Empire Building 101
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Total joke that nobody caught this. One week and no update from Hawk Associates or pictures. Totally insane with no update on the cig factory guidance nada.
It is trading as though it is a complete fraud and NOT a single PR that clearly gives investors any reason to hold or buy.
They cancel the Seaside deal for almost $2.40 a share as inadequate and then turn around and do the Kodiak for 3 quarters and 4 cooperheads or .79 a share.
Hawk needs to be upfront on what the colleague brought back. IMO, I can't see anything good as the volume clearly says it all. Other than the PR that spurred a little interest it has been down. Had they brought back anything meaningful their would have been a leak as friends and family started to buy in. The lack of buying after the return surely seems indicative of nothing real positive. Certainly hope to be wrong here but things are looking like crap pricewise.
All IMO,
Steven
P.S. Gonna hold till Q1 and then it is time to make a decision!
"China Kangtai CEO, Jinjiang Wang, said, “We expect this expanded use of cactus pectin to increase raw material revenue streams and broaden shareholder value. Our research shows that Cactus pectin has multiple health benefits. For instance, it has been shown to reduce toxins in the human body. In addition, it has commonly been used in Chinese herbal medicine to reduce blood sugar and cholesterol. These benefits are well known to many Chinese consumers and this is why demand is growing.”
The last line says it all increased demand.
I realize Pappy wants the H/B products released but until they get more cash in the bank that does NOT seem likely. To launch new product would be a direct drain on cash. Expanding in established product lines is cost effective and prudent at this time. However, I believe the time is getting closer to launch these new lines as cash is improving.
For me, I have not sold a single share and patiently waiting for Q1 results. Last year was flat on every comparable basis for the whole year.
When the Q is announced next month I look for earnings to be up 50% as a direct result of increased cig sales.
In the event management has not overstated revenues or net profits this is one of the most undervalued stocks of all time.
"The decrease in sales of raw and intermediate materials and packaged foods reflected changes in our product mix."
This is a direct quote from the 10K.
IMO, they have fine tuned the product mix by discontinuing the low margin products.
I know they discontinued the food packaging which had low margins but currently thought feed at 16% wss the drag on margins.
Could someone refresh me on the raw material gross margins?
Personally I like the idea of expanding current lines with improving margins.
Why? Very little capital required!
With all these halts going on this is getting downright scary knowing this could happen to any CGS.
Glad CKGT.OB already reported but exactly how reassuring is that?
Can hardly wait to see who is next?
Sure hope it isn' ckgt.ob!
Is it the boards opinion we will see continued selling because of the margin requirements change?TIA
Boy I sure hope your right.
Certainly is some nice sized buys I must say and $2+ is certainly in the not to distant future. Who knows maybe a dayend run.
I looked and it was $1.92 and looked again about 5 minutes later and it was $1.86 Now it looks like it is turning around again. GL
Unfortunately I'm no longer convinced. Geoinvesting accusation needed a much stronger responce. Why is management not PR-ing anything relevant. For example the new cig manufacturing plant is now in production. Quickly losing my patience here. Now they will post a few pictures...geez do a friggin buyback if your legit or maybe an open market purchase...do something!
Currently dropping like a rock!
Any thoughts on this one? Probably should just stay away from everything here. It seems when I buy anything something negative comes out almost immedaitely. Agin any thoughts on LNDT
When I get time I am almost 100% sure the figure is 20%. Where did you see 10%? I will look for it!
Is there any stock within our space that is 100% legit??
Can't find where management had said cigs would be 20% of revenues for 2011.
With tht said can we expect a hit piece on ckgt.ob?
Any thoughts on CSGH?
Sure hope they put out 2011 guidance. I'm sure that wouldhelp(LOL)!
ABAT responds to allegations. Stock up currently up 18% on huge volume!
http://finance.yahoo.com/news/Advanced-Battery-Technologies-pz-851651760.html?x=0&.v=1
Didn't realize they responded.
The second argument they present is a valid one but I very much doubt that Geo would post the comment if they didn't have ALL the different subs SAIC filings obtained. That remains to be seen though
Has anyone confirmed products other than smokes? Certainly someone knows much more than their telling!
Atleast they did respond. Hopefully we will get some pics and more info once the colleague returns this weekend. GLTA
Exactly what do you mean? A PR
What is real sad is even though China is curently enjoying a 4 day weekend management has not responded. Although they have acknowledged the Geoinvesting allegation of the revenue inconsistencies in the SAIC filings verses the SEC.
If I had been the CEO I would have immediately called for an emergency meeting with a public statement forthcoming. Their reputation is at stake and God forbid possibly their lives. With people losing entire fortunes, possibly many with CCME, NIV, CIL etc this possibility is becoming more ralistic as more fraud becomes evident. While these people may not be prosecuted this would surely become a concern with me had I known I stole lots of peoples money. Different culture or not nobody even in China would tolerate people stealing their money so this theory holds NO water with me.
