China Growth Stocks

[Shinisaurus]

Sinohub emails

ME:I'm interested in conducting on ground DD for Sinohub, as I'm interested in adding them to my fund. Would the company cooperate with my efforts?

Doug:We would be happy to assist, depending on the info requested. Clearly, we
can not disclose any proprietary or non-public information.

Please clarify what you mean by "on ground DD" - does this mean you'd like
to visit our facilities in Shenzhen? We would be happy to host you for a
tour of our Hong Kong warehouse, Shenzhen headquarters in Nanshan
District, and Mobile Phone ICM Factory in Ba'Oan District of Shenzhen.

You can get a good first review of the factory with these 15 video clips:
http://www.sinohub.com/investors-factory%20tour.html

Hope this is helpful.

If anything else, please let me know.
Best Regards,
Doug


*****************************
Douglas Paul Menelly
VP, Investor Relations
SinoHub, Inc. (NYSE Amex: SIHI)

Mobile (China) 86.139.2524.5053
Mobile (USA) 1.516.445.5387
[e-mail]

Me:Thanks for the invitation but I don't see any need to visit the facilites currently, instead because of your simple corporate structure, pulling SAIC filings is probably the most effective DD. So do you guys have copies on hand you could email me for Sinohub Electronics Shenzen Limited and Sinohub Electronics Shanghai Limited? If not I can have an employee of mine go and pick them up at their local offices, but he will need company consent to access them.

Doug:If you have employees local in Shenzhen and Shanghai, perhaps it would be
best for us to meet with them to talk about the company. That is the usual
process for due diligence and learning about a prospective investment.

Further, I find it a bit odd that you'd prefer to read documents instead
of meeting with executive management to build a relationship and get a
better understanding of SIHI, our business model, and the team.

Best,
Doug

Me:My purpose for research is to verify the legitimacy of Sinohub, as you know there has been alot of fraud in the Reverse Merger Space. Ironically I don't value factory visits or meeting with management nearly as much as viewing SAIC filings for a company. This may seem strange but my reasoning is simple 1. Factory visits are essentially meaningless, in determining legitimacy of a company, because alot of companies that have little or no operations running for most of the year will bring in trucks and run operations during investors visits in an attempt to prove themselves. CBEH just did this, according to SEC filings they should have 17 trucks entering their facilities every day to pick up biodiesal. Investors who visited the factory with Rodman & Renshaw saw five of these trucks coming just when they were there (and they believed the company was legitimate). An investigator watched their facility for 6 months counting trucks and excluding the five there for investor day, there was only 1 truck the entire 6 months (While the company claimed 100's, now those investors who bought off their company visit are down 75% on their investments).The point of this anecdote is unfortunately alot of Chinese RTO's will fake operations for investor visits, so in person visits are really almost useless except for the most blatant frauds.

And no I'm not a journalist but its probable that if I receive the filings, that'll they'll be published or referenced publically as I usually share my findings with CNBC reporters, TheStreet.com Writers, or Seeking Alpha Authors. My employees in China are essentially glorified errand runners/translators, they have no trading authorizations or anything else, they mainly just conduct research and retrieve information I want.

It is odd, I prefer reading documents, but as I've explained earlier factory visits aren't reliable indicators of legitimacy. Nor do I trust auditors anymore after KPMG, Deloitte, and others have signed off on blatant frauds (I do like Baker Tilly HK). While I do typically like meeting with management, unless its a conference format where I can meet dozens of companies management, I usually don't have time.

The SAIC documents for your subsidiaries, because of your simplistic structure with no VIE's, are really the best DD anyone can access and publishing them would invoke confidence in your company.

Doug:Send your folks to the offices, you're already tripping on your own words
stating you "are an individual investor" and that you also "work for a
fund" so it's clear you don't know what you're doing or what info you're
after - except for playing games.

So send your own people, do your own homework, and exhaust your own
resources to discover that SIHI is legit, by the book, and completely
clean. But by all means, knock on all the doors you wish, just don't
expect me to assist you in playing along with your games and your lies. If
you want me and SinoHub to be open and honest with you, as an investor
(which I don't believe), then we expect the same level of respect and
professional judgment on your end, which we are not receiving.

Good luck, and do not expect any further communication or cooperation from
me or anyone at SinoHub, as your efforts are wasting my time and the
resources of the company, which should be allocated to worthwhile projects
and investors . . . not people like you.

Doug


I sent a reply email that I won't post, but I'm going to pull the filings anyway. Me asking was just a professional courtesy, asking also is usually quite telling on the results.

Hopefully I just caught him at a bad time, but could someone email him and see if he'll agree to allow one of my employees to meet them at the local offices. As if I pull them without physically sending someone to pull them I can't be assured of their accuracy. TIA

I thought I nicely tried to explain why I value SAIC's for his company more so than sending someone to tour facilites and meet with management.