China North East Petroleum Holdings, Ltd.(fka CNEP)

[Shengli]

Solid repost( not mine ) from the dark board


Opportunities Knocking, Hard
No one is giving 100 per cent guarantees but let's look at the information that is available before writting off this company. Are they in the right business? A no brainer, China needs all the oil it can get and will continue to need it for the forseeable future. No need to worry about a glut problem. Timely and accurate reporting of finances. We're just clearing that bunker so I'm reasonably confident that the numbers the company just reported are accurate. On that topic bear in mind that it wasn't misappropriation of funds, stealing or some other skullduggery that caused the problem rather it was the way the warrants and oilfield depreciation was accounted for. No small matter but correctable and hopefully already corrected. It is my opinion that the shorts and thier friends in the financial press are creating much of the bruhaha that is driving down many of the Chinese micros. Sloppy financials no doubt are part of the mix but the shorts blow it out of all proportion and kill the stocks. I say apportunity is knocking. What do we know? The stock was trading at $10.07 on Jan 4th, today we're at $4.70. For the first 6 months of 10 the company had production revenues of 32 million as opposed to 20.9 in 09. Additionally the recently aquired drilling division recorded 24.6 in revenues for 10, absent in 09. Cash on hand growing, 34.2 million on March 31st 10 to 46.5 million on June30th 10. I really love it when the bottom line growth keeps abreast of the top line. The downside for this period is that they haven't drilled any new wells. The upside is that they are financially positioned to make aquisitions, something that the company has hinted at. Owning our own drilling company should place us in the cat bird seat, in case you're not familair with the term, it's a good place to be. I bought in after the company started trading. At this price I will continue to add. There are many Chinese micros going for four to eight times earnings with CAGR's of thirty to fifty per cent or higher. They are mostly thinly traded therefore easy to manipulate. One day this will pass and many of us will be saying , how could I have not bought them when they were so cheap, plenty of cash on hand, 3 to 4 times earnings, top and bottom line growth of forty or fifty per cent. Knock Knock. In the previous post they asked how high, I could see it at $15 as soon as the financial press knocks off the distortions regarding the Chinese micros financials. On that subject, can anyone cite examples of outright fraud or theft on the part of management. I'm sure that it's happened but not to the degree that the press is inferring.


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