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Can you do chart on CO, China Cord Blood? Looks like it has bottomed here. Thx
WATG is taking steps to change perceptions that accounting is bad for China-based companies
This just out
Wonder Auto Appoints PricewaterhouseCoopers as its Independent Auditor
BEIJING, Dec. 6, 2010 /PRNewswire-Asia-FirstCall/ -- On December 6th, 2010, Wonder Auto Technology, Inc. (Nasdaq:WATG - News) ("Wonder Auto" or the "Company"), a leading manufacturer of automotive electrical parts, automotive safety products, suspension products and engine accessories in China, after receiving the approval from the Audit Committee of the Company's board of directors, has appointed PricewaterhouseCoopers Zhong Tian CPAs Limited Company ("PWC Zhong Tian") as the Company's independent accountants for audit work for the year ending December 31, 2010 and first three 10-Qs of 2011.
Mr. Qingjie Zhao, Chairman and CEO of Wonder Auto stated that: "We would like to thank PKF-Hong Kong for its contribution to the Company for past years. Meanwhile, we are very happy to be working with PWC Zhong Tian as our independent auditor. This is another appointment since October 2010 when we appointed Morrison & Foerster LLP as our new legal counsel. We believe that these new engagements will enhance the corporation governance further."
WATG is holding up pretty good here, considering all the problems in Korea and Chinese accounting.
Prepare for the RINO Fallout
After a series of events with almost comical dimensions, we now have the first case of fraud on the Nasdaq, involving a Chinese small cap company. RINO International (RINO) admitted Friday that it did not enter into two contracts for which it reported revenue during its 2008 and 2009 fiscal years. The stock has been halted by the NASDAQ Stock Market around noon on November 17, and it will remain halted until RINO has fully satisfied NASDAQ's request for additional information. NASDAQ has not specified what kind of information they are looking for, but at this time it seems unlikely that RINO will be allowed to remain listed on the prestigious NASDAQ market. Investors should be prepared to find the stock on the pink sheets in a couple of weeks.
Earlier on Friday, the first official statement in the RINO case came from its auditors, Frazer Frost LLP, in form of a letter issued in an 8-K Filing with the SEC.
In a telephone conversation on November 16, 2010, Mr. Zou Dejun, the Chief Executive Officer of the Company, informed Ms. Susan Woo of our firm, in substance, that as to the six RINO customer contracts discussed in the recent report of Muddy Waters LLC, the Company did not in fact enter into two of the six purported contracts, and a third contract among the six was explainable. When Ms. Woo inquired about the Company's other contracts, Mr. Zou said he was not sure, but there might be problems with 20 - 40% of them. Assuming that these statements were reasonably accurate, it appears that our reports would have been affected if this information had been known to us at the date of our reports, although the effect on the financial statements is currently unknown and cannot be quantified without a thorough investigation. We further note that in a conversation the following day, November 17, 2010, involving Ms. Woo, several directors of the Company, Company counsel, and Mr. Zou, Mr. Zou stated that he was not sure the day before and went back to look into some things, and found that apart from the two problematic contracts, all other contracts are legitimate and can be verified.
The language used in this letter gives those very serious events an almost comical note. The CEO said "he was not sure" and "there might be problems," then "went back to look into some things." And Frazer Frost is "assuming that these statements were reasonably accurate" to conclude that "it appears that" their audited reports were wrong as they might have based their findings on forged invoices.
The very basic conclusion from last week's events is that RINO is not taking their status as a U.S.-listed public company any bit seriously, and that Frazer Frost did a pretty lousy job as an auditor. To fall for forged information of such a magnitude raises the question of what exactly Frazer Frost did attempt to verify, if anything at all. This will likely lead to lasting damage for the reputation and credibility of Frazer Frost and the market has already started to punish other clients of the firm.
In Friday's trading Frazer Frost clients were among the biggest losers. China Valves Technology (CVVT) dropped 15.28% for the day to close at $8.93, snubbing off any upside from a Roth Capital upgrade ($16 price target) before the open. Harbin Electric (HRBN) closed at $16.95, down 10.7%, and the stock finds itself now 30% below the $24 going-private offer it received a couple of weeks ago. Other FF clients affected were Fushi Copperweld (FSIN, down 6.69%), China Fire & Security (CFSG, down 5.86%) and China Medicine (CHME, down 4.20%).
