US - Chinese Companies Listed in the US

US - Chinese Companies Listed in the US

Postby persistentone » Thu Jul 02, 2009 2:59 am

Per the instructions of the system administrators, I am creating this new topic as a cross reference to track Chinese companies that are listed on the U.S. Markets (e.g., NASDAQ, NYSE, AMEX, Over-the-Counter, or Pink Sheets). The actual stock discussions are being listed in the U.S. exchange categories, and the intent here was to create a pointer to those discussions.

If you create a new Chinese company in the U.S. exchange sections, please set up a document in this topic with pointers to it. It might be nice if you maintained all of your pointers in a single document rather than creating too much different messages in the thread. You can Edit your post periodically when you post additional companies.

The ones I have created so far:

AgFeed Industries (FEED) which I created at viewtopic.php?f=55&t=2027

FUQI Intl (FUQI) which I created at viewtopic.php?f=56&t=2023

Harbin Electric (HRBN) which I create at viewtopic.php?f=56&t=2022
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Re: China - Companies Listed in NYSE/NASDAQ (including ADRs)

Postby winston » Sat Sep 18, 2010 7:26 am

The "Made In China" brand is alive and kicking. And I'm still very sore for losing some money on the S-Chips in Singapore. The company's financial numbers were ok yet they went under because their CEO ran away...


Chinese Stocks: More Trouble Than They're Worth? By Eric Rosenbaum

NEW YORK (TheStreet) -- Are accounting blow-ups a fundamental risk of investing in Chinese stocks, or just another unfair reputational knock against the emerging world giant's economic juggernaut?

The latest accounting blow-up involving a Chinese stock occurred on Monday. It concerns not just one, but two affiliated Chinese companies, Duoyuan Printing(DYP) and Duoyuan Global Water(DGW).

Duoyuan Printing announced a number of changes on Monday that led to the selloff. The chairman announced that the CEO and CFO of the company were being replaced, and the Deloitte Touche Tohmatsu had been fired as auditor after bringing issues to the attention of Duoyuan management which remain unresolved.

Duoyuan Printing was down 54% on Monday, while Duoyuan Global declined by 41%. While Duoyuan Global Water's share bleeding had stopped by Wednesday morning, selling of Duoyuan Printing shares didn't cease until Thursday's action.

Earlier this year, Chineses poultry company Yuhe International(YUII) took a market beating after its auditor, Grant Thornton, resigned. Yuhe says it was misunderstanding between the Chinese company and the auditors over provisions of Sarbanes-Oxley that the Chinese management did not understand. ... L_wal_html
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Beware & Protect Yourself 03 (Sep 10 - Jul 11)

Postby winston » Thu Dec 23, 2010 11:11 am

After scamming the Singaporeans, they are trying their luck with the Americans. Catch them if you can ...

SEC Auditor Probe Signals `Buyer Beware' for China, ISIG's Straszheim Says

The Securities and Exchange Commission’s probe into auditors of China-based companies listed on U.S. share exchanges is a signal for investors to approach these stocks with caution, said International Strategy & Investment Group.

The SEC on Dec. 21 sanctioned a California audit firm for signing off on fraudulent financial statements made by a Chinese energy company. Auditors have come under scrutiny for signing the financial statements of China-based firms accessing U.S. markets through reverse mergers, in which a closely held company acquires a publicly traded company and can then sell shares without an initial public offering.

“This is the ultimate ‘buyer beware’ sector of investing,” said Donald Straszheim, director of China research at ISI, who was ranked first in the Macro and Economics categories in Institutional Investor magazine’s 2009 survey.

Individual investors “would perhaps be well served to just stay away. Even the most sophisticated institutional investors in the world often avoid the opacity and risks,” he said.

Straszheim, who is based in Los Angeles, estimates there are “hundreds of tiny companies in China” that have sold shares in the U.S. through reverse mergers, aiming to tap into booming demand from U.S. investors who want access to the Chinese economy.

Xia Lihua, a spokeswoman at the China Securities Regulatory Commission, declined to comment on the SEC probe.

SEC Claims

Moore Stephens Wurth Frazer & Torbet LLP of Orange County, one of several firms that have fallen under the SEC’s scrutiny, “did not exercise professional skepticism and due professional care” in audits of China Energy Savings Technology Inc., which was ordered to pay about $35 million in March 2009 for overstating revenue, the SEC said in a statement on Dec. 21.

China Energy Savings has been delisted. Calls to the company’s Hong Kong office weren’t answered.

Dean Yamagata, the partner in charge of the audit, was barred from practicing as an accountant for at least two years. Frazer and Yamagata didn’t admit or deny the allegations. To settle the SEC’s claims, Frazer and Yamagata agreed to pay $129,500 and retain an independent consultant for training in fraud detection, auditor independence and other duties related to auditing functions.

