodiesel production facility in Tongchuan City, Shaanxi Province commences testing and ramp-up of production in December 2010. The Company anticipates spending approximately $15 million in capital expenditures to accomplish this goal. The Company has secured enough raw materials to supply 150,000 tons of capacity in Tongchuan City, but will also continue to work towards securing more long-term sources of raw materials and new technology in the bio-energy field. On October 22, 2010, the Company executed a definitive agreement to acquire Chongqing Tianrun Energy Development Co., Ltd., a biodiesel production facility with 50,000 tons of biodiesel production capacity. The Company believes that profit margins of the acquired company are similar to its current biodiesel production. The acquisition costs approximately $16.5 million. The Company continues pursuing strategic acquisitions that will quickly provide financial benefits to us. Furthermore, the Company continues to invest in developing new biodiesel production technology to further increase the flexibility in feedstock for its plants and to reduce raw materials costs.

"We are executing well on all phases of the growth strategy we have communicated to shareholders. Through the first nine months of 2010, we have witnessed broad-based growth in each of our three business segments. Our strong balance sheet and cash flows afford us the ability to augment organic growth with timely acquisitions such as the Shenmu retail gas station and Tianrun biodiesel plant. We will continue to gain market share by further penetrating our existing footprint and methodically expanding into new territories with China. With clear competitive advantages, a focused growth strategy, and an experienced management team, China Integrated Energy is well positioned to capture additional growth in the Chinese domestic energy market." Concluded by Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc.

Rodman & Renshaw on China Integrated Energy

Tongchuan Bio-diesel Production Facility: We visited CBEH’s bio-diesel facility and the company’s largest retail gas station on October 19, 2010. The bio-diesel production facility, located in Tongchuan City, Shaanxi province, is currently in the process of adding its Phase 2 bio-diesel production, including feedstock warehouse, main reaction/production line, and a new R&D center. Mr. Zhao, manager of Tongchuan facility, indicated that compared to the current bio-diesel production process, the Phase 2 will potentially be utilizing lower cost feedstock including wood chips, and other non-edible plants, possibly generating higher gross profit margin. Phase 2 is expected to bring in additional 50,000 tons of capacity. 

Jinzheng Retail Gas Station: Jinzheng Branch, located in Xianyang City, Shaanxi province, is currently the company’s largest retail gas station, with monthly sales volume of ~800 tons. This branch was acquired by CBEH in November 2009 and opened in December 2009. Manager of Jinzheng Branch told us that this station is the only gas station within the radius of 3km, and the average selling price is 0.01~0.02 RMB cheaper than PetroChina (PTR, Not Rated)’s gas/diesel. 

Key Takeaways: We believe these developments and the near completion of the new bio-diesel facility should provide investors with comfort around growth drivers for 2011. Investors will also be monitoring how management can take advantage of the company’s vertically integrated distribution strategy in regards to the governments moves towards a market based pricing mechanism for energy consumption. We maintain that the company’s bio-diesel segment should be a beneficiary of China’s efforts to diversify its reliance on traditional energy sources. Growth in western China and the associated spur in demand for vehicles in China should continue providing support to CBEH’s business model. 

Raising Estimates: We are increasing our projections for 3Q10 revenue, net income and diluted EPS to $107.2 MM, $14.0 MM, and $0.32 from $97.7 MM and $13.0 MM, and $0.30, respectively. For the full year FY10, our estimates are raised to $439.1 MM, $54.3 MM, and $1.24 from $425.7 MM, $52.3 MM, and $1.20, respectively. Management also reaffirmed its full year FY10 revenue and net income guidance of $425 MM ~ $430 MM, and $52 MM ~ $52.5 MM. 

We are now introducing our FY11 estimates. We are projecting revenue, net income, and EPS of $553.4 MM, $61.9 MM, and $1.41, respectively. This implies a 26.0% Y-o-Y growth in top-line and a 15.1% gross margin.

Valuation: At current levels CBEH is trading at P/E multiples of ~6.7x and ~5.9x to our FY10 and FY11 earnings estimates. These multiples are significantly below the peer group. We are comfortable maintaining a $12.50 price target on CBEH, which translates into P/E multiple of ~10.1x and ~8.9x to our estimates for FY10 and FY11.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

The foundation of China Integrated Energy's future growth strategy includes expanding and diversifying the Company's base of customers and suppliers for finished oil and heavy oil products, expanding its wholesale and retail distribution network through organic growth and potential acquisitions, while further increasing and enhancing its higher margin biodiesel production capacity.

The Company plans to expand its current biodiesel production capacity of 100,000 tons to 200,000 tons by bringing a new 50,000 ton biodiesel production facility in Tongchuan City online by the end of third quarter and completing an acquisition for 50,000 tons of biodiesel production capacity, which is anticipated to close before or on September 30, 2010. The Company anticipates spending approximately $31.5 million in capital expenditures to accomplish this goal. China Integrated Energy has secured adequate raw materials to accommodate this new capacity, including new feedstocks, and will continue to work towards securing more long-term sources of raw materials.

