Four foreign firms worth a flutter

Bateman Engineering (BATE)

This 85-year-old South African engineer is a great way to play the resources boom without having to decide which of many new mining projects will succeed.

Last year, it worked on 120 contracts of $100,000 or more. The largest were at Kenmare's MOMA heavy mineral sands project in Mozambique, for which Bateman is establishing a processing facility; the construction of South Africa's longest curved overland belt-conveyor at the Sasol-Kriel Colliery; and the replacement of the existing primary crushing system at De Beers' Venetia mine.

Its minerals and metals division is one of the world's top engineering project houses, and Bateman Engineered Technologies supplies environmental protection, bulk-materials handling and water and effluent treatment equipment and spare parts.

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A new unit, Bateman Power and Energy, should benefit from South Africa's power requirements; and a recent acquisition, Atoll, gives Bateman the expertise to recover metal from waste.

Bateman has an unrivalled technical knowledge that is in demand the world over. Last year, 62% of revenue was generated in South Africa, but expansion is gathering pace and last month Bateman won its first contract in China.

At first sight, the shares look expensive, but this conceals the fact that Bateman's conservative accounting treatment does not recognise any profit until a contract is 20% complete. So the trebling of its order book in the last three years is only just starting to show through in its profits.

Also, following last year's Aim fund raising, Bateman has the financial strength to benefit from the shift away from cost-plus contracts to Lump Sum Turnkey contracts, which carry higher margins. CEO Dr Sivi Gounden has said, "The sector is now enjoying boom conditions after many years of very dull trading and underinvestment in the 1990s in the early part of this decade." We agree and Bateman looks set for a long period of rising profits.

Software Quality Systems AG (SQS.L)

In December 2005, SQS became the first German firm to have its primary listing in the UK, placing 5.7 million shares at 190p they are now 212p. CEO Rudolf van Megen and chief operating officer Heinz Bons began to investigate methods for the improvement of software quality while at university in 1977, founding SQS five years later. They concluded that the high number of undetected flaws in software was largely due to a failure to adopt a systematic approach to its testing.

The firm is now the largest independent European provider of software testing and quality-management services. The IT professional services division brings in 92% of its revenue here, the majority of it services are provided under cost-plus contracts, while a small but growing number are result-related.

The balance of revenues comes from IT training, the sale of tools and licenses that help customers test their own systems, and from hosting testing events.

According to the Standish Group consultancy, 70% of software implementations either fail altogether or don't achieve what they should. Companies are now recognising the importance of software testing, and SQS is growing at three times the 4%-5% rate of the wider IT services market.

Customers include Deutsche Bank, Daimler and Vodafone, and a 20% increase in attendance at SQS's latest conference in London is proof that software testing is high on the corporate agenda.

SQS is planning to boost its staff numbers by 20% this year in anticipation of faster growth, which is not reflected in its currently modest p/e ratio of just 11.

Bodisen Biotech Inc (BODI.L)

With 1.3 billion mouths to feed and an increasing demand by the middle classes for healthy food, China is determined that its 900 million farmers boost its crop yields. They are turning to Bodisen Biotech Inc, a firm whose shares are traded on Amex and Aim.

Located in Shaanxi Province, the economic centre of the vast Western Regions of China, Bodisen produces over 60 bio-based, fully degradable proprietary product lines, consisting of various plant nutrients and minerals and vitamins that improve the conditions of soil and water.

The result is a 10%-35% improvement in crop yields. This boosts farmers' income, especially as it allows them to brand their products as "certified organic green foods", which typically earn a 50%-200% retail mark-up. Bodisen is at the forefront of agricultural progress.

Its environmentally friendly manufacturing practices have been widely cited in the Chinese media and proof of government approval comes in the form of Bodisen's tax-free status.

In January, Bodisen was ranked as the 16th fastest-growing company in China by Forbes China and it has since reported 91% revenue growth last year, and net income of $8.8m. Yet its revenues of $31m barely scratch the surface of a grain market worth $17bn.

The share price trebled last year and after a period of profit taking is now on the rise again. Bodisen has massive potential as have its shares.

Solar Integrated Technologies (SIT)

Los Angeles-based Solar Integrated Technologies makes photovoltaic roofing systems, which double as both a roof and a source of solar power.

The use of photovoltaic cells to convert sunlight into electricity is a well-established technology, but what SIT has done is to fuse lightweight flexible photovoltaic solar cells onto industrial fabrics, creating a solar roof that can be rolled up like a carpet.

The product is easy to fix and transport and its flexibility means that it can even withstand being dropped from a plane or helicopter. This makes it ideal for use in tents for disaster relief or military operations in remote locations.

But the main source of revenue is from roofing systems for large-scale buildings, and with the state of California pushing to generate 20% of its energy from renewable sources by 2017, it has found early adopters close to home.

SIT has roofed Coca-Cola's bottling plant in Southern California, and PepsiCo adopted an SIT roofing system for the Los Angeles distribution centre of its snack food subsidiary Frito-Lay. The public sector has followed suit and SIT has completed installations for the City of Santa Monica, San Diego Police Department and the San Diego City Schools.

This technology is now spreading beyond California. Last year, SIT completed 39 industrial solar roofing projects, bringing its total to 58, aggregating more than 5 MW of installed generating capacity. It has completed projects in Arizona, Nevada, New York, Texas, Germany and Spain, and recent clients include Wal-Mart and Honeywell.

SIT reckons California could generate 15% of its peak-time electricity demand from its 3.6 billion sq ft of flat, or gently sloping industrial roof space, while globally it estimates a potential market of $100bn. Having pioneered the concept, SIT is beginning to reap the commercial rewards: its shares have much further to run.