l****i
发帖数: 4609 | 1 这个股票我5 块多买的，7 块多出的,这个我买了的第二天还是第三天就涨了，根据TA
就是赚个快钱，没有打算hold 超过一个月
看下面这篇文章，没出的可能会非常不幸，看起来象个空壳公司？
A Troubling Visit To Cleantech Solutions
Wednesday, Nov 21, 2012, 9:22 AM ET | About: CLNT | Includes: CEAI
Richard Pearson
I am an activist investor in US and Chinese stocks. I was previously an
investment banker in New York Hong Kong and London for 9 years, focused on
Equity Capital Markets. I look at both long ideas and short ideas and
typically focus on a small number on names where I can spend the time to
conduct very deep research. My name is Richard Pearson and I spend my time
living between Los Angeles and Beijing, China.
Cleantech Solutions (CLNT) is a tiny $12.0 million market cap company which
describes its business as the manufacture of forged and fabricated products
for end use primarily by manufacturers of windmills in China. The share
price has nearly doubled in just the past week.
The share price history of Cleantech is very confusing to some people given
that it has now done two reverse stock splits, first doing a 1:3 reverse
split, then subsequently doing a 1:10 reverse split. As a result, although
the share price appears to have traded as high as $144.00 in the past, the
reality is that this stock has never traded above a real price of roughly $8
.00 in its entire history. When looking back at the share price history, it
is important to note that a past price of $30.00 really means that the stock
was trading for just $1.00 at that time.
Only briefly did it spike above $5.00 back in 2008, but since then it has
traded almost entirely at $5.00 or below. Again, a historical price graph
may give the reader a different impression due to the reverse splits but
this stock has simply never traded in the double digits, much less the
triple digits. Ever.
In early 2011 this was once again (following a reverse split) up to $4.50
per share, but was steadily trending down. It ultimately bottomed out once
again at just 25 cents earlier in 2012. The reverse split conducted in March
of 2012 caused the stock price to be once again restated as $2.50 and it
had stayed between $2.50 and $2.80 until just a few days ago.
The stock jumped substantially on the date of Cleantech's earnings release
due to stronger than expected reported sales as noted in its unaudited
financials. The obvious weak point, however, was that the company is now
down to just $960,000 in cash, which is only enough for it to survive at all
for about two more months given its rate of cash consumption.
Last year, I had the interesting opportunity of visiting Cleantech Solutions
in Wuxi, Jiangsu Province, China. This was only a few hours by plane from
Beijing, where I live in China, so it was certainly not an inconvenient trip
to make. I had been contacted by a shareholder who was a firm believer in
the company and had felt that at a price of $3-4 it was deeply undervalued.
It should be noted that my visit was prior to the company's 1:10 reverse
split, so in today's terms, that would have been viewed as a price of $30-40.
Without the reverse split, the nominal price for Cleantech today would
obviously be at 1/10th of where it is today, so $0.45 relative to the $3-4
at the time of my visit. As a result, based on my past history with the
company and the stock, I view Cleantech currently as a $0.45 stock not a $4.
57 stock. Basically, I continue to simply look at the overall value of the
company rather than just the nominal stock price.
I showed up at Cleantech on a Tuesday, prepared for a full day tour of the
facilities and interview with management. Management had been informed about
my visit some weeks before and I was told that they planned on putting on
quite a show of how their business was booming. However, the entire tour of
the facilities took less than 30 minutes because the operations were
conducted in a single, small open air warehouse.
The part that was intended to be so visually impressive was the ESR ("
electro-slag re-melted") production facilities and this was also said to be
the key driver of CLNT's huge future revenue potential. However, apparently
the ESR line takes time to heat up and start production, and it wasn't
running at all on the day I visited.
Instead what I saw was quite literally fewer than 10 employees (in total)
engaged in very low-end metal stamping of forged rings which are used in
windmills.
Including all members of management who were present, Cleantech had less
than 15 people on site on the day of my visit, which struck me as notable
given that its SEC filings had stated it employed several hundred people. I
distinctly wondered, "where are all of the employees?"
Ordinarily, I would try to be more understanding of the variation between
daily production output in a factory. However, at the time, Cleantech had
made it known that it was operating at absolute full capacity, meaning that
production should have been going full bore from dawn to dusk every single
day of the year. In addition, I had been promised that I would be shown the
state of the company at its absolute best.