Another stock that is directly affected is Orient Paper (ONP, down 7.00% on Friday). Rino International's fall is the first big success for 2-man (short-selling) research firm Muddy Waters LLP who released a very detailed report about the company on November 10, which led to the reported series of events. Muddy Waters' previous target was Orient Paper, but that company has very determinedly defended itself and its stock price had stabilized recently. With the collapse of RINO the focus might now shift back to ONP and put the stock under renewed selling pressure until the results of the ongoing independent investigation into MW's allegations is presented.
So what will happen next?
Will this lead to new or resumed short-selling attacks on a variety of Chinese small caps? Most certainly it will! Short sellers have the whole weekend and beyond to come up with pretty much anything, knowing that whatever they get published will likely have an immediate effect on the stock price, as with the RINO disaster they now have a precedent of Chinese fraud on the Nasdaq. Those companies do already have a hard time defending themselves, even against totally ridiculous allegations. And always keep in mind that not all those attacks will be unfounded, it is very likely that RINO is not the only Chinese company with severe irregularities in its financial statements. But don't make the mistake to interpret this as a "China problem," other than that Chinese companies are just the easiest targets right now.
Will we see a new downtrend for the sector similar to what we all have experienced last summer? That depends on the direction of the general markets in the U.S. and China. It is an undeniable fact that big money is very eager to put their money in (perceived) quality Chinese companies, proven by the China IPO craze of the last three months when most offerings opened for trading some 30-50% above their IPO price. However, if we see the general appetite for risk fading, or the S&P 500 heading for a 10-15% correction, I would expect China small caps to lose value twice as fast. Right now I am still bullish for equities in general, but less so than two or three weeks ago. We should be prepared for both scenarios now.
This RINO situation is serious. Even the biggest bulls will now have a hard time dodging smear attacks on perfectly healthy stocks from China which just happen to have some detail in common with RINO, being it company structure, a sub-par public accounting firm, a weak Board of Directors, or the way they became a public company. It might be that the normal "innocent until proven guilty" is turned upside down for the time being, especially for those companies that do not take their U.S.-listed public company status seriously.
What we should be doing is looking at business models and trying to understand them. Doing our own in-depth research and seeing if we can be comfortable with what we find out. Looking at management credibility and perceived credibility. Who is running the company, which investors are backing it?
Personally I am no longer willing to risk my money with a $250MM stock that chose to reaffirm Kabani or similar as their auditors, nor am I seeing the point in holding a position in a stock that doesn't even bother to do earnings calls. Talking about big board names here only; for Bulletin Board stocks and companies that are early on their way of maturing, we have to set different requirements. However, even there, companies that choose not to communicate at all should be treated with extreme caution.
This is not the time to run away from China stocks.
Smart money will always look for value, and you have to find out where the value is, what companies you want to invest in, and why exactly you would do that. Re-evaluate your holdings, make adjustments now, and prepare yourself for possible "bargain hunting" with quality stocks that might get beaten down in the RINO aftermath, but don't deserve to be treated in the same way for reasons you have to determine for yourself.
Disclosure: No positions in any of the stocks mentioned
Better safe than sorry--- All Chinese stocks are going to have a tough time as the Chinese accounting scandals keep on coming. Even honest companies will suffer. JMO
Reloaded on WATG. China is still going gangbusters. And those of us that had bought earlier in the year probably took some profits over the past week. Bet the ASK side is pretty weak now. JMO
Short Interest on WATG
As of 10/15/2010
3,564,646 shares short
WATG news is good
Wonder Auto's 3rd-quarter net income rises
Parts maker Wonder Auto's 3rd-qtr net income rises, helped by more orders, higher demand
NEW YORK (AP) -- Chinese auto parts maker Wonder Auto Technology Inc. said Tuesday that its third-quarter net income rose 72.6 percent as revenue surged due to strong demand both inside and outside of China.
The company raised its guidance for the year, but shares fell after Wonder Auto's more than 7 percent gain on Monday.
The company said it earned $11.9 million, or 35 cents per share, in the three-month period ending Sept. 30. Last year during the same period the company earned $6.9 million or 24 cents per share.
Analysts expected the company to earn 23 cents per share on revenue of $73.8 million, according to Thomson Reuters.
