more upside to come.

Australia's main coal testing, non destructive testing, and hydraulics service provider CCI Holdings (CHL) has survived a hostile takeover bid from mining services company Campbell Brothers Limited (CPB). But you can be sure Campbells will not be going away. The company intends to accumulate 3% of CHL over the next 6 months to add to it's 21% holding achieved after it's 35c cash offer closed a couple of weeks ago.

This will see CPB purchase 4M shares over the next 6 months, which will no doubt be very positive for a thinly traded stock like CCI.

However other growth factors point towards a stellar period for this former ugly duckling of the now booming coal mining services sector.

Firstly, the long awaited port and rail infrastructure expansions are now beginning to come on stream, with higher tonnages to be exported through all the major coal ports of which CHL has the lions share of 45% of the certification testing work. the board in the annual report indicated coal volume growth would be very strong for calander 2007/8.

Secondly, the company is fine tuning it's coal testing automation which is allowing significant savings in operating costs to be made.

Thirdly, the company is scoring large amounts of additional work on already existing contracts in the form of mandatory environmental testing under new statutory regulations. So much so that the company has seperated the environmental testing work and created a new division out of this high growth area.

Fourthly, CCI Pope continues to expand it's diagnostic testing, and condition monitoring services to many industries where large cost savings are being created for clients by analyzing when large critical equipment must be taken out of service for maintenance, rather than performing maintenance on a routine basis.

With the board loudly declaring Campbells 35c offer as grossly underpriced, and forecasting 06/07 EPS of 3.5c, the CHL shareprice looks set to outperform for the MT-LT.