HQSM - thanks Julius. It's a pick of several well respected posters on The Microcap Kitchen on SI as well as the Value Microcap board on RB. These are probably the best places to find microcaps, not ones that go on hype but valuation metrics, but with the risk/reward inherent in micros.
93 million shares o/s
Running about 28 million in revenue and 12 million in income.
History is short and the stock has come down from a PIPE. Given growth or revenue and income, company is now in a position to make dilution a thing of the past.
The company is very receptive to requests for information and I've written to them several times about their prospects and each time have gotten a response that they are committed to enhancing shareholder values.
HQSM Chairman's Letter Confirms Roadmap for Company
Thursday January 20, 11:47 am ET
No Tsunami Damage to Aquaculture; Company Web Site Is Recognized as One of Top Ten in Asia
NEW YORK, NY--(MARKET WIRE)--Jan 20, 2005 -- HQ Sustainable Maritime Industries, Inc. (HQ) (OTC BB:HQSM.OB - News), a Delaware corporation engaged in integrated aquaculture and aquatic product processing, announced today that it has published to its web site an important message from its Chairman, Lillian Wang, confirming the company's roadmap for the future as well as a resume of its performance in 2004. The Company is fortunate not to have received any damage from the recent Tsunami and its web site has recently been recognized by IR Global Rankings
(http://www.irglobalrankings.com/irglobal/html/mostvoted.htm) as one of the top ten web sites of any Asian publicly listed companies. This ranking of public companies is the brainchild of KPMG, JP Morgan and Linklaters, which are concerned about corporate transparency and responsibility. "To be in the top ten for our region for 2005 demonstrates our commitment to good corporate governance," noted Chairman Wang. (A copy of the letter follows.)
About HQ Sustainable Maritime Industries, Inc.
HQ Sustainable Maritime Industries, Inc. is an integrated aquaculture and aquatic product processing company, with operations based in the environmentally pristine island province of Hainan, in the South China Sea. HQ's activities include using renewable ocean resources, practicing cooperative sustainable aquaculture, using nutraceutically enriched feeds and conducting fish processing and sales. Its variety of farmed and ocean-harvested products -- ranging from tilapia and shrimp to squid and red snapper -- are sold around the world. The Company holds HACCP certification from the U.S. FDA and the EU Code assignment of quality, permitting its products to be sold in these international markets; the Government of China as a leading agricultural enterprise has also certified it. It has recently acquired a nutraceuticals and health products company, which is HACCP certified, and produces and sells products subject to stringent laboratory tests certified by the China Ministry of Health. This plant produces nutraceuticals, which enrich feed used by HQ's cooperative aquaculture operations. In addition to operational offices based in Haikou, Hainan, HQ has offices in Montreal, Hong Kong, New York City, Beijing, and Shanghai. (http://www.hqfish.com)
(HQ CHAIRMAN'S LETTER FOLLOWS)
2005 Message to Our Shareholders from Management
To achieve the Highest Quality, we are committed to responsible stewardship of our resources, human and natural; this is key to our business success. The vertical integration of our Company ensures that we will always maintain the quality our consumers and our shareholders have come to expect.
Dear Shareholders:
HQ Sustainable Maritime Industries Inc. has completed another remarkable year of growth. In November 2004 we reported to you the substantial increase in revenues we achieved in our third quarter, due to the expansion of our processing plant and our successful acquisition of Jiahua Marine, a leading nutraceutical company, which brought with it US$7 million in sales. 2004 is now behind us and we will be reporting shortly the full achievements for the year. In this letter, I want to share with you our thoughts about some of these accomplishments and important growth opportunities that seem likely to shape the future of our aquaculture and aquatic products business.
Growth leading to Growth
After an important expansion of our production facilities, HQ recommenced production with expanded vigor and a view to increasing our profile and our reputation for quality among our clientele. We are increasingly successful in selling product at a premium, as customers concerned about consistent quality in aquatic food products accept the fact that "all tilapia are not created equal" and recognize the quality control achieved through the vertical integration of our Company. Moreover, the United States, one of the main destinations for HQ products, has adopted traceability rules. These rules force sellers of retail sales product to reveal the ultimate source of the product. This plays into HQ's important strength of vertical integration. The opening in July 2004 of the European market to Chinese imports of animal products, including shrimps and farmed fish, and the increasing interest in Japan, where traceability is already well ensconced, only enhance HQ's prospects for greater growth.
Strong Basics
HQ's third quarter results -- reporting a revenue increase of 105%, thanks to increased production by our expanded processing plant and our acquisition of Hainan Jiahua Marine Bio-Products Co. Ltd. (see below) -- are a precursor of things to come, as HQ continues to maintain strong financial basics and take full advantage of its increased production capacity in 2004. We expect to maintain strong sales and profits moving forward.
Tsunami support
Asia has been shaken to its soul by the heartbreaking effects of the Tsunami. Senior management at HQ joins with its employees in extending its sympathy to the victims of this unprecedented disaster. Fortunately, China in general and Hainan in particular were not affected.