"We are witnessing the benefits of our strategic growth strategy gain momentum. Our wholesale distribution business continues to benefit from higher demand for all types of oil. By steadily growing sales from existing customers and expanding our distribution network beyond the geographic footprint which encompasses more than 640 million people we reach today, we are poised to gain additional market share. We are currently operating at full capacity with our current 100,000-ton biodiesel production plant and expect to drive incremental growth by adding 100,000 tons of capacity for this high margin, high return business. We will leverage our proprietary biodiesel manufacturing process and new technologies to further improve operating efficiencies and drive margins higher. Our retail gas stations, which historically have benefited from higher retail gas prices set by the NDRC, will maintain a structural cost advantage to our competitors, regardless of where prices are in the future. In conclusion, we are very confident in our ability to successfully execute our growth plan in the short and long term."

Financial Outlook for 2010

For the full year ending December 31, 2010, management now expects revenues of $425 million to $430 million, and net income of $52.0 million to $52.5 million, representing an increase of 46.8% to 48.5% and 37.2% to 38.5% respectively from 2009. Guidance includes an additional 50,000 tons of annual biodiesel manufacturing capacity expected to come online during the fourth quarter of 2010 and the lease of three additional retail gas stations. Management reserves the right to revise guidance in the future.

As the GeoTeam® speculated, in its research note on August 5th, China Bio Energy was able to exceed analyst estimates.  The company reported earnings per share of $0.25 compared to an estimate of $0.19.  CBEH also reaffirmed its previous guidance. 

We should note that we had made an error in our last research note when we stated:

Additional upside may arise as China Bio's guidance does not include the planned acquisition or lease of additional retail service stations.

In fact China Bio Energy guidance had included:

"the addition of 50,000 tons of incremental biodiesel production capacity expected to come online during Q3 2009 and include the planned acquisition or lease of additional retail gas stations."

The current reaffirmed guidance assumes the following:

Guidance includes the addition of 50,000 tons of incremental biodiesel production capacity expected to come online during Q4 of 2009 and include the planned acquisition or lease of additional retail gas stations.

The GeoTeam® has provided potential valuation scenarios for CBEH.

Source: PR Newswire (August 11, 2009)

Valuation Scenarios

Added to GeoSpecial list on June 1, 2009, ($4.25). 

Data Inputs:

Fiscal Year Ends in December

^a CBEH is not paying a full U.S. tax rate.  Therefore, all EPS numbers have been adjusted by the GeoTeam® to reflect a U.S. tax rate of 36%.

^b EPS numbers are non-GAAP. Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time,  differ from company supplied figures.

Short-Term Valuation Scenarios

'We are pleased with our results for the second quarter which was driven by strong growth in our distribution segment and sales from our retail gas stations,' stated Mr. Gao Xincheng, Chief Executive Officer of China Bio Energy Holdings Group. 'We believe that several fundamental factors, including increasing demand for commercial and passenger vehicles and a shortage of domestic oil resources, will continue to drive future revenue and earnings growth for our Company.

Management has reaffirmed 2009 guidance.

Source: PR Newswire (August 11, 2009)

China Bio Energy (NASDAQ:CBEH) shares are rising today, approaching a 52-week high. The GeoTeam® coded the stock as a GeoSpecial on June 1, 2009 ($4.25).   We are speculating that it is quite possible that the company may be able to exceed its previously stated guidance. 

Why?

The company announced its 2009 business outlook at a time when oil prices were much lower than current levels. China Bio Energy manufactures biodiesel, a commodity with pricing that should move in concert with oil.

Additional upside may arise as China Bio's guidance does not include the planned acquisition or lease of additional retail service stations.

China North East Petroleum Holdings (AMEX:NEP) is another company that some investors have speculated will also benefit from higher oil prices.

'We are very pleased with our results for the first quarter which was the culmination of strong growth across all three business segments,' stated Mr. Gao Xincheng, Chief Executive Officer of China Bio Energy Holdings Group. 'Despite a current environment of lower oil prices in China and worldwide, we believe that several fundamental factors are firmly in place which will drive future revenue and earnings growth for our Company. These include China's increasing demand for energy to accommodate future organic domestic growth, which will benefit directly from the stimulus plan, an increase in utilization of both consumer and commercial vehicles, a shortage of domestic oil resources and dependence on foreign sources, in addition to government initiatives to increase the utilization rate for alternative fuel while decreasing pollution emissions.'

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b Non-GAAP EPS figures generally exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.

^c China Bio Energy did not provide earnings per share guidance. The GeoTeam calculated an implied EPS figure based on a fully diluted share count of 36 million.

^d Guidance includes the addition of 50,000 tons of incremental bio-diesel production capacity expected to come online during Q3 2009 and includes the planned acquisition or lease of additional retail services stations.

China Bio Energy Holding Group Co., Ltd. Investor Presentation, filed on March 24, 2009

China Bio Energy Holding Group Co., Ltd. Investor Presentation, Filed July 7, 2008