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 Tracking 1258 U.S. listed China Stocks and Counting...
 Tracking 3137 U.S. Stocks and Counting...
Created: 01-Jan-2008

Extra Insight into some of the more controversial issues surrounding China Companies

  • 9:34 AMmore... 
    Staffing 360 (OTC BB:STAF) - We will begin tracking STAF due to strong Q1 2015 results.  Net sales increased to $33.4 million vs $1.3 million in the prior year period. The company is still losing money but is growing revenues at a rapid pace due to recent acquisition and has plans to uplist to Nasdaq. We will continue to track the progress of the company to see if achieving profitability is possible in the near term horizon.
  • 9:32 AMmore... 
    Ctrip.com Interna (NASDAQ:CTRP) and Priceline.com (PCLN) entered an agreement this August that PCLN will invest $500 million convertible bond which is convertible into 6.1 million common shares (ADS).  PCLN is also granted permission by CTRP that, combined with convertible bonds, PCLN can hold up to  a 10% stake in CTRP.  According to a 13D/A filed on 10/21/2014, PCLN has been continuously conducting open market purchase of the stock and is now owns a 7.90% stake in CTRP.
  • 9:30 AM 
    Voxx Internationa (NASDAQ:VOXX) - Board of Directors reaffirms authorization of stock buyback program
  • Yesterday, 9:30 AMmore... 
    Hollysys Automati (NASDAQ:HOLI) announced new contract valued at $13.8 million to supply the supervisory control and data acquisition system (SCADA) to Tianjin Subway Line.
  • Yesterday, 9:30 AM 
    Sinocoking Coal A (NASDAQ:SCOK) announced that operations have commenced on Syngas facility. 
  • Yesterday, 9:30 AMmore... 
    Sutor Technology (NASDAQ:SUTR) announced the company received non-compliance notice due to the Company's failure to timely file its Annual Report on Form 10-K for the fiscal year ended on June 30, 2014.
  • Friday, October 17, 2014, 09:30 AM 
    Kongzhong Corpora (NASDAQ:KZ) announced special cash dividend of $0.88 per ADS. 
  • Friday, October 17, 2014, 09:30 AMmore... 
    China Biologic Pr (NASDAQ:CBPO) announced that the Company has received approval from CFDA (China Food and Drug Administration) for commercial manufacturing of human PCC (prothrombin complex concentrate) at its Shandong Taibang facility. 
  • Friday, October 17, 2014, 09:30 AMmore... 
    GeoBargain Firstime Design L (PINK:FTDL) reported Q3 2014 results. The company has had a hard time sustaining sales and earnings growth since we coded it a GeoBargain on 2/13/2014 at $4.00. The company is embarking on a new online strategy to accelerate growth and broaden its customer base.  We will give management more time to execute its strategy. 
  • Thursday, October 16, 2014, 09:30 AMmore... 
    Orasure Technologies, Inc. (NASDAQ:OSUR) - Target raised at Canaccord Genuity to $12.00 on a report that the company is in talks with government to develop Ebola test.   News that OSUR was approached by the U.S. government to develop an Ebola test was first reported through the internet on 10/14/2014 but not through a major newswire.  This morning, Reuters has picked up this development.  
     
