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BURP, I also think what we are seeing is fear that companies will pull the going private card at current prices. PE firms are also entering the game (maybe eager to get fooled!!!!).  Many investors are now moving outside the U.S. to find short opp.  But I do think significant risk exists in the U.S. IPO market and RTOs if they climb to P/E above 5.  2011 may  be the year where the tax fraud (real) companies will be separated from the outright fraud ones.

No stock in the CGS space is immune from looming hit pieces ....one indicator that has been very reliable is the Put Options activity.  Stocks like YONG GURE/GFRE TSTC  and others, not only have little put action but the short interest has been declining as well.  2nd Q  numbers have historically been the best for many names and perhaps...just perhaps...we may see shorts lay off for a while as many charts now are indicating a bottom has formed... thus risk reward at these levels is just not attractive....fingers crossed gang!

Maj,

Thank you for your response, that will provide me with a better information to make decision for now.

Happy 4th of July to you!

Jono

Jono,.

Gulf Resources (NASDAQ:GFRE): Just too much risk that this stock will be hit again. We suspect that the best case scenario in this case is that the company may have evaded some taxes. Still, how would the SEC look upon this?  But we can see them playing the going private game. We do believe that the SAIC filings provided in the truth pieces are the originals and that the company revealed amended filings in their defense.

China North East Holdings (AMEX:NEP)- We do not like the business, regardless if they are legit

Longwei Petroleum (AMEX:LPH)- We do not like the business, regardless if they are legit

China Agri-Business (OOTC:CHBU)- no dd yet, but we think if we were to perform some, it would not be great. This company has been able to execute on a new business strategy in record time!!!!!!!!!!!! That being said, we want to like this name and will keep an open mind. We do fear that they will need to raise money. The $$ they paid for their latest acquisition was not too egregious. This  is good news. But really, how is this company able to grow its business without even a modest increase in expenses?  Most of the the increase in EPS is coming from the COGS line and will likely be easy enough to investigate.

China Transinfo Tech (NASDAQ:CTFO)- lot of subs. Why so complicated? No dd yet.

China Botanic (AMEX:CBP)- We have several issues with this name.

We intend to perform DD on most of these names.

Maj,

May I know what's your input on GFRE,NEP, LPH, CTFO, CHBU, CBP?

Im currently sorting out the bad apples from the good ones from my list.

Thanks,

Jono

LPH?

what about CTFO?

do you have any target price for OSN?

Thank you for the prompt reply Maj. I'll look into it and come with more questions.

Best.

Lotus Pharmaceuticals (OOTC:LTUS):  We beleive that the company is not being totally forthcoming regarding its Inner Mongolia project. Furthermore, director resigned and voiced disagreements. You do not see that often. That is all we really needed to know to form our negative bias.

China Armco Metals (AMEX:CNAM): business is too capital intensive and will require a constant inflow of capital. We need to dissect the SAIC filings, but CNAM might be legit on the top line and show profits (albeit less than SEC).  Maybe a going private candidate ?  No position

Ossen Innovation Co (NASDAQ:OSN): Only name we are essentially long right now. Some PRC filings issues do exist.

Us China Mining Group (OTCCB:SGZH): filings do not match and is an FIE. We  do not place trust in management. No position

Daqo New Energy (NYSE:DQ): No DD yet, but should be on the list to investigate No position

China Information (NASDAQ:CNIT): No DD yet, but should be on the list to investigate. CFO just resigned, which made us short some.

China Fire & Security (NASDAQ:CFSG): Looks like it is going to go private. Little likes it and called it.  No position

Thanks, can you notify me if you found any conclusion on this companies if they are legit or not? LTUS, CNAM, OSN, SGZH, DQ, CNIT, CFSG?

I'd really appreciate it.

I was referring to pulling filings for companies that have announced intentions to go private.

But we are also working on identifying companies that may be going private candidates. In general companies that

• match on all counts with regards to PRC filings
• Match only on revenues, but still are profitable (especially if filings mis-match is due to tax fraud)
• have raised money (as long as first two conditions are met)
• have no need to raise money (as long as first two conditions are met)

Could be going private candidates.

Can you also provide me some chinese stocks that you find are frauds? NEP? GFRE? tq

thanks maj, when you mentioned "all going private." do you mean the chinese companies are planning to go private? if so, can you provide names of the companies? thanks

Indo.. we have discussed Gulf Resources (NASDAQ:GFRE) in the boards on a few occasions.  I will search for the relevant messages and post an alert with references.  On another note, we will be pulling SAIC filings of all going private companies. If they match SEC, we will deem the probability of a successful transaction as plausible.

im surprised nobody has followed this stock here, anyone care to share some DD on this one? Bob? MAJ?