The one-two combo of being a China green stock has proved to be a winning combo of late and one such stock is relatively off the radar.  The company is SmartHeat (HEAT). The stock broke out of a base Monday with heavy volume ahead of its earnings report this morning.  The results?  The company posted a quarter over quarter EPS surge of 267%.  Granted, it’s a very small company, but that may not be the case for long.  They build heat exchangers and temperature meters that allow companies to increase their energy efficiency which reduces costs and emissions.  Again, a winning combo.

Said the CEO of its earnings report: “Our strong 2nd quarter financial results reflected management’s excellent execution of our growth strategies in a favorable market environment for our industry. Due to China’s effective implementation of its economic stimulus plan in which the energy savings industry was particularly supported by the Chinese government as a sector that receives significant funding allocations, China’s heat energy savings industry has not been negatively impacted by the current global economic slowdown. As a market leader in this space, we believe SmartHeat will continue to deliver consistent and rapid earnings growth in the foreseeable future.”

The company is entering what is their seasonally strongest quarter and the company is raising revenue guidance to $35 million and net income guidance to $6.8 million.  That would be a record for the company.  The CEO also believes the rapid growth will continue well into 2010 as a global recovery takes place.