Attractive Valuation for China Integrated Energy [View article]
It may have been a smart idea to sell or short a long time ago. Though they retained KPMG-- and they also secured a bank loan-- they're taking strides to sort of "prove" their performance is legitimate-- and I believe them-- though as we can see from the price history, I am taking an opposing view from the market. I am fine with this since I think your fears are well priced into the stock already and there could be huge upside potential if the stock can trade on fundamentals once KPMG blesses the books.
Attractive Valuation for China Integrated Energy [View article]
There is no doubt that some of their capital markets activity raises questions.Though you seem to be basing your articles and nearly 100% of your thought process on financial and capital market decisions, while ignoring the operating performance of the company... You remember what operating performance is right... It's the stuff the company is actually made of. It's the stuff that should be considered long term... Instead you're basing your decisions apparently on CBEH's capital markets activities that impact the performance (non-operating performance of course) in the short term only.
Good luck investing based on how companies raise capital, while ignoring how the company actually makes money. You're going to need it.
Recent Corporate Actions Spell Shareholder Value at China Wind Systems [View article]
Oddly enough, shortly after this correction, CWS announced that Liu has personally invested $125,000 in CWS through its common shares.
"Mr. Liu stated, "I have made this investment in China Wind Systems to reflect my confidence in the Company and my belief that China Wind Systems is well positioned for sustainable long-term growth and profitability in the renewable energy industry."
Revisiting Gushan Environmental Energy: Q & A With Management [View article]
It now seems almost perfectly clear that the consumption tax issue is resolved. I have seen several news sources cover it now. I will link one of them here.
Tax Issue Resolved for Gushan Environmental Energy? [View article]
I think it is more clear now that China is abolishing the consumption tax levied on refineries and fuel producers such as Gushan. A few more articles have come to light. See below.
China Ritar Power: New Lows Mean Opportunity [View article]
I appreciate your concern for my accounting knowledge. I have taken many courses. If CRTP was operating at negative margins, I don't think sales would be appropriate (I'd agree with you, and yes I know this is somewhat opposing the typical view of this metric). To me, it doesn't matter how much you sell if you can't turn a profit.
In this case, CRTP is profitable and has been so for years. So, I feel as if sales is a good indicator of performance for the company. And regarding my losses, it seems clear that in 2010, even when most Chinese small caps have "blown up" I am doing just fine. I like to try to look at valuation a little differently than everyone else so if you don't like my methodology, then don't follow my work.
Also, regarding dot.com valuation on sales-- I completely disagree with the correlation you are making here. In those cases, the dot.coms were not profitable and were being valued at many many times sales (e.g. 10-100x sales). CRTP is trading at less than .5x sales and IS profitable, and so I am pointing out the valuation disconnect.
China Wind Systems: High Growth and Low Valuation [View article]
I'd agree with this as well. I think any way you slice and dice the valuation methods, CWS is not being fairly valued due to the recent criticisms of the Chinese reverse merger process. I like sales in this forum because it is easy for many to understand. A company with high growth and consistent profits like CWS should not be trading at less than its annual sales.
China Wind Systems: High Growth and Low Valuation [View article]
This is a short sellers fairy tale. If this is what you're clinging to as your reason for shorting this stock, then I think you're soon to learn a hard lesson about short selling.
Tax Issue Resolved for Gushan Environmental Energy? [View article]
Well, to your first point, the impairment charge is also a non-cash charge.
To your second point, I have seen a lot of investments myself and I disagree with you that book value is a volatile valuation metric. I also entirely disagree with you that "seasoned" investors disregard book value. If anything, it's the opposite, though they may try to make adjustments to book value to reflect the market value of the PPE, etc. In this analysis, I did the same thing by posing the question to management that their PPE is not worth what it is recorded at on the books which would have an effect on book value. I admitted fully that it is most likely worth somewhat less value than it is recorded at-- but certainly not zero, which is what it is being priced in at (hence my valuation thesis that the shares are undervalued).
Also, since GU has no cash flow, earnings, etc, one of the last choices is to use an asset based valuation approach, which is exactly what I did here. PPE + Cash minus liabilities essentially, and try to put a better price on the PPE.
I think the "new" book value is probably reflecting closer to reality and is still more than 2x the stock price.
Tax Issue Resolved for Gushan Environmental Energy? [View article]
Indeed. I did not see that impairment charge coming, though it was pretty well established that the PPE's true market value was less than what was on the books. During my Q & A I asked directly what they thought the value was given that the market was discounted it heavily.
It's all non-cash issues any how-- an impairment charge which will reduce depreciation, and help margins, etc... but again it's all non-cash stuff.
Tax Issue Resolved for Gushan Environmental Energy? [View article]
(16.35 - 3.7) / 3.7 = 3.41891892
or into HP 12C Financial Calculator
3.7 Enter, 16.75 %Delta = 3.42
You are right though, the wording in the first part of the article is incorrect with ("discount") though clarified later with, "The shares would need to rise 342% to reach its tangible shareholder's equity given today's share price of $3.70."
