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Sean Wright  

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  • Feihe International's Rough Financial Position [View article]
    I can just feel the love from you guys. Thanks for sharing the warm and fuzzies. The good thing about this short is that there is a problem, too much debt, and a catalyst, which is that they have to pay Sequoia back. So debt is going to keep piling on if they don't raise money soon. If they pull down all of their bank lines they will be toast. It's only a matter of time. Selling off assets won't help either because they'll never get balance sheet carrying value for this stuff. The question to ask yourselves is if shareholders are asked to put in new money, what price do you think that deal is going to clear at?

    But, if you don't take my word for it, it looks like someone else is on to ADY as well.
    Apr 8, 2011. 11:40 AM | 1 Like Like |Link to Comment
  • China Biotics: The Numbers Don't Add Up [View article]
    Have you read this? There is definitely enough production capacity.
    Mar 15, 2011. 02:24 PM | 4 Likes Like |Link to Comment
  • Nuclear Shorts for the Near-Term [View article]
    China will continue to build. CVVT is trading under 4x earnings and has great exposure to nuclear demand in China. I would not lump it in this category.
    Mar 14, 2011. 02:59 PM | 1 Like Like |Link to Comment
  • China Media Express: Up on Bad News [View article]
    They can't do a buyback until they report numbers because they are in the blackout period and they didn't file a 10b5-1 trading plan prior to entering the blackout period. I expect they will start buying shares once they report, that is unless reporting triggers a massive short squeeze and the shares go so high that they are no longer a good deal under a buyback.
    Mar 3, 2011. 10:18 AM | 2 Likes Like |Link to Comment
  • Red Flags at China MediaExpress: Significantly Mismatched Filings in China, U.S. [View article]
    deloitte doesn't outsource anything to a local auditor. only the crappy small auditors do that kind of thing.
    Feb 9, 2011. 03:04 AM | 2 Likes Like |Link to Comment
  • China-Biotics: DuPont's Next Acquisition Target? [View article]
    In order to keep the valuation analysis simple, I multiplied the CHBT EPS by the average industry multiples and by the Danisco transaction multiples. I should note however, that none of these companies has a huge cash surplus like CHBT. Danisco, for example, is levered at 1.3x EBITDA. In order to compare apples to apples, you actually need to add $5.79, which is CHBT's pro forma cash on 9/30/10 after repayment of the convertible note, to the implied price per share numbers for CHBT. So to give an example, Danisco is trading at 22.5x its FYE 4/30/2011 EPS. That multiple implies a $44.33 per share price for CHBT based on its FYE 3/31/2011 EPS. In order to make a fair comparison, you should add the $5.79 in cash per share to $44.33 to get the correct implied share price for CHBT. That's $50.12 per share. CHBT closed at $14.84 per share today. The upside is tremendous.
    Jan 12, 2011. 07:53 PM | 3 Likes Like |Link to Comment
  • China MediaExpress Draws Interest - Some of It the Wrong Kind [View article]
    Nice article Glen. Loved the rip on Greenberg. I'd like to see someone do an analysis of the performance of stocks he tells people not to buy. It would probably be a great portfolio.
    Jan 12, 2011. 04:17 PM | 3 Likes Like |Link to Comment
  • China-Biotics: Strategy or Cover-Up? [View article]
    Hi Matt,

    I like your writing style, although I disagree with your conclusions.

    Here is a clip from the Financial Times yesterday that you might find interesting. Beijing is raising its minimum wage by 21% following a 20% increase in June. The rising labor costs management is referring to are real. Selling the product through these retail outlets did not make a lot of sense. I've visited the company twice in China and I can tell you it's the real deal and very impressive. However, the retail stores are not impressive, and I've visited several. The retail strategy never made much sense to me. B2B sales make a lot more sense.

    You can write all day on this subject, but I've seen the bank statements, tax filings, and leases for the now closed stores all with my own eyes. I've also seen the factories twice. I even took a sachet of CHBT's protein probiotic in my OJ this morning. It's quite good.

    Kind regards,

    Dec 31, 2010. 01:26 PM | 7 Likes Like |Link to Comment
  • China-Biotics: My Top Stock Pick for 2011 [View article]
    Jason, I am wondering if you could please post some more comments on the capsule economics and explain that in some more detail. That would be really helpful. Many thanks, Sean
    Dec 20, 2010. 09:56 AM | 1 Like Like |Link to Comment
  • China-Biotics: My Top Stock Pick for 2011 [View article]
    Great article Jason!
    Dec 20, 2010. 01:59 AM | 2 Likes Like |Link to Comment
  • In Search of Great Stocks, Part III [View article]
    Santi, great article. I look forward to your next one.
    Best regards, Sean
    Nov 8, 2010. 01:12 PM | 2 Likes Like |Link to Comment
  • China Education Alliance: The Next New Oriental Education? [View article]
    Hi Rickraphael,

    I am sure that liquidity will become less of an issue once the stock price is higher. Also, the company has engaged HC International as its IR advisor and is making more of an effort to get out on non-deal road shows to make itself known. Next week for example they are making more investor visits.

    Best regards, Sean
    Oct 8, 2010. 02:41 PM | Likes Like |Link to Comment
  • China Education Alliance: The Next New Oriental Education? [View article]
    Hi stocklad,
    I've spoken with Mr. Yu and Zack about the issue. I am guessing they will make the switch at some point but I don't know about the timing.
    Best, Sean
    Oct 4, 2010. 10:28 AM | Likes Like |Link to Comment
  • China Education Alliance: The Next New Oriental Education? [View article]
    Hi PMCPMan,

    The interest earned depends on whether or not the company has its money in time deposits or regular deposits. I called Zack this morning who confirmed to me that all cash sitting in the PRC is sitting just as regular bank deposits.

    The interest rate on regular deposits is 0.36% right now and that rate is set by the government. Using that rate I think you'll find that this works out well.

    Please see the article here below that I wrote for another company where a short seller made a similar allegation.

    Kind regards,
    Sep 30, 2010. 02:24 PM | Likes Like |Link to Comment
  • China Education Alliance: The Next New Oriental Education? [View article]
    Unfortunately I did not get to see their facilities. Mr. Yu was in Beijing at the time working on setting up new training centers, so I had to meet with him in Beijing rather than Harbin. Apparently he spends about half his time in Beijing and the other half in Harbin now since there is so much going on in Beijing.

    Mr. Yu agreed to meet with me on the evening of the Moon Festival, which is like Chinese thanksgiving, and then I found out that during the National Day Holidays he was going to visit an acquisition target in Hebei. Later making smalltalk, I asked him where he likes to go on vacation and he said, "I don't go on vacation." Then I also found out he speaks with Zack Pan for an hour every night between 10-11pm Chinese time. The bottom line is this guy is an animal who does not stop. I think all we have to do is stay in the boat with him and he will make us a lot of money.

    By the way, even though he wants to build a big business, I don't this guy is immune to selling either. I asked him if an EDU or similar came along with a full offer, something that would make him a decent nine figure sum, if he'd turn it down. He grinned and did not say no, but just said, "We'd consider it but EDU doesn't want to pay full prices." I actually think EDU should be using its stock to buy up companies like CEU. With stock that high, they have a great currency right now.

    Lastly, have you spoken with Zack? I would encourage you to call him and ask him about the audit procedures and the like. I know that he has gone to the banks himself to see the cash. Zack is a very trustworthy guy. I don't doubt him.
    Sep 30, 2010. 12:17 PM | 2 Likes Like |Link to Comment