Certainly would be nice for management to not only counterdict this claim but come out with a logical and reasonable explanation.
The sad part is even if they have over-stated their revenues which I don't believe to be the case they have an opportunity of a lifetime. Cigarettes business is real and should continue to go gangbusters. While many have moved on which is understandable I believe once this area gets cleaned uo CKGT will trully be one of those "once in a lifetine" opportunities.
Now I degress to reality...
Not a single post today. Has everybody moved on?
Well I'm still here waiting patiently for a responce from managemnent.
Anybody here convinced ckgt.ob is a fraud?
Anybody here convinced ckgt.ob is not a fraud?
Anyone care to share...
Does anyone care?
This was from the Maj on SAIC & SAT, and SEC Filings
Drawing a Conclusion
Tax evasion may be prevalent across the ChinaHybrid space. However, what we call fraud could basically be common practice in China and possibly acceptable, as evidenced by my attorney's findings that the punishment for tax fraud does not seem harsh. As ChinaHybrid supporters have expressed, SEC filings are likely a better representation of a company's financial standing than SAIC filings, at least for VIE structures. Auditors, knowing that the income tax paid is unreliable, are likely looking at the VAT tax, white receipts and the "real" numbers contained in "secondary books" to verify sales numbers.
I also don't buy that auditors are in the dark on this issue. I am learning that it common knowledge that many Chinese firms have more than one "book". I am not sure what to make of a situation where, in the case of an FIE, we know that the SAT and SAIC documents are identical, yet diverge from SEC filings. In actuality, the SEC document is what the Chinese company should have filed in the PRC. (It makes more sense that the tax liability should be logged as taxes payable).
Another conclusion could be that some of these firms are real but smaller than they purport to be. This would involve a much more intense due diligence process.
Navigating These Findings?
Even if we can come to the conclusion that SEC documents are more reliable than SAIC documents, should China Hybrids really expect to garner unconditional investor loyalty when a level of misrepresentation exists. The uncertainty surrounding this topic can still reduce the appetite and P/E expansion for the ChinaHybrid space, where many stocks have had muted reactions to spectacular 2010 second quarter financial results. The unfortunate circumstance is the collateral damage imparted on the quality companies.
In order to invest in this space you have to accept that what we may consider fraud is the norm in China. If all we have is tax fraud, it appears doubtful that China will levy punishment that would jeopardize the existence of so many companies. However, we cannot fully assume that serious monetary punishment will escape tax violators in the future. My lawyer's letter confirms this thought. It is more logical to assume that China will have to improve its tax system. Will monetary fines need to come from the company and necessitate capital raises to meet obligations? We also need to consider what interest the SEC may take in an issue where fraud and lax accounting oversight may abound. The Public Company Accounting Oversight Board (PCAOB) has already begun sniffing around the ChinaHybrid sector. (See more: http://pcaobus.org/News/Releases/Pages/07122010_SAPA.aspx and http://www.macpa.org/Content/25643.aspx)
Although SEC filings are likely more accurate, proving that they are 100% accurate would require firms to show why their filings don't match, or basically admit to some level of fraud and show us receipts. In the end, we have to trust auditors, a tough commitment now that we know of a few suspect FIE scenarios.
Our focus should be to use the available information in SEC documents, interviews and on premise visits to validate a company's story.
1. Follow the cash. Cash in the bank is the easiest source of funds to verify. In order to fool an auditor, the majority of companies would have to be conspiring with bank tellers to forge bank accounts. Thus, we would prefer companies with healthy cash balances. When filings are off, attempt to identify clues that prove SAIC files are junk. The example of cash matching SAIC filings when everything else does not match is an example. Reference companies that use cash that is greater than balances outlined in SAIC filings to that pay regular dividends or large special dividends, enact stock buy backs and to complete acquisitions. Furthermore, we know that many of these firms completed offerings. It would be odd for them to have virtually no cash on the books as evidenced in many SAIC filings.
2. Look for clues in credit ratings, which ironically the SAIC administers. For example, when observing a company that has no debt, pristine financial ratios, healthy cash balances and steady operating cash flow in SEC filings, a low credit rating could indicate a red flag.
3. While I am not a fan of debt, companies that utilize debt as part of a growth strategy were likely scrutinized by the lender.
4. Look for companies that have canceled an existing financing transaction or given weak excuses for changing ownership structures from a FIE to a VIE.
5. Realize that companies who retain top U.S auditors with a strong presence in China will likely get more investor love.
6. Be aware of companies with internal control problems as defined in SEC filings.
7. Be aware of more than routine changes in CFOs.
8. Understand that SAIC filings for FIE structures should match SAT filings.
Please Prove Me Wrong
Steve that is all that was posted. I do not believe we will hear anything but that is just my opinion.
We are talking 2009 SAIC filings here, and earlier. For the upcoming 2010 annual inspection reports it will be very different - there is no excuse for non-matching financial statements of any type with Chinese authorities anymore for a U.S. public company.