The SEC has identified “hundreds” of such small companies “where about 100 percent, not 95 percent, 100 percent of the operations are in the People’s Republic of China” and the financial statements are signed by a small U.S. auditor, Wayne Carnall, chief accountant of the SEC’s division of corporation finance, said at a Public Company Accounting Oversight Board meeting in April.

Legal Requirements

“It’s more of those accounting firms’ own issues and problems,” said Hubert Tse, a partner at law firm Boss & Young in Shanghai. “It’s their job and responsibility to work that out and to make sure the IPO applicants comply with all relevant U.S. legal and listing requirements.”

The PCAOB, which was created by the Sarbanes-Oxley Act in 2002 to oversee auditors of public companies, is looking for ways to hold U.S. auditors accountable for work they outsource to China-based audit firms.

“The news about SEC investigations is not surprising,” said Michael Yoshikami, who oversees about $1 billion at Walnut Creek, California-based YCMNet Advisors. “Standards for transparency have a way to go to reach a level where one can expect accuracy. Still, this does not change our view that Chinese companies will account for a growing percentage of IPOs.”
[b] ... -says.html
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Re: China - Companies Listed in NYSE/NASDAQ (including ADRs)

Postby winston » Thu Jan 13, 2011 7:02 am

Ha Ha ... and he sold off all his Chinese shares ...

China Investor Comes Clean By Zack Buckley

Alan Greenspan) was the only one who promptly said 'I was a horse's ass' ... I think we need more of that sort of thing. -- Charlie Munger

NEW YORK (TheStreet) -- Over the past two years, I have not only been buying and recommending Chinese companies to other investors, but I have also had a substantial amount of my own portfolio invested in Chinese companies listed on U.S. stock exchanges.

Many of these companies seemed like an investment opportunity of a lifetime, so I set out on a trip to China in an effort to understand them better and confirm that they were indeed excellent investment opportunities run by honest, capable Buffett-type managers. Instead, my trip had the opposite result. ... L_btb_html
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Re: China - Companies Listed in NYSE/NASDAQ (including ADRs)

Postby winston » Wed Apr 06, 2011 7:37 am

Fraud probe into Chinese firms listed in the US

The United States' Securities and Exchange Commission has launched a fraud investigation into Chinese companies whose shares trade in the US, following a surge of accounting scandals.

Source: SCMP
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US - IPOs ( General News )

Postby Atlas » Thu May 12, 2011 6:42 pm

Not sure where to put it. Winston, please move it where it belongs.

This is hillarious: ... sight.html

US Listed Chinese Company Troubles. Hidden In Plain Sight. : China Law Blog : China Law for Business

A few months ago, I wrote about Muddy Waters, a hedge fund that targets dodgy US-listed Chinese companies, shorts them and then documents their fraud. They now have an impressive list on companies that they have exposed, including China Media Express, Duoyuan Water and RINO International. These companies appear to have two things in common: they did not have real businesses—or at least not at the levels they claimed, and they all went public through reverse takeovers (RTOs). We have written about the RTO industry here and Barron’s has an excellent piece on it here.

Short sellers love RTOs because the fraud tends to be blatant and so easy to uncover that it does not take long to put together a damning report. It’s been a known scam for so long that we were even told in 2006 the practice was not long for this world. Well they are still here.

But it is becoming increasingly apparent that if many RTOs are scams hidden just under the surface, China’s frothy IPO market has a few duds that you need only read public filings to uncover. It turns out that companies which go through the standard IPO process—with big-four auditing firms and well known underwriters—often have just as many problems as their RTO counterparts. But they actually document their issues.

Three separate examples of Chinese companies that went through the IPO process should raise bright red flags for investors for different reasons: NetQin, VisionChina and RenRen.

NetQin: This is probably the most obvious problem child of the group. NetQin’s business is anti-virus software for mobile phones. The fact that this company was able to list at all is surprising, given the following information in its own SEC filing:

On March 15, 2011, a live program broadcast by China Central Television Station, or CCTV, the national television broadcasting network owned by China’s central government, in celebration of China’s consumer rights protection day, reported various complaints of certain alleged fraudulent practices by Beijing Feiliu, a company in which we hold a 33% equity interest, and by us. Such alleged fraudulent practices generally included, among other things, uploading malware or viruses to imported mobile phones to promote our mobile security products.