2004 Accretive acquisitions
Two important acquisitions have marked the year for HQ. One was the acquisition of the minority interests and the transition from being a Joint Venture to becoming a fully owned company in China operating state-of-the-art fish processing. The other acquisition was Jiahua Marine, a leading nutraceutical company, which brought with it US$7 million in sales (more than US$2 million in profits for 2003) as well as the ability to produce naturally sourced feed supplements which reduce dependence on chemicals during the growth cycles of tilapia and shrimp. We intend to achieve in 2005 the production of 100% chemical-free tilapia and shrimp, exceeding the organic standards of U.S. FDA. Our vertical integration will be expanded to include a feed mill, where HQ's American technology partner, American River Nutrition, will share and develop patented formulations to achieve a high-quality feed completely free of fish-meal and chemicals.
More Accretive Acquisitions in 2005
In 2005, HQ expects to confirm an acquisition of additional marketing capabilities in the United States and eventually Europe, which will expand our capability to maintain vertically integrated quality and bring our aquatic products to many more consumers, while we continue to operate from Hainan, the most cost-efficient base in the world for aquaculture and fish processing. We intend to break through the current fragmented model of the industry to set a new standard for aquatic products and bring a harmonious global vision to the seafood industry.
HQ quality
Maintaining the highest quality cannot be achieved by abusing the environment or by depreciating the dignity of its workers. HQ will continue to exemplify the highest standards of social and corporate responsibility in the defense of both the environment and workers' treatment in all of its operations. We believe this is not only good for others, it is good for business as well.
Sustainable, Fair Trade production, and Vertical Integration
HQ stands for Highest Quality. To achieve the Highest Quality, we are committed to responsible stewardship of our resources, human and natural; this is key to our business success. We are vertically integrated in order to control all aspects of our operations -- from the technologies that we share and monitor with our cooperative farmers to our state-of-the-art processing plant, to direct international marketing and branding. This model has hit a nerve with our partners and consumers who recognize that where food products are concerned we can never compromise on quality. Vertical integration is what allows us to assure to our consumers the quality that they deserve.
Kudos to HQ
Recognizing our efforts in social responsibility, socially responsible investment funds currently track our progress globally, as do China play funds and those interested simply in our strong growth achievements and growth potential. In July, HQ qualified for the NAI index (See naichinaindex.com), which provides exposure to a growing Sino-American investment community. In addition, HQ's web site was recently recognized by IR Global Rankings (http://www.irglobalrankings.com/irglobal/html/mostvoted.htm), one of the top ten web sites of any Asian publicly listed companies. This ranking of public companies is the brainchild of KPMG, JP Morgan and Linklaters, which are concerned about corporate transparency and responsibility. To be in the top ten for our region for the 2004 demonstrates our commitment to good corporate governance.
Corporate Governance
We at HQ are conscious of our responsibilities to our shareholders. We are intent on optimizing share value and return on investment per share. We are, furthermore, fully engaged in maintaining the highest levels of corporate governance and transparency in the execution of our duties to you as shareholders. To this end, we have named three dynamic and experienced independent non-executive directors who bring to our Board the skills and vision to maintain strong growth without losing sight of fundamental principles of transparency. As the Company continues to grow, we will seek to mobilize through our Board members the necessary skills to provide the guidance and balance appropriate to our mission.
Employee Options Incentives
We wish to acknowledge the importance of the contributions of our key employees. We therefore established in 2004 an ambitious employee option program, which allows them to share in the benefits of our growth while continuing to contribute their creativity and efforts to the Company over the next three years.
Celebrated Honorary Chairman
In 2004 the Company named Mr. Wang Fusheng as Honorary Chairman. With his nomination, the Company assures itself a link to a lifetime of building strong ties doing business in China and more particularly strong ties to the communities in which the Company operates. Mr. Wang is beneficiary of the Five Star Diamond award for his contribution to the construction of Hainan's first five star hotel. This same award had been given to people such as Donald Trump. Mr. Wang has more than 50 years of business experience and brings with him a network of contacts nourished by years of devotion to principles of fairness and transparency. He currently continues to act as Chairman of Hainan's Chamber of Commerce and is one of the directors of the China-Wide Chamber of Commerce. He has founded public companies in China and has the vision to see the opportunities in China well before others. He is largely responsible for the tremendous success we have enjoyed, and as his daughter and the Chairman of HQ, I hope to continue his legacy.
We welcome any questions or concerns that you, our investors, might have concerning our plans for growth and our partnership with you. Please contact us at hq@hqfish.com.
Lillian Wang, Chairman
HQ Sustainable Maritime Industries, Inc
Contact:
CONTACT:
Norbert Sporns
Chief Executive Officer
HQ Sustainable Maritime Industries, Inc.
Tel. 212-618-1712
Fax: 212-618-1713
Sporns@hqfish.com
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