Golden Dragon Holding Inc. (PINKSHEET: GDHI)

Golden Dragon Holdings Inc. (GDHI) is an international importer, exporter, distributor and seller of complete line of supermarket goods, including staple, organic, specialty, gourmet foods and beverages to Asia and the Middle East. The Company operates through its subsidiaries Golden Dragon Food & Beverage Import & Export Co. in Hong Kong and Beijing Flying Golden Dragon International Trading Co. Ltd. in China.

Incorporated in 1992, the Company is headquartered in Beijing, China.

Source: Reuters.com, SEC Filings.

Financial Summary

Source: Reuters.com, SEC Filings.

Analyst Consensus

No analyst rates shares of GDHI at this time.

Investment Highlights

GDHI is an international importer, exporter, distributor and seller of complete line of supermarket goods, including staple, organic, specialty, gourmet foods and beverages to Asia and the Middle East. The Company operates through its subsidiaries Golden Dragon Food & Beverage Import & Export Co. in Hong Kong and Beijing Flying Golden Dragon International Trading Co. Ltd. in China.

Overview of Major Factors Affecting the Company

The Company’s revenue and profitability mostly depends upon the strength of the Chinese economy, employment, income gains and favorable consumer spending habits of the Chinese. Since China’s economy functions through a centralized, command structure dictated from Beijing bureaucrats, decisions made at the highest levels of government profoundly affect various industries and investment flows within China.

Analysts familiar with the intricacies of Beijing economics and politics state that due to the structural trade imbalances between the West and Asia, especially China, Beijing has altered its strategy for its economy that includes infrastructure and other domestic spending initiatives to offset declining export revenue. The goal of relying less upon export while simultaneously encouraging domestic spending at home has been, so far, successful to facilitate sustained gross domestic product (GDP) growth while the West transitions from a debt-driven/ consumer-based economy to a production/ export-based economy. U.S. consumer spending, for example, contributes more than 70% of U.S. GDP, while China consumer spending contributes less than 50% of China’s overall GDP, an unsustainable imbalance on a long-term basis between two major trade partners.

At some point Beijing will allow its currency, the Renminbi (RMB), to appreciate against all major currencies as the West/East trade imbalances adjust to a more sustainable level, giving holders of RMB increasing purchasing power for imported goods. An artificially low RMB/Dollar peg creates monetary inflation and asset price inflation within China, fostering civil unrest and poverty. Upward movement in the value of the Chinese currency fosters domestic consumption of foreign goods in China.

Continued Chinese GDP growth, income gains and increased purchasing power amongst its workers create increased demand for imported goods from the United States, Europe and other OECD countries offering mature and value-added products popular in the West. The Company, therefore, is positioned to benefit from a two-decade long trend toward rectifying trade, consumer purchasing power and living standards imbalances between ASEAN and OECD countries.

Recent Company News

On February 1, the Company announced that it has entered into various agreements with China Resources Enterprise Ltd., aka/ Vanguard Group. Vanguard Group operates more than 2,600 supermarkets, Hyper Markets and specialty stores throughout China and Hong Kong. The initial agreement includes supplying the smaller V’Ole Gourmet Supermarkets chain in Beijing.

The Company said that the initial contract to supply the V’Ole Gourmet Supermarket chain serves as a performance test of the Company’s ability to supply Vanguard’s large chain of supermarkets operating throughout China and Hong Kong. The Company also said that it is in negotiations with Vanguard to supply the rest of the more than 2,600 supermarkets, VnGO convenience stores and Hypermarkets (China’s closest version of a Wal-Mart).

Technical Analysis

Source: http://stockcharts.com/h-sc/ui?s=GDHI

GDHI trades above its 13-day moving average. This bullish sign is significant because the 13-day moving average is upwardly sloped.

The MACD for GDHI currently indicates a bullish signal. The MACD is above the signal line, a 9-day moving average of the MACD. The MACD is above the critical level of 0, which implies the past price action had been positive. Overall, the chart is bullish.

Comparative Analysis

GDHI has no direct competitors or no adequate information of direct competitors is available at this time.

Insider Trading Activity

Source: Yahoo Finance

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