Euro Tech Holdings Company Limited

Euro Tech Holdings Company Limited CLWT was on a bull ride for the second successive day moving up by 45.01% to $5.38 after having gone up by 37.1% yesterday. The stock was among the top gainers of the day, with a 52 week high volume of 103808. CLWT was highly volatile during the early hours of trade but went on to become range bound with time.

Being an Industrial goods sector company focuses on marketing and trading pollution and treatment control instruments, these instruments includes process controlling and testing machines that help to limit the pollution level in air and water, and disinfectant equipment to purify waste water. They also manufacture air and water analytical instruments and testing equipments which include highly advanced instruments like infrared photometric oil analyzer (IPOA), chemical oxygen demand (COD) analyzers, total organic carbon analyzer, turbidity meters, total suspended solid analyzers, dissolved oxygen analyzers, and various types of spectrophotometers. . They supply instruments through retail shops and sales offices, in Honkong and China; besides manufacturing, marketing and distribution they also undertake engineering projects related to waste water treatment.

CLWT on January 12,2012 announced that they would effect a reverse stock split with a ratio of 2 for 11 at 5:00 Pm New York Time January 13, 2012, the news also came in with a postscript that an additional ‘D’ would be added to the ticker symbol once the reverse split is effective. However, the company officials today corrected their previous announcement by stating that there will be no change in the ticker symbol. It was this news that steered the stock prices through the roof in last two day.

Last year NASDAQ.OMX issued a deficiency letter to CLWT stating that the company had failed to maintain the bid price per ordinary share at $1.00 which was a requirement to stay on NASDAQ.OMX. Given this situation CLWT had to push its stock price up, to prevent getting delisted from NASDAQ.OMX, so they decided to go for reverse stock split of 2 for 11that is they issued 2 new shares per 11 old shares. The closing price of CLWT on January 13, 2011 was $2.97 which means the stock price should be approximately 5.5 times $2.97 after reverse split price adjustment; however the projected figure is still far away from the current stock price.

Looking at the past results Euro Tech. has been a significant underperformer. The year ended 31 Dec 2010 was not a fruitful year for Euro Tech, its revenues declined by 18.31% to 22.3M (yoy basis) which was a second successive fall in yearly revenues. Also in recent times their performance is poor in comparison to their competitors like Donaldson Company, Inc (DCI). Extrapolating the past performance not much is expected from the results of 2011, however the status of financial results for the year 2011 is still expected.