China Hongxing Sports

[winston]

Not vested. From Lim & Tan:-

With the stock having done very well and coming close to the upper end of its 2 year trading range and with its 2010 PE at 25x which is already more than market leader Li Ning’s 20x and Anta’s 22x, we maintain Sell.

http://www.remisiers.org/cms_images/res ... p10_LT.pdf

[winston]

Not vested. From Lim & Tan:-

The company’s joint auditors Foo Kon Tan Grant Thornton and RSM Nelson Wheeler have given notice of their intention to resign as joint auditors of the company at a general meeting of the company.

The joint auditors have confirmed that they have no disagreements with the board of directors on accounting treatments within the last 12 months (ie for year ended Dec ’09) and there are no matters of concern that need to be highlighted to the audit committee.

The company intends to appoint Ernst & Young as the new auditors, subject to receiving their consent.

[ichew]

Published March 1, 2011

LETTER TO THE EDITOR
Unusual share price movements need looking into
I REFER to the report 'Audit woes bedevil China Hongxing, Hongwei' (BT, Feb 28) which once again highlights the corporate governance and accounting-related issues that are unfortunately all too common for Chinese companies listed on the Singapore Exchange.

As part of their investigation of possible breaches in laws, regulations and listing rules, regulators should also examine the share trading in these companies surrounding the announcement of the significant audit issues.

In the case of China Hongxing Sports, the company requested for a trading halt on Feb 22, and announced the audit issues after the close of trading on Feb 25, followed shortly by a request for a trading suspension. The company's shares started showing significant price and volume changes before that.

For the one month before the trading halt, its shares had traded around a price range of between 15.5 and 16.5 cents.

On Feb 18, the closing share price was 15 cents with 8.2 million shares traded. On Feb 21, the closing share price was 14 cents with 38.2 million shares traded. By Feb 22, before the trading halt, the price had dropped to 11.5 cents with 86.3 million shares traded.

Hongwei showed similar trends prior to the announcement of the audit issues. It requested for a trading halt on Feb 24 and announced the audit issues after the close of trading on Feb 26. For the one month before the trading halt, its shares had traded around a price range of between 25.5 and 27 cents.

On Feb 18, its closing share price was 25.5 cents. By the time of the trading halt, this had dropped to 18.5 cents.

The enforcement of insider trading laws under the Securities and Futures Act has improved considerably in Singapore in recent years, after the change of regulatory regime and the introduction of civil penalties.

However, it is disconcerting to find such unusual price movements which seem to suggest that price-sensitive information was available to certain investors before it was publicly announced, and certain investors were able to sell their shares before the public announcements.

I hope the regulatory authorities will investigate fully these and other similar unusual price movements and take any necessary action.

Associate Professor Mak Yuen Teen

on hindsight:

FA would have highlighted tat one needs to siam this company
gg back the hongxing posts, (i re-read wat cif5000, bluechipstamp and financecaptain wrote)... glad tat fellow forumers can smell something MAY not be right here with the -ve CFO & pdor and highlighted here

[behappyalways]

Minorities' fury insufficient to halt 'rip off' offer by China Hongxing's former CEO Wu
https://www.theedgesingapore.com/minori ... mer-ceo-wu