Cleantech Solutions International Inc (NASDAQ:CLNT) Poised For An Upside Revaluation

Cleantech Solutions International Inc (NASDAQ: CLNT) has released quite a bit of news over the last two months. They included the appointment of a new Chief Operating Officer, an agreement with ECrent in China, and a private placement. In addition, the company released quarterly earnings. We will assess all new financial information in this piece for our readers.SourceRecent DevelopmentsFor those who don't know about the company, let's review the business quickly. The company manufactures high precision metal components and assemblies for companies developing clean technology equipment, like wind turbines, and other technologies, which require energy efficient equipment. The factories are located in Wuxi City, Jiangsu Province in China, which is the main reason to explain the fact that the share price massively undervalues the company's financial situation.SourceOn June 7, 2017, it was put out that Parkson Yip will be new Chief Operating Officer. He brings more than 20 years of experience in the IT and Internet industries. He has been Co-chairman and Executive Director of Share Economy Group, and Managing Director for 88DB Hong Kong Limited. Additionally, he has technical expertise too. He has worked as Chief Technology Officer at Guangzhou Ruixin Technology and GeoTel Communications Corporation, which was acquired by Cisco Systems in 1999. On the top of it, he holds a Bachelor of Science in Computer Engineering from Boston University. His talent was highlighted by Mr. Jianhua Wu, Chairman and Chief Executive Officer of CLNT. He used the following words:

"Parkson's breadth of experience in driving the development of sharing economy platforms and M&A in the technology, media and telecommunications sector are a welcome addition to the Cleantech Solutions team. I believe his technical and business acumen will serve the Company well as we pursue new business initiatives and set the stage for future growth" Source

On June 12, 2017, the company put out an agreement with ECrent Capital Holdings Limited, a company focused on the development "of a global rental platform to promote sharing economy across 30 countries and regions." Little was disclosed about the agreements, thus we believe that it is still very early to come to some conclusion about this name. The market obviously did not react to the information. This was the only information released:

"The Company's board of directors plans to form a special committee consisting of independent directors to evaluate and negotiate, on behalf of the Company, the potential acquisition and/or business cooperation transaction(s) with ECrent. The special committee is also expected to engage independent financial and other advisors in connection with such potential transactions. " Source

Finally, on June 21, 2017, the company released that private investors had signed a stock purchase agreement to buy 290,000 shares of the company's common stock at a purchase price of $3.00 per share. The appetite for the company shares became clear in this transaction.Quarterly releaseThe latest quarterly earnings were also released. $4.6 million in revenue was reported, with a gross profit of $0.585 million. However, the most important information noted is the balance sheet. The company is massively undervalued:

• Book Value per share: $46.39
• Cash per share: $1.98

With that in mind, remember that the share price is $4.39 as of June 27, 2017. What does it mean? It means that a rich investor could buy out the company by paying $4.39 to each shareholder; pay the debt and sell the assets for obtaining a return that could be close to 1000%. If we consider that we could liquidate the company and receive the valuation given by the book value, even if we can sell half of the assets, the returns are still extraordinary. For those market participants who like checking the financial accounts, following are the assets reported by the company:Period Ending3/31/201712/31/20169/30/20166/30/2016Current AssetsCash And Cash Equivalents3,470.9552,032.54512,179.62819,771.272Short Term Investments----Net Receivables22,246.99520,397.34217,075.54816,204.966Inventory2,795.0032,394.1792,978.7282,974.023Other Current Assets1,811.4521,768.06858.043864.899Total Current Assets30,324.40526,592.12633,091.94739,815.16Long Term Investments8,657.638,610.759--Property Plant and Equipment29,138.89829,878.67545,982.80847,276.301Goodwill----Intangible Assets5,244.2365,283.6955,584.0273,259.844Accumulated Amortization----Other Assets----Deferred Long Term Asset Charges----Total Assets73,365.16970,365.25584,658.78290,351.305SourceThe following are the liabilities. Note that the company has very little long term debt, and is using its payables to finance its operations. The company does not need financing from banks.Current LiabilitiesAccounts Payable4,339.0831,787.4974,047.9029,379.745Short/Current Long Term Debt2,814.6132,707.0613,118.7313,173.074Other Current Liabilities549.796558.661--Total Current Liabilities7,703.4925,053.2197,166.63312,552.819Long Term Debt----Other Liabilities----Deferred Long Term Liability Charges----Minority Interest----Negative Goodwill----Total Liabilities7,703.4925,053.2197,166.63312,552.819SourceConclusionSeveral good things happened recently. First of all, the company acquired talent by hiring a new COO, who brings extensive experience to Cleantech. Additionally, new partners are signing agreements with the company. ECrent Capital Holdings Limited is negotiating a deal with the company and private investors recently signed a stock purchase agreement. These type of announcements increase the credibility of CLNT, thus we appreciate them. We keep thinking that the company is extremely undervalued. American investors are undervaluing the stock price because it is a Chinese company. We believe that it is a mistake, and some other market participants have already made interesting returns. To sum up, check the new announcements, the company is surprising the market and looks poised to continuing doing so.Be sure to check out our coverage on CLNT. We will be updating our subscribers as soon as we know more. For the latest updates on CLNT, sign up below!Image courtesy of FlickrDisclosure: We have no position in CLNT and have not been compensated for this article.