Rather than give up entirely due to my disappointment, I decided to tell
management that this was clearly far from impressive and I came back the
next day. When I came back the next day, the situation was absolutely
identical with no ESR line running and again just a handful of employees
engaged mostly in moving (rather than production of) a small number of large
low-end metal rings.
For some reason, management couldn't really give me much of an explanation
for why these two particular days were so empty and devoid of any activity,
and it was notable that they did not in any way suggest that other days were
in any way more active. I was given a very clear understanding that I was
seeing a very normal day of operations at Cleantech. Management also didn't
have any answer when I asked about the whereabouts of the several hundred
other employees who should be present. Instead, management just encouraged
me about the company's very strong prospects going forward and assured me
that future profits were going to be exceptionally strong.
Another development I was told was very positive was the then-recent
appointment of Cleantech's new CFO, Fernando Liu. But as it turns out, I was
told that despite being CFO, Mr. Liu wasn't even living in China. They did
however let me know that Mr. Liu had visited Cleantech on multiple occasions
. In any event, it was unfortunate that I did not get the chance to ask him
directly about my concerns regarding lack of production or the lack of any
employees at the company.
As it turns out, Mr. Liu ended up resigning as CFO and as soon as Cleantech
passed its annual audit (which claimed a lofty $55 million in revenues), he
sold all of his shares in CLNT at prices as low as $1.58. He made these
transactions quickly in a period of just a few weeks, even though business
seemed to be booming (according to the SEC filings) and even though the
share price was now touching all-time lows for its entire history as a
company.
I took the view that if this was the most compelling display of activity and
commitment that management could muster for a 2-day visit of a potential
investor, then there was no way I could possibly invest in this company. I
left disgruntled at having wasted 2 days of my time to view a company that
clearly was engaged in no business whatsoever.
It turns out that I was correct in my assumption. Over the course of time,
Cleantech dwindled down from that share price of $3-4 to just 25 cents
during early 2012. At this time the company did the 1:10 reverse split,
taking the share price back up to a nominal level of $2.50. Even following
the recent run-up in the stock over the past few days, had I bought in at $3
.00 at the time of my visit, I would now be selling at the equivalent of
just $0.45 due to the impact of the reverse split, i.e. already a decline of
85% even at the recently higher price.
From the start, one major issue for me was Cleantech's choice of auditor,
Sherb & Co. This was all the more concerning given that Cleantech has had to
disclose that "management identified significant deficiencies" in internal
controls for preventing fraud, and that these weaknesses have been present
and unchanged several years without any correction to them.
During my visit to Cleantech, I had been assured that the company would be
upgrading to a Big 4 auditor "imminently," yet this still hasn't happened,
and there is no sign that it is in the works going forward.
Sherb has been the auditor of record for some of the most notorious Chinese
reverse merger frauds which were later exposed and delisted by the SEC and
the stock exchanges. (Links to delisting notices are included below).
There are two important points worth noting:
First, with the exception of Cleantech (and only Cleantech), all of Sherb's
Chinese audit clients now trade for just pennies even though many of them
were one-time high fliers trading at well over $10.00. As we can see, were
it not for the reverse split, Cleantech would also be trading at just $0.45
rather than at $4.57.
Second, it is very odd that many of these companies continue to put out
extremely positive press releases and filings. Quite surprisingly, the
positive stream of bullish new continues even after their delisting. In many
cases, the companies which are only $5-15 million in market cap report cash
balances in excess of $50 million. The only explanation for such a
discrepancy is that the market simply does not believe that the cash is
really there. In fact, if the cash were actually there, management could
simply use a small portion of the cash balance to buy up the entire company
and immediately pocket tens of millions of dollars for themselves. But
notably, this just doesn't seem to happen with any of these companies.
Chinese audit clients of Sherb & Co.
Ticker
Company
Price
Auditor
Status
CLNT
Cleantech Solutions
$4.57
Sherb & Co.
Still trading and listed !
CEAI
China Education
$0.45
Sherb & Co.
Delisted due to fraud
CHNG
China Natural Gas
$0.60
Sherb & Co.
Delisted due to fraud
CHLO
China Logistics Group
$0.01
Sherb & Co.
No audit committee
QING
Qingdao Footwear
$0.01
Sherb & Co.
