Press Release:

China Natural Gas, Inc. one of the leading providers of pipeline natural gas for industrial, commercial and residential use and compressed natural gas (CNG) for vehicular fuel in Xi’an, China, today announced its third quarter financial results for the period ended September 30, 2008.

Financial Highlights for the Third Quarter 2008:

– Revenue increased 102.7% year over year to $18.4 million
– Gross profit increased 119.7% year over year to $9.5 million
– Income from operations increased 173.2% year over year to $6.4 million
– Net income of $5.1 million, or $0.18 per diluted share
– Non-GAAP net income of $5.2 million, or $0.18 per diluted share

Mr. Qinan Ji, Chairman and CEO of China Natural Gas, stated, "We are pleased to share our third quarter results with our investors. Despite the non-cash interest expenses incurred in the third quarter, our net income increased 161.8% year over year and 46.2% from the second quarter of 2008. The strong performance speaks to the strength of our business as well as the favorable market environment. In the third quarter, we continued to expand our CNG filling station network. As of September 30, 2008, we had a total of 35 stations, with 23 located in Shaanxi Province and 12 in Henan Province. We have also added 1,107 residential, industrial and commercial pipeline customers since the end of the second quarter of 2008."

Mr. Ji continued, "As planned, we invested approximately $6.9 million in equipment and consulting fees related to our LNG project in the third quarter. We also continued to upgrade our management team with the appointment of Mr. Richard Wu, our new CFO. We remain optimistic about the future and believe we have the right management team in place to continue our expansion."

My comment: Same deal as Hangfeng they just keep plugging along growing the company at triple digit rates. However as long as the worlds stock markets re in the dumps these stocks will stay down. If you are a believer in China and these businesses than this is an excellent time to add to your position or establish a new one. This is not advice.

John Polomny
The Real Deal