Lotus Pharmaceuticals Inc (LTUS)

[PaigeCoverdale]

No, there is some concern over some land they bought and now may sell.

Some think that the land deal is not being disclosed properly and that the property may not be worth as much as stated. There is a lot of money wrapped up in it and if they lose that money it could put the company in financial trouble. Others think, they simply decided not to use the property and are now going to sell it and recoup the money and maybe even a profit.

Here are some posts from Investorshub:China Growth Stocks: LTUS - I've been looking into industrial land values in China and I'm sure having problems seeing how the appraiser came up with such a low land value for the inner mongolia property. According to Maj, the appraiser said the value of the property when LTUS made the purchase was 60rmb/mtr and at current values is about 70/ mtr.

In China, these land prices are set by the chinese government, specifically the Ministry of Land and Resources. Now, here is a link to an article that says back in 2007, China's ministry of land and rescources mandated that the absolute minimum price of industrial land was set at 60rmb/ mtr and that was only for a few isolated counties in the Xinjian province in northwest china up to 840rmb/mtr for property in the suburbs of Shanghai. The average price paid for land rights in all of China was 721rmb/ mtr. LTUS paid 218 million rmb for the land or about 326rmb/mtr. That is less than half of the average price paid for land rights and certainly doesn't seem out of line for an industrial park located 2 1/2 hours drive time from Beijing.

There is no way I can see that this property should or even could have been valued at the absolute minimum price for industrial land in all of China. The price actually paid for the property seems well within reason to me. This appears to be a bad appraisal report that was given to Maj. With the chinese economy booming again, LTUS could well be able to sell the property for a tidy profit too. LTUS land is 2.5 hours from Beijing. Here's the link: http://www.chinadaily.com.cn/china/2009-05/14/content_7778667.htm

Inner Mongolia is huge, but there is a piece of it very close to Beijing, which is where LTUS bought the land. http://www.thefreelibrary.com/Lotus+Pharmaceuticals,+Inc.+Purchases+Land+Use+Rights+to+Grow+its...-a0193131593

About the Chahaer Industrial Park
Creation of the Chahaer Industrial Park was approved by the State Council in 2003 as an important means of assisting the under-developed western regions. It consists of 10.41 square kilometers of land located in the county of Chayouqian of Wulanchabu City in Inner Mongolia, around two hours and thirty minutes driving time from Beijing. A number of the Chinese government's preferential tax and operating subsidy policies automatically cover companies located in the park. About one third of the park is currently occupied. Information about Chahaer Industrial Park is available at: http://www.cyqq.gov.cn/ .

LTUS The land in question is practically Beijing suburbs.

geography of china is very easy to find on google, if you know anything about chinese characters. i found the area on the first try, 250 km from Beijing on the way to Hohhot. DLouis' info is accurate.

I've been to almost every province in China. Xinjiang is mostly desert, several days worth of driving away from any major population area to the east. It would make no sense for land 2.5 hours outside of Beijing to go for the same price as the cheapest land in Xinjiang. The land is also very close to Hohhot, the capital of Inner Mongolia. The land is located in a corn belt, making it a prime location for processing corn starch, which has many industrial uses. LTUS planned to use it to make IV solution. The corn industry is tightly regulated, and very few new starch projects are being approved at present. I came across this info researching ABC. This may be part of the reason LTUS is scrapping the project.