Itsjustal

ShengdaTech: Chinese Smallcap That Might Be Worth the Risks

Your article failed to mention SDTH's acquisition of a SOE fertilizer company which will effectively triple SDTH's revenue and be immediately accretive to earnings. This is where a major portion of the funds from SDTH's recent preferred stock issuance are being spent. Most of the remaining balance of those funds is being spent to increase production facilities for its NPCC. Note that SDTH cannot meet the increasing demand for NPCC even with the increased production. It looks like its days of negative cash flow may be nearing their end.

While you mention that SDTH has a great leader in Mr. Chen, which is correct, you should also be made aware that SDTH's CFO is extremely good. SDTH's numbers are extremely transparent which is unusual for a Chinese company.

Finally, if you look at the moves made by SDTH in the last year, they are reminiscent of the same moves made by RIO in its nascent stage about seven years ago.

And, yes, I am long SDTH. There is no wonder "why", is there?