SovGEM’s chief executive Hugh de Lusignan is very excited about the rapid growth potential of his many investments in growing, ‘highly profitable’, Chinese-focused ventures.

SovGEM recently made three new speculations, worth a combined £430,000: high-margin DVD manufacturer Infosmart, looking to develop DVD that can record high-definition TV; AIM-listed Renesola, which smelts down old silicon wafers for recycling into silicon for solar panels; and Chinese iron ore play London Mining.

For those worried about exchange rate changes and other export risks, de Lusignan maintains the company’s focus is on businesses providing for Chinese domestic demand. A perfect example of a domestic-focused enterprise is Synosoft, the AIM-listed provider of software that helps Chinese exporters claim back their export tax. SovGEM invested pre-float at 19p and has already sold some at a profit but the current holding, down on plenty of other profit-taking and contract delays, should benefit from Synosoft’s full roll-out in 2007.

Unlisted investments include pharmaceutical and neutraceutical investor AOB – ‘where first half revenues flew up 94%’ – and the forestry outfit Tynda run by mining expert Peter Hambro’s, which is operating on the Siberian-Chain border and is likely to float on AIM ‘next year’ when it completes a merger ‘that will make them huge players’. Another interesting play is China Natural Gas, rolling-out gas stations throughout the country to consolidate a splintered market, and pry locations away from ‘Mom and Pops’ and local governments. Finally there are three oil and gas stakes and one in a New York-based advertising agency.

Now fully invested, the company’s present capitalisation values it at just over half its 20.25p net asset value per share. This does not seem justified, as de Lusignan has irons in 12 different fires and an exit from one of SovGEM’s initial forays demonstrates the red-hot potential: this was the final sale of shares in biotech firm Bodisen at $20 – quite a improvement on the initial purchase price of $2. Worth a flutter.

SovGEM	AIM	£1.94m	8.50p	0.00p
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