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SSKILLZ1

11/23/10 7:09 PM

#2344 RE: Shengli #2343

That is my personal rating system on china stocks. I only did It on China Stocks up until this point. I haven't disclosed it too be honest, although some of my personal feeling on china stocks have come out when I talk about an individual stock. I Follow about 45-50 china stocks at the moment, whether my opinions are right, who knows I could be completely wrong on my feelings for all I know.

My Personal Criteria For Ratings (A-D Rating Scale.)

1) Cash/Cash Flow From Operations And A/R. If you don't do well on this test your almost guaranteed to be a C or D in my system.

2) Growth, How is it? It doesn't have to be top notch to get a good grade, But NI and Revs need to be growing at least 10-15% if you don't that is a good way to get a C or D.

3) If you have missed or lowered Guidence generally you go to a c or a d.

4) If you are an OTC you can only be rated a B at Best.

To Me and A should Trade at 8-10 PE
To Me and B should Trade at 7 PE
To Me and C should Trade at 5 PE
To Me and D should Trade at 2-3 PE

Obviously the goal is to find a stock trading at C or D valuation that you feel is a A or B Rated Stock, because that in theory is how you should make money. Is my rating system somewhat subjective, absolutely, and I will say again it is not for everyone, but that is how I choose to invest through my DD. Whether I will be proven right or wrong Time will tell. As investing in any microcap stock is very risky. All is just my opinion, and I could always be wrong though.