Replies to post #55486 on China Growth Stocks

[Drexion2004]

BORN: Personally I would not touch this company since i've been told by a source who got their SAT files that they do not match the SEC filings. When the source tried to verify the information with the company, they stopped answering.

No idea if the SAIC matches but if the SAT does not I'd stay away. At best that seems to mean tax-fraud to me (Which is probably common practice in China, especially for Private companies).

I also found that SA article to be quite detailed, knowing almost nothing about the company business myself (Definitely 0 DD), the article was persuasive...Especially with the SAT not-matching information I had heard before.

-Fernando

[ratobranco]

BORN - the problem here is that the gross margins that Little calculates, 6-7% (compared to the SEC reported 20+%) are roughly the same margins in BORN's alleged 2009 SAT income statement, where BORN reported a loss.

In specific, the gross margins for 2009 per the alleged SAT filing are 5.8%, much closer to what Little calculates than the SEC filing.

In fairness, the gross margins for 2008 per the SAT filing are 22%. So maybe the alleged SAT filings are garbage. We just don't know.

The problems with BORN as I see them:

1) Alfred Little makes good arguments.

2) The alleged SAT filings, which are supposedly audited, show losses.

3) The company sold shares in an IPO at less than 4 times earnings. It's hard to understand why a company with cash growing at 100% in a sexy chinese consumer industry would do that.

Let's see how the company responds.

[systrader]

BORN - I hope this stock goes below $ 15 by Friday so that CCME can take it's place in the IBD 100!

Joking of course. I don't wish anyone here ill will except for CCME shorts.

At $ 15.17 now, down $ 3.63.

I should have shorted it when I read the article. It was only down $ 2 then.