Netqin’s SEC filing goes on to say:

Although we do not believe that we have committed any wrongdoings and we do not have any reason to believe at this stage that Beijing Feiliu has engaged in any fraudulent practices, CCTV has wide coverage and perceived authority over public opinion and the negative publicity by CCTV and other media about Beijing Feiliu and us may have adversely damaged our brand, public image and reputation, which may seriously harm our ability to attract and retain users and result in a material adverse impact on our results of operations and prospects. For example, as of the date of this prospectus, each of Nokia, China Mobile and China Telecom has removed our applications from its respective official online mobile application store

One thing you have to say about these guys is they have serious chutzpah: not only did they IPO only weeks after the damaging CCTV report, but they filed the paperwork for the IPO the day after the report aired.

Best case scenario: The accusations are false, but most of their partners are nonetheless backing out of cooperation agreements.

Worst case scenario: Netqin only protects consumers from viruses that a subsidiary creates and loads onto their cell phones.

At least investors were paying enough attention to make Netqin the worst performing IPO of the year.

VisionChina: You may remember these guys who do outdoor television on buses and subways for their ongoing lawsuit with the former investors in DMG, a competitor VisionChina bought. VisionChina appears to have played some games that warrant a second look. According to public documents

VisionChina went public via standard IPO in late 2007.
In April, May and June of 2008 it bought six industry players. While the six deals together were cumulatively material to VisionChina’s business, the company deemed each individually not to be. This allowed management to skip SEC filings announcing the specifics of each of the acquisitions.
It also allowed them to bury an interesting feature of all six contracts in a quarterly earnings release. VisionChina structured the deals as “earn outs,” which allowed VisionChina to immediately report all of the revenue from the acquisitions before actually integrating the company or incurring large expenses. Of course, this is only an advantage if you need to boost short-term revenue, which leads us to the following:

VisionChina held a follow-on offering in August 2008, months after the six acquisitons, while revenues were still high from the boosted income flowing from the earn out deals. According to the SEC filing, the chairman and CEO of the company (Limin Li) and two directors (Yanqing Liang and Yunli Lou) sold 3.7 million shares into the offering at $16 a share for a total of more than $60 million. Not bad, considering this was only eight months after going public.
The stock price collapsed when the financial crisis hit a month after the offering. The share price has never able to recover its mojo as the earn out acquisitions were never integrated. In fact, in a March 2010 earnings call, management seemed to admit that the earn out structure had always been doomed to failure, when then-CFO Scott Chen, who was not involved in the original earn out purchases, said:
These earn outs are coming to an end. This is of course by design. I for one do not believe in the benefit of long term earn outs. I think there are better ways to manage, to incentivize sales forces and to incentivize management. So I think this is a good thing that these earn outs are coming to an end….

* * * *

earn out related revenue has been a decreasing percentage of our business over the year 2009. For the fourth quarter, earn out related revenue accounted for about 35% of our total revenue.

Analysts read this to mean that 35% of VisionChina’s fourth quarter revenue would soon disappear, and following the conference call, its stock price fell 37% in a single day as it dawned on investors that none of its six earlier purchases had been integrated for long-term sustainable revenue contribution. The stock price now hovers around $4, about one quarter of the price at which management had sold so many of its shares. Lucky them.

Best case scenario: Management got extremely lucky in the timing of the follow-on offering and mismanaged the integration of the six acquisitions.

Worst case scenario: Management deliberately structured the six acquisitions to boost short-term revenue so they could cash in and leave investors holding the bag.

Renren: As you’ve no doubt heard, these guys are the Facebook of China, except without the cool movie. Maybe anyway.

When Renren filed its F-1 with the SEC, one number in it raised more than a few eyebrows. Kai Lukoff of TechRice summed it up well:

By far the most surprising finding in Renren’s F-1 filing for IPO? After two years of sluggish growth (Dec 2008-Dec 2010), Renren claims explosive active user growth over the last 3 months to the end of March 2011. It claims to have added as many active users over the past 3 months as it did the previous two years (7 million monthly active users (MAU))

He added:

Could this in fact be a surge in Renren’s popularity? Just a seasonal difference (less usage in December and more in March)? Or just a reflection that all of Renren’s log-in numbers are “approximate”? A massaging of the “approximate” numbers for the IPO?

None of my contacts in the tech industry report a surge in Renren’s popularity (if anything the opposite), but chime in if you know different.

As it turns out, Kai nailed it on the head as Renren had to change its F-1 filing a week later. Reuters reported:

According to the revised filing on April 27, the Chinese Facebook clone’s monthly unique log-in user base grew by only 5 million, or 19 percent, in the first quarter of 2011 — not the 7 million, or 29 percent, it reported in its first filing.

That did not stop Renren from having a gangbusters opening day (albeit followed by a very weak day 2).

Best Case Scenario: Renren had problems accounting for how many new users were actually active or else it inadvertently attributed two quarters of growth to one.

Worst Case Scenario: Renren thought no one would notice that its numbers were highly inflated.

