Knobias Clip Report (9-7-2007)

Submitted from Knobias ClipReport

Friday’s session saw some names jump on news that had a few precursors that might have tipped off investors to the catalytic announcements which were forthcoming. Keen investors were already in the names and were waiting on the future announcements.

China Technology Development Group Corp (CTDC) is engaged in information network security in the People's Republic of China. The Company also operated in the nutraceutical field in China. The Company had little experience in both since they entered the Internet related field in June of 2000 and then added the nutraceutical related business in October 2005.

Because of the lack of experience and a disagreement between the Company and its general manager of Anji Bio, the nutraceutical operations were decided to be discontinued at the beginning of 2007, going forward solely as a network security firm. It was also noted that the disagreement had still not been resolved and that the two were still in negotiations in relation to settlement terms meaning another write off could be in the future.

In place of the nutraceutical operation and in an attempt to possibly diversify, the Company noted that it was entering in a green industry. In the Company’s 20-F filing on June 28th, the Company noted, “On December 22, 2006, we invested in the new plant facility in Zhangzhou Innoessen which was mainly for the Company's new business in the green industry which encompasses widely-used-eco-friendly technologies, however, this is still under construction.”

This statement was a bit fuzzy because it was originally thought that the Company was going to use the facility for the production of their nutritional supplements using eco-friendly technology, hence the ‘green’ description. Evident by the press release on Dec. 20th noting the investment agreement for the land, it was noted the use of the facility was to be used for nutritional products.

Another hint to their recent decision was announced on Wednesday when the Company announced that China Biotech Holdings Limited, the largest shareholder of the Company, entered an agreement to 1,000,000 common shares of CTDC from Beijing Holdings for an aggregate consideration of US$4 million. After the completion which is expected to take place on or before December 15, 2007, China Biotech will increase its stake from 24% to nearly 32%.

Mr. Zhenwei Lu, Executive Director of China Biotech as well as President of China Merchants Technology Holdings Limited commented in the press release, "We believe that by continuously increasing the stake in the Company, this demonstrates our firm support to the Company's upcoming business development and rapid growth in eco-friendly industry."

Between the time the Company decided to discontinue the nutraceutical operations in late December 2006 and the 20-F filing in June, the Company decided to enter a green industry and made the official announcement Friday of a change in their business strategy to the solar energy sector. To facilitate the transition, the Company announced that it also had established a strategic partnership with a leading solar energy solution provider. The Company will introduce the technology developed by Terra Solar Global Inc.

On the announcement, shares gained some 29% on over 8.6 million shares traded. The solar area has become a fairly hot buzz sector with many Chinese domiciled names residing at the top of the list for highest market caps. While this Company has yet to sell anything solar related and with its little experience and numerous strategy changes, add to the fact the disagreement with Anji Bio has yet to be resolved, and the Company may not possibly warrant valuations as high as Suntech Power Holdings Corp (STP), JA Solar Holdings Co Ltd. (JASO), or Trina Solar Ltd. (TSL). But on the positive side, the Company may already have a facility to operate the solar business and has the backing of China Merchants Group, which is currently the Company's largest shareholder and one of the major Chinese state-owned conglomerate enterprises as well as one of the Big Four Chinese enterprises in Hong Kong. In any event, investors would be wise to watch.


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