A Potential Ground Floor Opportunity With China America Holdings, Inc. (OTC.BB: CAAH)

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A Potential Ground Floor Opportunity with China America Holdings, IncBy: Patrick J. Murphy, Murphy Analytics LLC, a provider of sponsored research coverage on small cap stocks.

China America Holdings, Inc. (OTC.BB: CAAH.OB - News) is a holding company which owns a 100% stake in Ziyang Ceramics Co., Ltd. based in Zhucheng city of Shandong Province in China. Ziyang Ceramics Co., Ltd. manufactures porcelain tiles used for interior residential and commercial flooring and sells through a distribution network of more than 150 distributors across 10 provinces concentrating on major second and third tier cities located primarily in Eastern and Central China.

As an indication of the CAAH growth opportunity, following are comments and forecasts on the key markets and trends for Chinese real estate in general and for ceramic tiles in particular.

Cushman & Wakefield(i) estimates 35% Commercial Real Estate Development Growth for Q1 2011: "Chinese real estate market has gone through a year of stringent controls in 2010. In the first quarter of 2011, the commercial property market in China witnessed new highs in the office, retail, industrial and investment markets. In the first two months of 2011, total volume of investment in real estate development grew by 35% year-on-year. Despite the government's tightening control of the property market, the pace of the real estate development in China is still accelerating."

SouFun Holdings Limited America reports record revenue for Q3 2011: As another indicator of the growth of the Chinese real estate market, SouFun, which operates the leading real estate internet portal and home furnishing and improvement website in China, continues to report substantial growth. For Q3 11(ii), SFUN reported that quarterly revenue of $109 million nearly doubled over Q3 10. The Company also reported that revenue grew 116% from 2008 - 2010(iii). Marketing generated 75% of SFUN 2010 revenue, and includes traditional Internet advertisements such as banners, links, logos and floating signs, as well as featured promotions. As an illustration of the types of operators that are active in the real estate sector, SFUN reports that its customers consist of the types of customers also likely to be tile purchasers, including:

• real estate developers
• real estate professionals, such as agents and brokers
• retailers and other suppliers of home furnishing and improvement products and services
• home design, decoration and re-modeling companies
• banks offering residential mortgage loan products

Growth in China's Tile Market: Mohawk Industries , a leading U.S. flooring company, estimates(iv) that China's tile market grew 15.6% annually from 2005 to 2009, when annual sales reached 59,200 sq. ft. in sales in China.