Rames would the Maj know if the 2010 filings match? If so, that would have been relevant and should have been included.
Sad and I'm down almost $50k today. Now I know how you guys felt with CCME.
The sad thing is I'm considering buying more ckgt.ob as I feel the cig business is going to go gangbusters. Sure hope I right!
What is the excersize price of warrants?
I see they have until 12/16/12 which is lots of time. TIA
Same responce I received. To bad we haven't heard any more info from Geoinvesting.
Kind of makes you wonder if they are buying. We will probably never know but in the event everything is OK then you have to wonder why Maj would post this with 90%+ RTO's reporting the same way.
This will be a credibility issue with Geoinvesting and again in the event they are wrong it goes to show how far people will go to make money. However, if they are right their credibility soars.
The problem as I see it with the ones who co-author these hit pieces have absolutely no risk involved. What needs to happen is for someone to sue the living snot and follow through.
Is their anyone on this board that has contacts to confirm the cig facility? If so, that lone is huge as their are many reasons for the inconsistant filing.
Who's buying and who's selling?
Is this yet another fraud?
I doubt it very much but then again you jut never know.
I would say this sector will be cleaned out much quicker than many suspect. Hopefully people will come out OK with CCME as I believe huge money is tied up within our sector on these stocks halted. Sure glad CKGT.OB had a decent report as that is where my money is tied up.
Agree. AS I said I believe after Q1 things heat up.
Cigs are huge!
Very pleased overall. We have audited results that should have met peoples expectations. I;m disappointed that we did not get a bigger bounce. Oh well...just continue to accumulate.
Relieved with the release and after all the disasters within our space. Again who is selling and why?
Being the only Chinese traded cig company this is only going to get bigger. The margins are improving and I have added after the release. This is the reason why:
"Cactus cigarette products opened enormous opportunities for our company in 2010 and we have great expectations for the future. We expect our agreements with both China Tobacco Shandong and Shandong Yishui Ruibosi will stimulate cigarette revenue to new levels this year and further broaden shareholder value,” Mr. Wang
Anyone buying after the release or is everybody selling after the fact?"
Where is guidance?
...if they don't report by lunch time, I'm going trim some back. Way too over exposed right now"
They have been notorious for reporting before or after market closes. IMO, it is a mistake but be assured if you sell and earnings are good the wash rul applies if you decide to buy back in.
Good luck.
Nervous nellies as the halts continue.
Yes, you certainly are going out on a limb to say that! "Cleaner than most".
Steve isn't it time you realize that the scrutiny going on here thanks to the shorts have brought this front stage with the spotlights on! This is no longer hidden and focused on a few select companies but ALL of them. The frauds are falling like dominos thanks to all the on-going DD currently going on. People are doing the work that these auditors should have been doing such as checking customer lists, verifying stores, bank accounts etc. Isn't it time the auditors take some responsibility for this mess? IMO, most of these recent frauds being exposed are because these auditor firms did not do their job.
"But it seems the fundamental problems that repeatedly get thrown up in our faces here stem from very deep-seated cultural differences in what constitutes appropriate business practices."
Total crap. These are crooks who embezzled money and lied. They did not follow the rules and should be imprisoned bottomline. Many good Chinese companies have PE's averaging 15+ with all safeguards. Auditor issues will clear most of this up as the lawsuits start. Auditors are a safeguard to protect shareholders and many have failed this fiduciary responsibilty.
All in all Steve, I see the speed and urgency of this issue to be a quick remedy as it has been full blown with DD never carried out to this degree by hiring people on the ground and actively looking for dirt. Once this is complete the legimate companys' will no longer be selling for PE's of less than 5.
While I don't see CKGT going straight to $3 I believe it will get a higher PE and after May 15 this whole sector will not only be much cleaner but a clear sense of transparency and legitmacy. Most low PE stocks are because of the fraud perception.
Lets hope for good news Tommorrow and guidance for 2011. MY conservative estimates for 2011 is $48 Mil.
Many people strictly go by GAAP vrs Non-GAAP. Personally I like NON-GAAP as it is much more accurate.
However, over the longer term not relevant IMO.
CKGT.OB from my understanding is looking to upgrade auditor.
IMO, uplisting to AMEX won't be far behind.
Agree.
IMO, this will prove to be one of the legitimate companys' within our space and eventually become a multi-bagger. Very very cheap and transparent and believable.
We will become a story stock and once again a CGS favorite!
Fraud is rampant in our space. The ones who finally pass the litmus test will be multi-baggers.
IMO, CKGT.OB will pass the test...now let's hope they don't do a PR between now and the 10k release. and postpone as others have been doing.
If the PR and outlook is as I expect I will not be selling for the small gains that many on CGS board are advocating.
Will we see a BSPM result in regards to the pop?
Going out on a limb here and predict our space will be cleaner than most very soon and get a green stamp approval for the legitimate company's after Q1.