The Real Deal by Lloyd D. Ward
Business Insights Beyond the News
March 5, 2019
Vol. 1, Issue 9
Ward Holdings International delegation returned from China last week with great enthusiasm for the investment opportunities we saw and experienced.
In today’s newsletter, I’m going to focus on Snow Carbon, the revolutionary, patent-protected clean-energy cooking product that wowed our delegation for its potential. I’ve been interested in this company and its revolutionary product, Snow Carbon, since first learning about it in December.
But after last week’s visit to The Dingsen Group in Beijing, I am convinced that we have a winner. Given its market, its technology and its timing, Snow Carbon promises an outsized retur n on investment.
Dingsen is going to succeed with or without our capital. But with it, the company can explode. I emphasize timing as a critical factor related to this investment. Here’s why: China banned the production of traditional charcoal in 2017. BBQ and hotpot restaurants are currently using old charcoal inventory, produced prior to 2017. As that inventory expires, restaurants must replace charcoal with gas, electricity – or Snow Carbon.
Today, Snow Carbon has no competition. Restaurants that have tried the product – and many h ave, thanks to an expert and aggressive dealership network – prefer Snow Carbon to gas or electricity.
We had a long and lively discussion with the president and CEO of The Dingsen Group, Mr. Densen Cao. He told us how he will use an investment to scale the business rapidly, grow his dealer network and grab his market share.
He invited six of his dealer/distributors to tell us their stories. In anticipation of zero charcoal inventory, these dealers have been working to convert restaurants from traditional charcoal to Snow Carbon. They each gave a testimonial of the positive responses from restaurants.
We broke for lunch and were served hot pot – powered by Snow Carbon. Imagine a burner, shaped like a witch’s cauldron with boiling water into which we dipped fresh meats, fish and vegetables. It reminded me of fondue – but with water rather than cheese.
Snow Carbon and its maker, The Dingsen Group, is an example of the caliber of investment possibilities that await us in China. Dingsen is a member of the Zanbo Intellectual Capital Eco-system (ZICE), a business network founded and led by my good friend and noted marketing authority Mr. Lu Changquan.
The day prior to our Snow Carbon experience, we attended the ZICE Conference where I presented the keynote address, focusing on building bridges between western capital and eastern opportunities. We also heard presentations by 15 of the top entrepreneurs in the ZICE network.
The company’s involved in the ZICE network represent realistic growth opportunities for U.S. investors. They are all privately owned; they sell tangible consumer products that are easy to evaluate; and they sell products that U.S. consumers will buy.
Their products are everything from everyday staples to disruptive innovations. Among them: popular Chinese dumplings served in school cafeterias, rubber floor mats currently sold in 64 countries (including at Costco), and industrial safety boots for skilled tradesmen and women.
While the products themselves are not high-tech, some do offer unicorn-like opportunities. With ZICE we enjoy a proprietary look and a platform to make moderate investments that can deliver large returns.
Below are impressions of some of the investors who accompanied us to Beijing:
James Francis, “As an investor, the access that WHI and ZICE provide to a qualified cohort of more than 25 well positioned early stage and growth companies throughout China was unprecedented,” said James E. Francis, CEO of Paradigm Asset Management of New York. “The highlight of the trip was the opportunity to take a deep dive into two of the companies, Snow Carbon and Oak Hospitals, that seem poised to become global market leaders in their respective market segments based upon their technology and overall business models.
Geraldine Tigner, private investor: “The WHI trip to Beijing and Hangzhou provided unique insights into the Chinese entrepreneurs and Chinese small-cap business models. The meetings with Zanbo, members of its business consortium, the opportunities to tour Snow Carbon and Oak Alzheimer Hospitals, discuss in detail their historical financial performance and future financial requirements, was a critical part of the due diligence process to evaluate and determine potential investments in the organizations.”