Bottom Line: Whether you are looking for a JV partner, involved in a merger or acquisition, buying product from a Chinese supplier, or buying Chinese stocks, you must always do your homework/due diligence. Because sometimes scams are sitting in plain view and sometimes they are not.

What do you think?
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Re: China - Companies Listed in the US & ADRs

Postby winston » Sun May 29, 2011 7:39 pm

Made In China ...

The Best Way to Limit Your Risk in China by Carl Delfeld

Here’s a quick rundown of some of these backdoor China IPO’s that have run into deep trouble – along with their current problems:

• China Agritech – Shareholder lawsuit pending. Dismissed its auditor, Ernst & Young.
• China Sky One Medical – Under investigation by the SEC.
• Orient Paper, Inc. – Re-auditing previous financials due to license issues with previous auditor, (Davis Accounting Group).
• China Electric Motor – Shareholders lawsuit filed, claiming underwriters violated federal securities laws by issuing materially false and misleading information.
• China Natural Gas – Class action lawsuit alleges directors and officers issued materially false and misleading statements. CFO of company resigned in late 2010.
• Duoyuan Printing – SEC investigating company for fraud; NYSE de-listed April 4, 2011.
• China MediaExpress Holdings, Inc. – Deloitte quit as auditor because “no longer able to rely on the representations of management.” CFO resigned. Stock trading halted March 11.

Why Investors Should Steer Clear of Backdoor China IPOs ... china.html
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Re: China - Companies Listed in the US & ADRs

Postby winston » Fri Aug 19, 2011 4:51 pm

Now that it has hit it's own citizen, they may be more motivated to go after the crooks.

When the pets were dying in the US from melamine tainted petfood, they were dragging their feed. But when 300,000 of their own babies are affected by melamine milk, then there's pressure to do something.

Same like the S-Chips, they dont care if the Singaporeans are getting fleeced. The "Made In China" brand is not worth a single cent anyway.


Chinese Protest $5 Billion Loss Tied to U.S. Stock Market Reverse Mergers

Four wrinkled pieces of paper are all that remain of Xiong Renzhi’s Nasdaq-fueled dream of a comfortable retirement in the southern Chinese city of Nanchang.

The certificates gripped in the former electrician’s sinewy hands represent 46,000 shares of Xi’an Xilan Natural Gas Co., which he bought in 2006 for 166,000 yuan ($25,990) by selling his apartment and moving in with his sick mother-in-law. Xiong, 62, said he expected returns many times his outlay when the natural-gas distributor listed on New York’s Nasdaq Stock Market, which it did on June 5, 2009.

Like thousands of Chinese who bet their life savings on companies aiming for U.S. listings -- some of them among firms that later cost U.S. investors billions of dollars -- Xiong and his wife are still waiting for a payout. ... rgers.html
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Re: China - Companies Listed in the US & ADRs

Postby winston » Mon Aug 29, 2011 9:20 pm

China's Longtop gets Wells notice from SEC

NEW YORK, Aug 29 - Longtop Financial Technologies Ltd <LGFTY.PK> said on Monday it may face civil charges by the U.S. Securities and Exchange Commission, signaling stepped-up regulatory enforcement of possible accounting irregularities at Chinese companies.

In an SEC filing, the maker of software for Chinese financial services companies said it received a "Wells notice" from the SEC on Aug 24. Such a notice indicates that SEC staff plans to recommend that the Commission take legal action, and gives a company a chance to mount a defense.

Longtop said the Wells notice stemmed from its May 23 announcement that auditor Deloitte Touche Tohmatsu CPA Ltd had resigned, and that the company's annual reports from 2008, 2009 and 2010 should not be relied upon. It also said the SEC will decide whether to suspend or revoke its securities.

In May, Longtop linked Deloitte's resignation to what the auditor called "recently identified falsity" in company financial records, and "deliberate interference" by Longtop management in the audit process. Longtop's chief financial officer, Derek Palaschuk, resigned that month.

Longtop is among the largest Chinese companies linked this year to potential accounting fraud, often by research firms and short sellers such as Citron and Muddy Waters.

Since March, roughly 30 Chinese companies have seen their auditors resign, and more than two dozen have been delisted from U.S. exchanges.

Based in Xiamen, Longtop had a $1.08 billion market value prior to a May 17 trading halt. The New York Stock Exchange is delisting its American depositary receipts. The ADRs closed Friday at 66 cents on the Pink Sheets.

Source: Reuters US Online Report Business News
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Re: China - Companies Listed in the US

Postby winston » Fri Sep 30, 2011 6:30 am


Some of the better listed Chinese companies got burnt today in the US.

Looks like they are throwing out the baby with the bath.

Time to start monitoring some of these better companies.

Hint: I'm not talking about those junk who got listed in the US thru RTO
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