China Strategic 0235

Hires ex government minister (Secretary for Financial Services) Frederick Ma for $3.5m. Also hires Raymond Or Ching Fai for $9.24m salary. Granted options worth $462m. Total: $475m.

Has 131 staff and trades in 'battery products'. Had revenues of $18m in 2008 and has an average loss of $100m for the last 5 years. Had a capitalization of $100m.

Gets cash by issuing shares and notes June to "capture suitable investment opportunities when when they are identified"

In 10th November they announce acquisition of Nan Shan resulting in a 80% pop in share price.

Incredibly intuitive of the individuals back in June to invest in a money losing battery products company which is looking for acquisitions. Highly unlikely that they had prior knowledge about China Strategy diversifying into a totally completely different business line by buying a life insurance company.

Mud like transparency.

Endwave (ENWV) hubris

.. or greed?

Entrenched management with hands in cookie jar - salaried helpers who just can't release that tit. The Endwave (ENWV) management really needs to end it all and liquidate. Trading at $2.40, no debt and $7/share in cash.

Fu Ji Food (1175) bonds

The faint gurgling shriek we hear... the sound of the fat lady sliding around the s-bend.

"Fu Ji's convertible bonds, of which HK$2.2 billion are outstanding, were being offered for sale yesterday at just six cents on the dollar, while potential buyers were offering four cents, two holders of the securities and an independent broker confirmed.

The bonds traded at 25 cents in the dollar the day after Fu Ji fell into provisional liquidation. But bondholders have turned gloomy after learning that business at the beleaguered caterer has deteriorated drastically since it last met financial reporting obligations nearly a year ago."

An insidious trap sprung by insiders on investors. A glance at their published numbers would have sprung some interest, little do investors know the enterprise was hollowed from within by fraud and a paper facade held up with string and wire. A market cap of $4B (USD$500m) disappears into the pockets of thieves.

There are a lot more out there. Beware.

01175 FU JI Catering - Company Summary

Index Constituent : NA Price (2009/07/28) HKD 7.600 (Suspended) 52W High/Low (HKD) 7.620 / 2.270 Issued Cap (mn shs) 541 Auth Cap (mn shs) 2,000 Market Cap (HKDmn) 4,114 Par Value HKD 0.01 Last Dividend Nil (2009I) Ex Dividend NA Dividend Payable NA Change Price Sector Market Avg Dly Vol 1 Month +0.0% -1.3% -5.1% NA 3 Months +0.0% -9.2% -4.8% NA 1 Year +102.1% +25.6% +57.4% 1,701K Key Financial Ratio (Fiscal Year : 03/2008) Current 2.18X Oper Margin 24.8% LT Debt/Equity 71.3% Net Margin 21.5% Total Debt/Equity 81.2% Return on Equity 15.3% Price/Book 1.38X Return on Assets 7.2%

Year End (MM/YYYY) Earnings (HKDmn) YOY Chg (%) EPS (HKD) YOY Chg (%) DPS (HKD) PER (X) Yield (%) Dividend Payout(%) Book NAV (HKD) 03/2004 77.94 +127.3 0.260 +127.2 NA 29.26 NA NA NA 03/2005 156.05 +100.2 0.470 +80.8 0.038 16.18 0.50 8.09 1.546 03/2006 243.12 +55.8 0.546 +16.3 0.153 13.92 2.01 28.02 2.783 03/2007 351.81 +44.7 0.697 +27.6 0.206 10.91 2.71 29.56 3.550 03/2008 456.16 +29.7 0.857 +22.9 0.241 8.87 3.17 28.14 5.526

Naked options and advisors

Meanwhile down under, advisors trading naked options on behalf of clients. I guess the 'helper' was so successful trading his own account and being a kind soul he wanted to spread the loot by helping his clients.

Unfortunately the market doesn't respect visualizations..

From the SMH:

But in the winter of 2004 it all turned sour. Within a year many Ord Minett clients had lost all their money - millions of dollars wiped out in increasingly risky options trading.

ASIC has investigated the claims against Ord Minnett and said in July last year that it would ''not take any further action & at this time''.

Ben Leeden continues to work as a private client adviser in Ord Minnett's Gold Coast office. His former clients say they are still "very hopeful" of recouping some of their losses from Ord Minnett.

"I visualise it every day," Tyson says. "I do a lot of visualisation."

Why you don't talk, from the inside.

An experienced police officer tells you why you should never agree to be interviewed by the police.

Don't talk to the cops

US specific, but good advice. Mr. James Duane, a professor at Regent Law School and a former defense attorney, tells you why you should never agree to be interviewed by the police.

Chinese IPOs, China Zhongwang Holdings

IPOs are generally a scam perpetuated by the founders and their investment bank backers. The Chinese IPOs are hot steaming dumplings served with fillings of faeces to the public:

"Mainland aluminium producer China Zhongwang Holdings has instructed accounting firm Ernst & Young to independently review its initial public offering prospectus following allegations that the firm falsified information about its customer base in the share-offer document.

Zhongwang raised HK$9.8 billion in its May flotation, becoming the first company to obtain over US$1 billion from investors on any global stock market for nine months. The fund-raising propelled Liu Zhongtian , the Liaoning-based firm's founder and chairman, to 10th place on the Hurun rich list, which estimated his personal wealth at 28 billion yuan (HK$31.8 billion).

But on September 14, the mainland newspaper China Economic Observer claimed to have found that some customers named in Zhongwang's IPO prospectus did not buy from the company last year.
"

But hold on!! We have the fox counting the chickens... the documentation will be in a suitably altered state. Nothing to see here. Move on.

"The aluminium firm yesterday told the Hong Kong stock exchange it had appointed a "big four" accountant "to conduct [an] independent review on the group's sales transactions with the major 10 customers during the period from 1 January 2008 to 30 June 2009 and documentations of income taxes for the financial year ended 31 December 2008".

People close to the company with knowledge of the matter confirmed the auditor was Ernst & Young. They said Zhongwang had not decided whether to make the findings public."