Three China Stocks to Watch This Week

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Includes: EESC, JPAK
by: China OTC Player

1) Franklin Silk [FRTW.OB] hit rock bottom with a 52-week low of $0.06 on Friday, down from well over $1.50 achieved in those halcyon days of June 2007. This means that the stock has lost more than 96% of its value in approx. nine months. While I feel the pain of its investors, I also think that this stock is completely oversold. Do you know that its operating company, Qiluo, has a current manufacturing capacity of 600 tons of silk per year (valued at $32 million)? And do you realize that the company is aggressively rolling up smaller silk manufacturers, starting with Zhengzhong Sericulture which was announced in December?

2) Jpak Group (OTCPK:JPAK) restated its Q1 2008 financial statements (ending 9/30/07) this past week, as a result of a difference in the treatment of warrants in the company's recent private placement. There were expectations that a non-cash charge was going to impact the income statement, which was indeed the case. But what was very surprising to me was that the number of diluted shares outstanding actually changed from 46.97 million to 47.53 million. I don't see how this could happen, even by a small amount, unless a mistake was made in the previous statement. And if there was such a simple mistake, were there more serious ones? How would we ever know?

3) Something is afoot at Eastern Environment Solutions (OTCPK:EESC), with unusual movements in its share price. On Wednesday, the company's shares opened at $1.24 and traded up rapidly, closing at $1.60, up almost 30%. Then on Thursday, it opened at $1.55 and closed at $1.95, up another 25%. Then the shares gave up all these increases and more on Friday, finally closing the week at $1.10, all on heavier than average volumes. My question is, how real are these movements for this sparsely traded stock? And if they are not real, who is benefiting from this apparent manipulation?

My Position: None.