Chaoda 0682 love granting options to themselves

but the shareholders don't..

resolution 5(B) "To grant a general mandate to the board of directors to allot, issue and deal with shares of the Company"

passes by a narrow 1.5% margin. Only a matter of time before this house of card collapses.

Rino

by Muddy Waters saying essentially it's a piece of shit:

Auditor: Frazer Frost (formerly Moore, Stephens Wurth Frazer and Torbet)

• RINO’s FGD sales (60% to 75% of revenue) are much lower than it claims. We found that many of its customer relationships do not exist.
• Chinese regulatory filings show that RINO’s consolidated 2009 revenue was only $11 million, or 94.2% lower than it reported in the US. We show that the Chinese numbers are credible.
• RINO’s accounting has serious flaws that are clear signs of cooked books.
• RINO’s management is draining cash from the company for its own business and personal uses. The management is in flagrant breach of its VIE agreements, which require it to pay income to RINO (as opposed to taking it).
• RINO’s balance sheet has an astonishingly small amount of tangible assets for a manufacturer. Rather, it is filled with low quality “paper” assets that balance out the inflated earnings, and likely hide leakage.
• RINO is not the industry leader it claims to be in the steel sinter FGD system market. Rather, it is an obscure company in a crowded field, and is best known for its failed projects. Its reported margins are two to three times what they really are. Its technology is sub-par.
• We are not sanguine about management “borrowing” $3.2 million to purchase a luxury home in Orange County, CA the day that RINO closed its $100.0 million financing.

Art Textile 0565.hk

This company is listed on the HKEX and primary produces textiles. It attempts to be less affected by the vagarities of commodification by moving to highend textiles. Most of it's products are sold in China. Constant mention is made in it's annual reports about attending textile fairs in Paris but no results of these attendances are forthcoming.

This company showed up in my earlier screens with high cash and a low price/book ratio. The key points were: was the cash really there and how shareholder friendly would the management be in utilizing this cash.

Auditor: Deloitte Touche Tohmatsu

2007 Annual Report:

Cash: HKD$487m

All Debt: $10m

Inventories: $25m

Receivables: $62m (Rev: $645m)

2008: Announces deal to purchase factory/land from "third" parties for HKD$174m. The vendor was conveniently established in 14 August 2006.

2010 Annual Report:

Cash: $480m

Debt: $393m

Inventories: $104m

Rev: $801

Receivables: $230m

In the 3 years of this period, management has purchased properties/equipment from a third party. Revenue has doubled, however inventories and receivables have quadrupled resulting in negative cashflow for the last 2 years.

I am leery of the timing and fit of the purchases made in 2007 as well as the ballooning receivables which I believe are destined to go bad ($20m > 90days overdue).

On the scale of stinkiness this Chinese company rates a putrid.

ChiNext short candidate

End of lockup period plus...

"As of yesterday, 134 companies listed on ChiNext were traded at an average 72.4 times their 2009 earnings, compared to a price-earnings ratio of 38 on the Shenzhen exchange's main board."

Rats jump ship

The entire staff of Grant Thornton in HK jumps over to BDO to avoid the numerous court cases filed against them after one of their former partners Ricardo Dias-Azedo stole clients', friends' and even his relatives' funds. Old Ricardo followed up the act by disappearing.