Tax Issue Resolved for Gushan Environmental Energy? [View article]
Yes, though I will not disclose over public forum my communications with management, unless they give me their consent as was the case with the Q & A session. I have posted in this article my full and total knowledge and belief of the issues. My latest communications IR have no effect on my thesis. (meglogon, check your inbox, I responded).
Tax Issue Resolved for Gushan Environmental Energy? [View article]
To answer at least one of your questions, I would check out my article with a long and in depth Q & A with management.
Beyond that, I opened up my research and writing with GU with its share price at .64 cents (or $3.2) post split which I state throughout the article. Since I wrote it, the stock doubled, and is currently trading at a premium of 40% since I began publishing.
Beyond that, I make no estimates as to what will happen to the share price in the short term, as my mind set is long term only. In this case, any short term traders who have heeded my advice have done very nicely.
Lastly, I full and totally agree with you that you should NOT be investing in GU with anything close to your livelihood, as it is nothing short of "distressed" equity. It is very risky.
Attractive Valuation for China Integrated Energy [View article]
Attractive Valuation for China Integrated Energy [View article]
Good luck investing based on how companies raise capital, while ignoring how the company actually makes money. You're going to need it.
Recent Corporate Actions Spell Shareholder Value at China Wind Systems [View article]
"Mr. Liu stated, "I have made this investment in China Wind Systems to reflect my confidence in the Company and my belief that China Wind Systems is well positioned for sustainable long-term growth and profitability in the renewable energy industry."
www.prnewswire.com/new...
Recent Corporate Actions Spell Shareholder Value at China Wind Systems [View article]
Revisiting Gushan Environmental Energy: Q & A With Management [View article]
business.asiaone.com/B...
Tax Issue Resolved for Gushan Environmental Energy? [View article]
finance.ifeng.com/stoc...
translate.google.com/t...
www.agra-net.com/porta...
China Ritar Power: New Lows Mean Opportunity [View article]
In this case, CRTP is profitable and has been so for years. So, I feel as if sales is a good indicator of performance for the company. And regarding my losses, it seems clear that in 2010, even when most Chinese small caps have "blown up" I am doing just fine. I like to try to look at valuation a little differently than everyone else so if you don't like my methodology, then don't follow my work.
Also, regarding dot.com valuation on sales-- I completely disagree with the correlation you are making here. In those cases, the dot.coms were not profitable and were being valued at many many times sales (e.g. 10-100x sales). CRTP is trading at less than .5x sales and IS profitable, and so I am pointing out the valuation disconnect.
China Wind Systems: High Growth and Low Valuation [View article]
China Wind Systems: High Growth and Low Valuation [View article]
China Wind Systems: High Growth and Low Valuation [View article]
Tax Issue Resolved for Gushan Environmental Energy? [View article]
To your second point, I have seen a lot of investments myself and I disagree with you that book value is a volatile valuation metric. I also entirely disagree with you that "seasoned" investors disregard book value. If anything, it's the opposite, though they may try to make adjustments to book value to reflect the market value of the PPE, etc. In this analysis, I did the same thing by posing the question to management that their PPE is not worth what it is recorded at on the books which would have an effect on book value. I admitted fully that it is most likely worth somewhat less value than it is recorded at-- but certainly not zero, which is what it is being priced in at (hence my valuation thesis that the shares are undervalued).
Also, since GU has no cash flow, earnings, etc, one of the last choices is to use an asset based valuation approach, which is exactly what I did here. PPE + Cash minus liabilities essentially, and try to put a better price on the PPE.
I think the "new" book value is probably reflecting closer to reality and is still more than 2x the stock price.
--Jamz
Tax Issue Resolved for Gushan Environmental Energy? [View article]
It's all non-cash issues any how-- an impairment charge which will reduce depreciation, and help margins, etc... but again it's all non-cash stuff.
Tax Issue Resolved for Gushan Environmental Energy? [View article]
or into HP 12C Financial Calculator
3.7 Enter, 16.75 %Delta = 3.42
You are right though, the wording in the first part of the article is incorrect with ("discount") though clarified later with, "The shares would need to rise 342% to reach its tangible shareholder's equity given today's share price of $3.70."
Thanks for the check :)
Tax Issue Resolved for Gushan Environmental Energy? [View article]
Tax Issue Resolved for Gushan Environmental Energy? [View article]
Beyond that, I opened up my research and writing with GU with its share price at .64 cents (or $3.2) post split which I state throughout the article. Since I wrote it, the stock doubled, and is currently trading at a premium of 40% since I began publishing.
Beyond that, I make no estimates as to what will happen to the share price in the short term, as my mind set is long term only. In this case, any short term traders who have heeded my advice have done very nicely.
Lastly, I full and totally agree with you that you should NOT be investing in GU with anything close to your livelihood, as it is nothing short of "distressed" equity. It is very risky.