YaSheng Group (HERB)

[RealDutch]

He basically wants to invest in cash-rich and low-debt companies.

You are saying the company is not a buy at $2.50 according to his model. But at $2.50 HERB is trading at a P/E of 3 and a P/Book of close to 18%. That's exceptionally cheap, so that is where the model fails.

More so, companies trading at these depressed levels don't want to issue stock and raise cash. They may have trouble getting loans as well. So in this case the current assets relative to non-current assets is very low. Which means the model doesn't work for the depressed China space. At least not in HERB's case.
Let's leave it at that.