China Growth Stocks

[rru2s]

LTUS is positioned very well with their construction nearing completion, a good mix of prescription drugs selling to 70% hospitals, and good top management.

I agree that trying not to over-extend with starting a new expansion project in Inner Mongolia while still finishing a few months yet on the new facility might not be wise for cash-flow, and investors might not react well to future dilutive financing.

The knee-jerk reaction of the market to today's news might be neutral since investors love to hear about more expansions rather than core-refocusing. However, the longer term impact on PPS should be very positive since it gives investors more confidence that there will not be poor cash flow management that might go along with dilutive financing if LTUS had instead tried to run 2 major expansions simultaneously.