BUY Recommendation-NINE

Ninetowns Internet Technology Company Limited. (NASDAQ–NINE)
Closing price January 22, 2010-$1.53

Another China stock for us. NINE has $2.68 per share in cash and a real business, albeit small.

NINE derives a significant portion of its total net revenues from the sale and servicing of iDeclare software packages, Ninetowns’ import/export enterprise software solution. It also has a fledgling on-line grocery business featuring organic/fresh/natural foods.

As of June 30, 2009, NINE had just under $94 million in cash and was slightly profitable. Our valuation is $3.19 per share so it is trading at 48% of our valuation and it trades at 57% of cash.

Revenues are only about $12 million a year, with 70% gross margins.

This is another foreign stock and relatively unknown..

It the stock can get to only trading AT cash value per share, we have a 75% gain.

NINE trades only about 14,000 shares a day, so careful, patient buying is required here..

There are about 35 million fully diluted ADRs outstanding.

About Ninetowns Internet Technology Group Company Limited
Ninetowns (Nasdaq: NINE – News) is a leading provider of online solutions for international trade, with its key services in automating import/export e-filing. Ninetowns has been listed on the NASDAQ Stock Exchange since December 2004 under the symbol “NINE”. More information can be found at .


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