Research Note: Good Life China Corp (Pink: GLCC)
Last Updated: June 19, 2008 – 1:37pm EST
NEW YORK--Ludlow China issues research opinion on Good Life China Corp. (Pink:GLCC), growing chain of Convenience Stores in rural areas of Hebei Province, China.
SUMMARY
Good Life China, a chain of retail stores in Hebei China has recently been making some noise in the market due to their wild share price drops. The company came public in April 2008, and since then the company has seen their share price drop from around $0.50 a share to around $0.01 per share. The stock has seemed to recovered back to the $0.05 level, but a number of recent events need to be considered before investing into the company.
On June 13, 2008, the company announced the withdraw of a common stock share dividend as they believed they were the victims of a naked shorting activity. This may be true, but withdrawing dividends makes the company look unstable and unfocused.
On June 16, 2008, the company announced the reduction of 25 millin shares from the shares outstanding, which is always a good thing. Mr. Yang a company spokesperson said, "Just so that we are clear, and to avoid any possible misinterpretations this further 25 million shares is in addition to the 12 million shares dividend recall, bringing the total count to 37 million share reduction. When all the dust settles with all of the reductions, recalls and planned buy backs, our outstanding share structure may be about 100 million shares, more or less, with Asia Pacific (the holding and controlling company of GLCC) being the majority shareholder." Unfortunately, around 100 million is not an exact number and does not provide the market with a true transparent view of the company share count.
On June 16, 2008, the company also announced they had received interest from an unnamed European based publicly traded holding group as a possible buyout of Good Life China Corp.
On June 18, 2008, the company announced a preliminary approval for a $5 to $10 million line of credit facility through a New York based corporate financier. But, most financial investment firms would not invest in a company without US GAAP audited financials.
Good Life China may actually be a good and fast growing company, but they fail to realize that without proper investor communications in the US, and audited US GAAP financials the market will not take Good Life to a be a safe or reliable play in the Chinese retail arena. The company should have done a better job in structuring this deal before going public.
Ludlow China currently is issuing a 'speculative' D rating on Good Life China Corp with no price target at this time.
About Good Life China Corp.
The Company has enjoyed meteoric growth rates over the last 10 years, growing from a mere 8 stores in 1999 to almost 1,600 in 2007, becoming the largest chain store network of convenience stores serving more than 2.4 million people in the rural areas of China. www.goodlifechina.com
About Ludlow China Ventures
Based in New York City, Ludlow China Ventures is a venture capital and research firm with a specific focus on the Chinese market. Ludlow China owns and operates the Ludlow China Indices, which tracks a wide basket of US traded large and small cap Chinese stocks. www.ludlowchina.com
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Contact:
Ludlow China Ventures, Inc
Gerry Salazar
Phone: (718) 855-8451
Email: gerry@ludlowchina.com
Disclosure: This is NOT a solicitation to Buy or Sell any security, but rather is for research purposes only. Content contained herein includes facts, views, opinions and recommendations of individuals and organizations deemed of interest. Ludlow China Ventures does not guarantee the accuracy, completeness or timeliness of, or otherwise endorse these views, opinions or recommendations, or give investment advice. Ludlow China Ventures, its affiliates, or directors, may or may not hold a position in the above security from time to time, and investors are encourage to consider this as a possible conflict of interest when reviewing this information. In Compliance with SEC Rule 17B Ludlow China Ventures was NOT compensated for the distribution of this research material, but may hold the company in its privately managed China fund, which should be considered a conflict of interest.
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