  • Thursday, October 16, 2014, 09:30 AMmore... 
    Ibio Inc. Common (NYSE AMEX:IBIO) issues a press release attempting to clarify its role in fighting Ebola. Yet, it is still unclear to our team if Caliber is using IBIO technology in its Ebola drug development initiatives. 
  • Thursday, October 16, 2014, 09:30 AMmore... 
    Vimicro Internati (NASDAQ:VIMC) announced $39.8 million contract win in Taiyuan City to provide SVAC-compliant video surveillance cameras and system.
  • Thursday, October 16, 2014, 09:30 AM 
    China Automotive (NASDAQ:CAAS) wins multi-year contract with Chrysler. 
  • Thursday, October 16, 2014, 09:30 AMmore... 
    GeoBargain Repro Med Sys Inc (PINK:REPR) reported Q2 2014 results, with increased y-o-y 24.7% increase in revenue to $2.5 million, more than doubled net profit to $203,000, and improved gross margin from 59.8% to 65.3%. We maintain our optimistic view and anticipate continued strong growth for REPR’s flagship products FREEDOM60 and related needle sets.
  • Wednesday, October 15, 2014, 09:30 AMmore... 
    Kandi Technologie (NASDAQ:KNDI): KNDI’s key market, Hangzhou City just announced its new subsidy plan.  Based on this plan, EV’s customer can apply governmental subsidy up to RMB 30,000 per vehicle.
  • Wednesday, October 15, 2014, 09:30 AMmore... 
    Natural Health Tr (PINK:NHTC) announced Q3 2014 revenue estimates of $31.8 million vs $14.2 million in the prior year and $34.2 million in Q2 2014.
  • Wednesday, October 15, 2014, 09:30 AMmore... 
    Montage Technolog (NASDAQ:MONT) - After allegations from short sellers alleging financial misrepresentations, the audit committee of the board of directors claim there were no changes to the Company’s previously reported financial results. 
  • Wednesday, October 15, 2014, 09:30 AMmore... 
    Breeze-Eastern Co (NYSE AMEX:BZC) - VN Capital Fund increased stake in BZC to 12.4% from 9%.  VN Capital believes shares are significantly undervalued.
  • Tuesday, October 14, 2014, 09:30 AMmore... 
    China Finance Onl (NASDAQ:JRJC) announced that the company has updated its mobile application based on the previously launched web-based securities trading platform Securities Master, or Zhengquantong.
     
  • Tuesday, October 14, 2014, 09:30 AM 
    Chinanet Online H (NASDAQ:CNET) announced zero down payment loans offering.
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Zon4Ever 02-Dec-2010 09:35 AM
Post Type: Public Public
by Maj Soueidan As indicated in my recent article, Limit Risk While You Invest in ChinaH (#4746) 02-Dec-2010 09:35 AM

by Maj Soueidan

As indicated in my recent article, Limit Risk While You Invest in ChinaHybrids (U.S. Listed Chinese Stocks),  I track daily new highs in an attempt to identify momentum value plays.  A trend I have noticed is that even as the RTO stocks have once again corrected many ADRs, some with premium multiples are attaining new 52 week highs. Short investors have asserted that ADRs are of higher quality than their RTO counterparts and that their PRC filings match SEC filings.

ADR/ADS stocks listed on major exchanges that attained 52 new highs even as the Chinese RTO space has pulled back:

51 Job Adr (NASDAQ:JOBS)
China Digital Tv Holding Adr (NYSE:STV)
7 Days Group Holdings Adr (NYSE:SVN)
Global Sources (NASDAQ:GSOL)
China Techfaith Wireless Adr (NASDAQ:CNTF)
3 Sbio Inc Ads (NASDAQ:SSRX)
Hollysys Automation Tech (NASDAQ:HOLI)
Fabrinet (NYSE:FN)
Elong Adr (NASDAQ:LONG)
China Yuchai Intl (NYSE:CYD)

A couple well-followed RTO stocks have recently attained new highs:

Lihua Intl (NASDAQ:LIWA)
Puda Coal (NYSE AMEX:PUDA)

The following stocks on the BB have recently attained new highs, most on light volume:

China Electronics (OTC BB:CEHD)
Horiyoshi Worldwide (OTC BB:HHWW)
Shun Cheng HK (OTC BB:BRBH)
Zhongchai Machinery (OTC BB:EQPI)
China Agri-Business (OTC BB:CHBU)
Gfr Pharmaceuticals (OTC BB:GFRP)
Sino Oriental (OTC BB:SMPN)
China Shesays Med (OTC BB:CSAY)
Jinhao Motor Co Common (OTC BB:GIMC)
Asia Pacific Wire & Cabl (OTC BB:AWRCF)

I also like to observe stocks that are within striking distance of a 52 week new high. One such RTO stock caught my attention due to the fact that it sports a trailing P/E multiple of over 20 that most RTO stocks would kill for.  I was obviously excited, thinking that the market had placed its quality stamp of approval on Kingold Jewelery (NASDAQ:KGJI).  Shares have risen from a 52 week low of $0.56 to $8.87, off its high of $11.95 in August 2010.

