Dutton Associates Announces Investment Opinion: China Direct Strong Speculative Buy Rating In Update Coverage By Dutton Associat

  
    
  
  
    
      Dutton Associates updates its coverage of China Direct (OTCBB:CHND) 
      maintaining a Strong Speculative Buy rating and a higher $8.04 price 
      target. The 14-page report by Dutton senior analyst Stanley Ng is 
      available at www.jmdutton.com as 
      well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other 
      leading financial portals.
    
    
      China Direct recently announced its financial results for the 2Q and 
      first-half ended June 30, 2007. Total revenue of $71.4 million for the 
      first half represented 53% of our full year estimate in our initial 
      report released in mid May, while net income of $4.1 million exceeded 
      our initial forecast by more than 40%. China Direct Consulting and Chang 
      Magnesium were the two star-performers and profit centers, providing the 
      major surprises on the upside in the first half of 2007. Meanwhile, the 
      quarter-on-quarter 30.8% increase in revenue and 21.2% rise in net 
      income in the second quarter reflected management’s 
      successful execution of China Direct’s 
      business model by implementing Western style management to increase 
      sales and improve operating efficiency of the newly acquired operating 
      subsidiaries. As a result of the stronger-than-expected financial 
      results in the first half of 2007 and the current outlook for the 
      remainder of the year, management has further raised its financial 
      guidance of revenue in excess of $150 million from the previous estimate 
      of $120 million. Based on six months results, we are prompted to 
      aggressively upgrade our overall revenue and net income forecasts for 
      both 2007 and 2008 with diluted EPS forecast at $0.47 in 2007, rising 
      42.6% to $0.67 in 2008. We have substantially upgraded our 12-month 
      price target from $5.52 to $8.04.
    
    
      About Dutton Associates
    
    
      Dutton Associates is one of the largest investment research firms in the 
      U.S. Its 31 senior analysts are primarily CFAs, and have expertise in 
      many industries. Dutton Associates provides continuing analyst coverage 
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      The cost of enrollment in our one-year continuing research program is US 
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      and requisite Research Notes. Dutton Associates received $35,000 from 
      the Company for 4 Research Reports with coverage commencing on 
      5/15/2007. We do not accept payment of our fees in company stock. Our 
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      report accurately reflect the analyst's personal views about the subject 
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      compensation received by us is in any way related to the specific 
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