China Growth Stocks

[viking86]

CNOA: I donot think they double counted the rev. from the sold rice business (ErMaPao), at least not in the 10Q and 10K reports, otherwise investors incl. myself would have noticed it. They clearly stated in 3q08 report the significant rev decrease from ErMaPao due to the shift of business model:

"The ErMaPao segment had a significant decrease in sales of both green and organic rice this quarter, which together declined to $771,800 as compared to $22,370,228 in the third quarter of 2007, reflecting the shift of the Company's primary focus to the trading opportunities in the agricultural industry and also increased amount of competition from other rice producers. ErMaPao sales for the nine months ending September 30, 2008 totaled $4,536,142 compared to $28,804,210 for the nine months ending September 30, 2007. This decrease of $24,268,068, or approximately 84.4%, is due to the same factors noted regarding the third quarter sales reduction."

The huge expectation for 3Q09 just came from the ssumption that the Ankang division which accounted for almost 100% of the 3Q08 rev of 47m and over 70% of 4Q08 rev. of 54m would be able to continue its 100% yoy growth into 3Q09 (based on previous quarters) plus the 30-40m from the new division (Dalian Huiming), resulting in 100m+ expected rev. The real question is why suddenly Ankang )their main rev producer until 2009) suddenly vanished into thin air without any mention in preceeding ER. This shows the risk inherent to many high flying OTC China stocks that we deal with and inherent to "putting all your eggs in one basket".