Mgmt resignation due to fraud
CDII
Cd Intl
$0.12
Sherb & Co.
Delisted due to fraud
CPHB
China Pharmahub
No longer trading
Sherb & Co.
Ceased all filings
SDTC
Sentaida Tire Co
$0.01
Sherb & Co.
Never listed past OTC
SUWN
Sunwin Stevia
$0.20
Sherb & Co.
Never listed past OTC
SHZ
Shen Zhou Mining
$0.26
Sherb & Co.
Down 99% from $10.00 in 2011
OINK
Tianli Agritech
$0.83
Sherb & Co.
Down 90% from $8.00 in 2011
FRXT
Fuer International Inc.
No longer trading
Sherb & Co.
Never listed past OTC
In the case of China Education Alliance (OTC:CEAI), Sherb had even put out a
statement noting that Sherb had "performed enhanced procedures on the cash
balance," causing the shares to rocket back up to $3.50 before the company
was ultimately delisted. The huge run-up in the stock followed by a
subsequent delisting left many investors wondering what exactly was meant by
the phrase "enhanced procedures" which Sherb used to verify the cash
balance.
At the time, CEAI had just reported that it had generated over $35 million
in revenues in just the previous 9 months, so even at $3.50, the stock
looked very cheap as long as the audited results were in fact real. However
I had also just visited CEAI some weeks before and toured all of their
facilities in Harbin for an entire week. What I found was that in all of
their facilities combined, CEAI had no more than 300 students in total. The
obvious conclusion was that there was no way that CEAI could be generating
even just 1/10th of the revenues that it was reporting to the SEC.
Not surprisingly, China Education Alliance was subsequently delisted to the
pink sheets due to findings of fraud even after the assurances provided by
Sherb. However, just last week the company yet again announced stellar
results and reported a cash balance of over $65 million, in comparison to
the $4 million market cap for the entire company. The stock still trades,
but only a few thousand dollars per day and the price is just $0.45 on the
pink sheets.
Similar to CEAI, Cleantech has spent most of 2012 trading just $30-50k per
day, until days such as yesterday where it suddenly traded over $4 million
in a single day. In fact, despite the fact that there are only 2.6 million
shares outstanding for the entire company, nearly 1 million traded on just
Tuesday alone.
Conclusions:
I have been living, working and traveling in China for over 20 years. I
speak Mandarin quite well, and I also spent many years as an investment
banker on Wall St. I have visited over 100 Chinese companies during just the
past few years and I have seen some very good companies and some companies
which are engaged in egregious fraud.
In this case, I realize that I have the distinct advantage that I actually
had the opportunity to visit Cleantech in person and was shown the best side
that the company had to offer. I am not simply assuming that the
opportunity looks too good to be true, instead I have confirmed it in person.
Even when business was supposed to be booming at its peak, Cleantech
operations consisted of a single open air warehouse with less than a dozen
employees engaged in making a small number of simple, low-end metal rings.
But even for those who haven't had the chance to visit Cleantech in person,
the continued use of an auditor with a uniquely troubling history of signing
off on fraudulent financials as well as the continued lack of internal
controls at Cleantech should be enough cause for any sensible investor to
seriously question the publicly released numbers.
Now that Cleantech is back above $4.50, how low can this stock go once again
? Each time the stock falls back below $0.50, the company simply conducts
another reverse split to get the cosmetic price up high enough to keep it
from looking like yet another penny stock. And each time the stock briefly
rallies back to a notional level of $3-5. Afterwards, it quickly drops back
down to $0.50 again, which is where I expect it will find itself within a
very short period of time.
Following the huge run-up on Tuesday, I shorted Cleantech in the aftermarket
at a price of $4.68. If the stock rises more, I will gladly short more. And
in fact if the stock falls, I will also be shorting more.
The author can be reached at c******[email protected]
Disclosure: I am short CLNT. I wrote this article myself, and it expresses
my own opinions. I am not receiving compensation for it. I have no business
relationship with any company whose stock is mentioned in this article.
Additional disclosure: The author has lived, traveled and worked in China
for over 20 years and has an extensive financial background as an investment
banker on Wall St. The author also speaks Mandarin. | A*******m
发帖数: 2326 | | l****i
发帖数: 4609 | 3 所以我快进快出了
【在 A*******m 的大作中提到】
: 姐这一家我也觉着看着悬
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