Revenue rose 33.7 percent to $78.8 million.
China is the biggest auto market by number of vehicles sold, and its auto industry rebounded from the recession quicker than the industry in U.S. did. But growth has fallen since last year, when Beijing boosted demand with tax cuts and subsidies.
The company said its revenue from China rose 34.8 percent to $52.7 million and from outside China 24.5 percent to $7.9 million.
The company raised its guidance for the full year and now expects net income of $37.5 million, up from $36 million, and revenue of $307 million, up from $300 million.
Shares closed up 6.5 percent on Monday to $11.30. On Tuesday, though, shares moderated and dropped 92 cents, or 8 percent, to $10.38 in late morning trading.
Back in again--News was great. But when there was no POP to the news, the traders took profits.
That is why I always take some off the table before news. Just in case we have a reaction like this.
So, back in again
Insiders bought right
. Wonder Auto Technology, Inc. (WATG): Wonder Auto Technology recently guided 3Q10 revenue above $69M vs. a Reuters estimate of $67.8M. Qingjie Zhao (President & Chief Executive Officer) bought $279,385 worth of stock back in May.
Wonder Auto Gets Chinese Car Boost
By ZACKS.COM
Wonder Auto Technology, Inc. (WATG – Analyst Report) is using acquisitions to expand into airbag and seatbelt manufacturing in China. WATG is trading well-below its peers with a forward P/E of 11 compared to its peers at 18x.
Safety Is Where It’s At
On September 7, the company announced it had completed its acquisition of Jinheng BVI Limited, which made airbags and seatbelts. Jinheng has over 50% of China’s airbag market and is the largest national brand supplier of three-point pretension seatbelts in China.
This acquisition will compliment Wonder Auto’s other businesses which produce electrical parts, suspension products and engine accessories for the Chinese and overseas auto markets.
With Jinheng being such a large player in the safety category, Wonder Auto intends to cash in on its dominance, especially as the Chinese government starts mandating certain safety systems.
The company paid for the acquisition with cash on hand and bank loans. It expects it to be accretive to shareholders.
Wonder Auto also raised its fiscal 2010 sales revenue guidance by $300 million or higher. The company is expected to report results on Nov 1 so we’ll get more details then about how lucrative this acquisition will be for shareholders.
Analysts Like 2011 More Than 2010
In the last 90 days, the 2010 Zacks Consensus Estimate has risen by 11 cents to 86 cents. But it is really 2011 that is jumping for the analysts.
The 2011 Zacks Consensus has climbed to $1.35 from 98 cents in the last 3 months. Analysts now expect earnings growth of 57% in 2011 compared to just 5% in 2010.
Second Quarter Sales Jumped 37.9%
On Aug 9, Wonder Auto reported its second quarter results and saw sales increase in both its Chinese business and its business outside of China.
Within China, sales rose 41.1% to $60.9 million on higher sales volume due to demand in the automotive market. Outside of China, sales jumped 16.5% to $7.6 million compared to the year ago period.
Wonder Auto is a Value Stock
Many of the Chinese stocks have had a rough year, including Wonder Auto. Shares came off the March 2009 lows in a terrific rally but in 2010 have reversed course.
In addition to a low P/E ratio, it also trades with a price-to-book ratio of 1.5 which is well within the value parameters.
Analysts expect earnings to grow on average of 21% over the next 5 years, and with its low P/E this translates into a PEG ratio of just 0.5 which means it has the best of both worlds both growth and value.
Wonder Auto is also a Zacks #1 Rank (strong buy) stock
Wonder Auto Technology to Announce Third Quarter 2010 Results on November 9th, 2010
Chinese vehicle sales rose 17% in July, China Daily says
Sales of vehicles made in China increased 17% year-over-year in July, according to China Daily, which cited a statement by the China Automotive Technology and Research Center. However, sales fell slightly month-over-month, and the center predicts that auto sales in the country will fall further next month. Reference Link :theflyonthewall.com
This stock is a victim of the overall market. I seen this coming a while ago. It will see well over $10.00 again
RRPH up 150% on 10x normal volume. Crap shoot
good moves some good stocks on sale all of a sudden. Have to take advantage
Buying WATG today also CSR
CSR, China Security Stock, had news this morning. I am buying under 5.50 Looks like starting to run. Down from 7.00 last week after it met earnings but did not exceed. PEG of .2
China Security & Surveillance Technology, Inc. Showcases Latest Security Products and Solutions at IFSEC 2010
PR Newswire(Fri 8:00AM EDT)
Upcoming earnings are projected to be very impressive, per the company, hence yesterday's impressive move. Big short position should continue to help. Let's see what today's action looks like.
