China Integrated Energy (CBEH) has signed a non-binding letter of intent to acquire the assets of Hainan Lin Gao Chemical which includes the land and facilities to provide a place for CBEH to build a 300K ton biodiesel plant.  The company is expected to close on the $9 million deal by the end of this quarter and begin production with an initial capacity of 100K tons within a year from the close.  The facility will focus on biodiesel from bagasse which is the fibrous residue from sugarcane stalks.  CBEH closed on a 50K ton biodiesel facility back in October.  This deal provides the potential to double production capacity from 300K to 600K tons in the next few years. 

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“We are excited to announce this LOI to acquire the assets of Hainan Lin Gao Chemical, where we plan to build a new second generation biodiesel plant,” stated Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. “With our track record of expanding our biodiesel business profitably, we believe that this purchase will help us solidify our position as a leader in the renewable energy sector.”

In my opinion CBEH is offering a compelling entry point down at current levels and is in the process of breaking out of a downtrend off the November highs.