China Growth Stocks

[Rames]

Rodman out defending LIWA

Following the publication of Seeking Alpha article on December 16, 2010 titled "Lihua Financial Reports Raise Questions", we have conducted an investigation that included speaking with the Danyang State Administration for Industry and Commerce (SAIC) office and checking the company's financials submitted to the Chinese authorities. Our checks revealed that the financials on file with the local SAIC agency are identical to the 2009 numbers posted on Lihua International's official website for both subsidiaries - Lihua Electron and Lihua Copper. This, along with the reconciliation of SEC and SAIC numbers, posted on the same website, reaffirms our view that there are no inconsistencies between Lihua's SEC and SAIC filings. We view the recent unwarranted pullback as a compelling buying opportunity ahead of the quarter and reiterate our Market Outperform rating and $20 price target.