The company also claims to be the leader in its industry:

"Kingold Jewelry, Inc. is one of the leading professional designers and manufacturers of gold jewelry in the central part of China including Hubei, Hunan, Henan, Jiangxi, Anhui and Sichuan Provinces. According to statistics provided by Gems and Jewelry Trade Association of China, KGJI ranked first and second in the PRC's gold industry nationwide in total volume of production in 2007 and 2006, respectively."

As a precaution, I now run many of my potential ChinaHybrid stock selections through my Chinese attorney I call "Bob" in order to respect his privacy. Recall that Bob was instrumental in my article, The SEC vs SAIC Fact Finding Mission, published on August 25, 2010.  I asked Bob if he was aware of KGJI.  He was, and the news was quite interesting.

Bob writes:

KGJI tried to list in Shenzhen stock exchange in China in 2008.  However, it was rejected by China Securities Regulatory Commission on Aug 4th. 2008 (http://www.csrc.gov.cn/pub/zjhpublic/G00306202/200810/t20081027_34946.htm). 

KGJI planned to sell 33,340,000 shares which would have equated to 25% of the total shares after the planned IPO.  The book value per share before the IPO is RMB 1.59 yuan. As the IPO is rejected by China Securities Regulation Commission, we do not know what the planned price was. However, if we assume KGJI would have applied a 20 P/E (China market has a high P/E), the price shall be around RMB 0.30 per share.

Translation from CSRC site:

"China Securities Regulatory Commission, the Audit Committee issued its 115th meeting in 2008 at the August 4, 2008 meeting, the meeting reviewed the results now announced as follows: Wuhan Golden Phoenix Jewelry Co., Ltd. is not approved."

I am 100% percent sure this KGJI Wuhan Golden Phoenix Jewelry are one the same. Wuhan Golden Phoenix Jewelry has the same address, same legal representative and financial statements as well. In its prospectus submitted to CSRC, KGJI applied its English name as "Kingold Jewelry" on the cover which is the same as KGJI. Wuhan Golden Phoenix Jewelry is the direct translation of its Chinese name. When you say the logo of KGJI, it is a golden phoenix.

Bob goes on to comment:

The media reported that possible reasons for the rejection dealt with falsified financial books.  There were several reasons applied to challenge the prospectus submitted to China Securities Regulatory Commission (CSRC) by KGJI (Prospectus: http://www.csrc.gov.cn/n575458/n776436/n804920/n2466277/n10731196.files/n10731195.pdf). 

At first, it has been speculated that the company intentionally increased (forged) the value in its asset appraisal report for machinery and raw materials invested by Zhihong Jia, CEO, in 2004. Secondly, the increase of the revenues from 2006 to the first season of 2008 was challenged.   Thirdly, it has been speculated that suspicious share transactions from Zhihong Jia to other shareholders existed.  (http://money.163.com/08/0805/03/4II6GVGS00251RJ2.html)

I read the prospectus of KGJI in China (2008), the reverse merger documents and its S-1.  Apparently, the annual increase rate of revenue of KGJI is more than 100% for three years.  The Chinese media challenged the increase in 2008.  The financials in the PRC prospectus, reverse merger documents and the S-1 match, so the company used the same filings submitted to the CSRC.  Now, we need to figure out more details in 2010.

To be clear, the CRSC did not mention that it rejected the application for the IPO due to fraud allegations.

In addition to Bob’s findings and with help from a new due diligence panel I have assembled, I have provided the following information that investors may find useful:

  • It looks like the Company will tap the equity market, as determined by a recently amended S-1 and a blurb in the 2010 third quarter 10Q -

“We expect that cash generated from financing activities may increase significantly as a result of additional financing being obtained.”

We will continue our probe into the KGJI story in order to confirm or refute fraud allegations.  From the strong possible pricing indicated in the S-1 it appears that investors have given a vote of confidence. We welcome input from investors.

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