May 17, 2010 (Chinavestor) The honeymoon is over for Rino International (NASDAQ:RINO), a Chinese waste-water treatment and desulphurization equipment maker. The stock fell -11.2% by noon to YTD lows following a disappointing 2010 Q1 financial report. While both revenues and net profits grew on a year-over-year basis, latest numbers are a big disappointment from previous quarter. -------------------------------------------------------------------------------- Part of the big drop is attributed to high expectations, some of it based on the huge order backlog. And while the backlog is still enormous, outsourcing some of it put pressure on margins, resulting in a significant drop in GAAP earnings of $.30 vs. $.50 in last quarter. Non-GAAP earnings were $.60. Back to the numbers: Rino International (NASDAQ:RINO) reported revenues of $47.9 million for the first three months of 2010, compared to $35.6 million 2009 Q1 or $53.01 million 2009 Q4. Net profit attributable to shareholders were $8.5 million or $.30/ADR vs. $.65 in 2009 Q4 and $.50 in 2009 Q1. But share price of the company is in-line with the fall in earnings, suggesting the stock may have hit bottom. The company raised $100 million in 2009 and is expanding capacity by 300% on a new 57.5 acre land in the Dalian Changxing Island Harbor Industrial Zone. The expected completion of the facility is put to May 2011 with Phase I coming on line later in 2010. Assuming the company will make good on it 2010 revenue target of $225 million, current drop in share price makes me want to buy some of its shares.
