Well, It's no longer Rub A Dub Soap!! Sentaida Tire Co LTD. This "may" be an excellent play on the incredibly fast growing Chinese auto market. If they survive, could be quite a bargain at these levels. At $.10/share, it's worth a bit of a gamble. From their last 10K.
"We primarily engage in the global marketing and distribution of tires and rubber without any tire manufacturing operations. Our business scope can be generally divided into three main business divisions: rubber import and distribution, tire export, and tire domestic wholesale and retail, which generated approximately 38%, 24% and 38% of our consolidated net sales respectively during the first quarter ended March 31, 2009. We position ourselves as an intermediary between international rubber producers and Chinese tire manufacturers and as an active marketer of tires for the tire manufacturers in the very fragmented replacement tire market. We aim to become a major player in the world tire and rubber market through steady organic growth, expansion into new markets, entry into the retail service market.
Affected by the global economic crisis, we have experienced weak demand both in tire and rubber markets. Revenues from three divisions all reduced dramatically: rubber revenue down 74%, tire export down 48% and domestic tire sales down 20%, respectively during the first quarter ended March 31, 2009 compared with the same period in 2008. We believe the soften industry demand and our weaken sales were due primarily to economic uncertainty, such as fluctuation in raw material prices, inflationary pressure on consumer behavior, lower auto sales and tire demand in overseas markets. We expect these conditions to continue to impact us during the following quarters of 2009.
Provision for Income Taxes
United States : We are subject to United States, or US, federal income tax at a tax rate of 34%. No provision for income taxes in the US has been made, as we had no taxable US income during the first quarter 2009.
British Virgin Islands : Our wholly-owned subsidiary Zhongsen Holdings, was incorporated in the BVI, and under the current laws of the BVI, it is not subject to income taxes.
PR C : In China, the Corporate Income Tax Law and Implementing Rules, or the CIT Laws, impose a unified CIT of 25% on all domestic-invested enterprises and foreign invested entities, unless they qualify under certain limited exceptions. F.T.Z. Sentaida and Qingdao Sentaida are subject income tax at a tax rate of 25%.
Under the CIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to CIT of 25% on its global income. The Implementing Rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that the Company should be classified as a resident enterprise, then the organization’s global income will be subject to PRC income tax of 25%. "
