If only I knew then what I need to know now!
That is a statement surely resonating through the minds of thousands of ChinaHybridâ„¢ investors who recently were aggressively investing in arguably some of the most promising stocks in the market.
Today, they should be asking the question, “What makes investing in some of these ChinaHybridâ„¢ companies so risky and what should I know now?” That is a loaded question, because it is not just one thing that must be assessed to determine the risk profile of a potential investment. A litany of criteria is present that, when properly analyzed, leads to investment decisions that will both protect your portfolio by averting risk and build your wealth through smart choices.
At GeoInvesting we have honed a process specifically designed to determine if a company really is what it claims to be. Our approach has proven quite effective at uncovering the good, bad and ugly in the U.S. Listed Chinese company space — so much so that we have increased our resources to handle the voluminous influx of knowledge currently at our disposal.
This is the same knowledge that we want to impart upon you. You need to benefit from our extensive due diligence, and there is no better time than now.
What is Real Due Diligence?
Yes, we know. The moniker ‘Due Diligence’ is used in the investment community to a point where it has become a bit diluted and thrown around at will. It’s a phrase that people use to convey an air of responsibility in order to convince themselves and others that they have done their homework. But have they really?
What they don’t realize is that real due diligence should not just be done from the comfort of an office chair, nor is there a simple formula that encompasses the full scope of the work. It needs to be done in layers, each successive layer revealing a bit more to the story until a crystal clear picture is formed.
It’s no secret that GeoInvesting has been at the forefront of a movement to scrutinize the PRC filings of various ChinaHybridâ„¢ companies. We have transcribed thousands of filings, often scouring over a listed company’s multiple subsidiaries to reconcile major line items that we feel should be properly represented in both its SAIC and SEC filings. Blatant discrepancies lead us to deepen our investigations. Undisclosed revisions to SAIC files have also made this process more challenging.
On-the-ground Due Diligence
On-the-ground due diligence (OTGDD) is more than just visiting a company to find out if it really exists. Many companies are alive and kicking. We approach OTGDD as an opportunity to extensively verify as many aspects of the company as possible.
What we ultimately want to know is how accurately the company has portrayed its operations to American investors. There is a level of trust that must not be breached, so instances of gross misrepresentation of any kind are simply unacceptable.
Our Investigations Run Deep
- Determination of tangible business operations through site visits.
- Assessment of land ownership.
- Confirmation of company licenses to operate.
- Complete log of relevant pictures.
- Video surveillance of company operations.
- Verification of work force claims.
- Verification of production line claims.
- Verification with customers, dealers, distributors and acquisition targets.
- Conversations with locals and other credible individuals who have knowledge of a company’s standing in the community.
- Conversations with local legal authorities.
- Physical acquisition of SAIC Filings of the company and its subsidiaries.
- Background checks of company executives and past dealings.
Unparalleled Inspection of Company Filings & Public Information
- Our qualified team includes our knowledgeable on-staff PRC attorney with extensive experience reviewing financial statements, as well as our on-the-ground investigators in China.
- Assessment of ownership structures.
- Identification of related party transactions and discussions of their repercussions.
- Transcription of SAIC filing income and balance sheets into a structured format suitable for viewing comparisons.
- Reconciliation of SAIC filings with SEC filings.
- Investigate the backgrounds of the initial shells with which companies have merged.