Hopefully yesterday was the start of a much bigger run. $20.00 would be right for this company
We need the fund managers and private investors to realize that this massive growth story remains intact. I suspect we'll see some major percentage pops in the share price soon. The Cramer effect should be far behind us now. There are a number of current positive/outperform recommendation from major brokerage houses.
A friend of mine on a recent buying trip to a number of the larger cities in China said it appeared to him there was an auto being sold every minute!. He said he's never seen anything like it and the landscape there is dramatically changing from what he has previously observed.
I am surprised this isn't moving because the NASDAQ never lost steam and does not appear to be going to for a while. Maybe just consolidating. Certainly no fundamental reason why this isn't much higher
We need some new posters on this board!
Preferably someone who can explain why WATG isn't done consolidating
and moving up given the excellent company fundamentals.
NASDAQ Looks to get smashed now be care full. I am loaded with inverse bear market ETF's especially those against the NAS
Today signified a change of direction for the heavily overbought NASDAQ. May bounce a little but its heading down IMO. Liquidated all bullish positions and went with inverse ETF's
I figured the over bought NaS was going to hurt this short term. Will re enter after the markets correct a bit
A friend on a major buying trip to a number of sites in China, said
he's never seen anything like the frenetic volume of auto sales that is going on everywhere. He used the the phrase like 'one a minute', I expect to emphasize his point.
Having gone to China for a number of years now, he further commented on how the vehicular traffic is so dramatically changing from when you only use to see bikes, etc. He further commented on how 'tiny' the cars are compared to what we see in the US.
Interesting.
Yes I know and remain confident WATG will go up significantly. A retrace in the Nasdaq can only cause a very short term stall with WATG
There's been some significant insider buying recently.
Only one problem I see here as far as timing. The Nasdaq is getting to a over bought condition. If that starts to retrace heavily in the weeks to come it will effect WATG
Hang Seng closed strongly, this and WATG's recent new strength, bodes well for some continued follow through on the upside, imo.
WATG- still very comfortable holding this one. it is clear to me that the move from the high 8s to the low 10s is the first leg of probably four sustained moves upwardly. 8 to 10 to 12 to 14-15 within 6 months and probably much sooner. A couple things to note at this point. First the 9s are the new buying range for this leg. Second, we are going through a very healthy consolidation period following our move to these levels. What is great to see is the strength of the consolidation. In other words, we do not see days of retreat back to the previous levels and instead are creating a new channel of support. There is little doubt in my mind that we will continue to the trend upwardly. I view my investment in WATG as safe money at this point. It is not a high flyer like some of the others, but I am comfortable with that and when we are finished, a 75%-100% gain from the periods where we were buying and eveyone was selling is simply good investing. Good work guys, I will be sticking around in this one for a while.
Looks like we filled that gap. The Nasdaq is entering the power zone and the financial report is coming for WATG. I give this a month and we will be $13.00 and over
Technically we are finally starting to look a bit stronger. Hopefully, friday's positive action will carry through to next week.
China's Premier today addressed the National People's Congress for the coming year (similar to our president's state of the union message), and, among many other things, said there would be a lowering of taxes on the purchase of smaller automobiles.
Certainly good news for WATG
Davidam:
OT: Please see post #9279 on the Investor's Hub TECO board.
Thanks will check it out. I love high risk pennies : )
DAVIDAM:
Don't know if you allocate a portion of your investing assets to high risk penney stocks, or not, but if you do, check out TREATY PETROLEUM (TECO). A very interesting business plan, imo, as they have bought up thousands of acres of US land with once producing, but abandoned oil wells, which they are now actually starting to produce oil from again. These wells were abandoned by the larger oil companies when oil was very depressed. Finding oil costs millions and millions of dollars and here that's all been avoided.
With oil at $80. and the leverage one can get here, I find it a very attractive play strictly for high risk investing.
I have just taken a sizeable position in it. The technical pattern, to the degree that that is valid in a penney stock says BUY.
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