China Green Material Technologies (CAGM) FY 2010 Results

10-K (FY 2010 results)

CHINA GREEN MATERIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2010 AND 2009

		Years Ended December 31,
		2010				2009
Revenues		$	20,042,025			$	13,407,287
Cost of Goods Sold			11,252,625				7,052,854
Gross Profit			8,789,400				6,354,433
Operating Expenses
Selling expenses			242,378				238,274
General and administrative expenses			1,647,891				792,587
Stock based compensation			167,163				-
Total Operating Expenses			2,057,432				1,030,861
Income From Operations			6,731,968				5,323,572
Other Income (Expenses)
Interest income			8,586				5,635
Interest expense			(316	)			-
Net rental (expense)/income			(123,163	)			24,057
Impairment of investment			(300,595	)			-
Loss on fixed assets disposal and intangible assets written off			(126,728	)			(459,695	)
Other (expense) income, net			(21,992	)			567
Total Other Expenses			(564,208	)			(429,436	)
Income Before Income Taxes			6,167,760				4,894,136
Provision for Income Taxes			925,207				738,810
Net Income		$	5,242,553			$	4,155,326
Foreign Currency Translation Adjustment			1,270,375				(20,380	)
Comprehensive Income		$	6,512,928			$	4,134,946
Net Income Per Common Share -Basic and Diluted
-Basic		$	0.21			$	0.22
-Diluted		$	0.21			$	0.22
Weight Common Shares Outstanding -Basic and Diluted
-Basic			24,457,767				18,711,388
-Diluted			24,621,490				18,711,388

Changes in internal controls

During the fourth quarter of 2010 we implemented certain improvements in our Company’s internal control over financial reporting. These improvements were in response to the conclusion by our Certifying Officers that, as of June 30 and September 30, 2010, there existed a material weakness in respect of our internal control over financial reporting, specifically in our control over the adoption of ASC 815-15, “Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity's Own Stock” which the FASB finalized in June 2008 and which became effective for fiscal years beginning after December 15, 2008. As in more detail in our Form 10-Q/A for June 30, 2010 and September 30, 2010, each of which was filed with the SEC on March 23, 2011, in response to comments raised by the SEC Staff, we determined that an error was contained in the initial filing of the reports on Form 10-Q as of and for the quarterly periods ended June 30 and September 30, 2010. Such error related to the accounting for certain warrants issued during April 2010 and July 2010 and our failure to properly apply the accounting principles set forth in ASC 815-15 with respect to such warrants. Based on the impact of the aforementioned accounting error, we determined to restate our consolidated financial statements as of June 30, 2010 and September 30, 2010. As a result of this material weakness, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, or that such information is accumulated and communicated to the Company’s management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

We believe we have remediated the material weakness identified above. Because the material weakness was related to a lack of sufficient technical accounting expertise and knowledge of accepted accounting principles in the United States of America (“U.S. GAAP”) that are relevant to the Company’s financial reporting requirements, we believe our addition of an employee within our accounting department has helped to remediate this material weakness. This employee, who has 14 years of accounting experience, was hired during 2010 and has been assigned the task (among others) of helping to establish and carry out internal audit procedures and assisting with certain other accounting and related finance matters. Since August 2010, we also have conducted several internal training sessions for various members of our accounting staff relating to various subjects including understanding and application of US GAAP and communication skills such as English-language report writing. We believe that the hiring of an additional accounting department employee will permit our senior financial management team, led by our CFO, to increase its focus on the implementation of new accounting pronouncements such as ASC 815-15, and on our compliance with U.S. GAAP generally, and enhance our ability to properly account and report on complex material or non-routine transactions. In addition, we believe our greater emphasis on the training of our internal accounting staff and our new internal audit procedures will also improve the effectiveness and reliability of our internal control over financial reporting.

Although the management of our Company, including the Chief Executive Officer and the Chief Financial Officer, believes that our disclosure controls and internal controls currently provide reasonable assurance that our desired control objectives have been met, management does not expect that our disclosure controls or internal controls will necessarily prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Positive developments in this company. If the cleansing in the US-listed China space is done, we are going to hear and see more from this company.

XINYINHAI TECHNOLOGY (XNYH) FY 2010 Results

10-K (FY 2010 results)

Earnings Per Share

$

0.048

Book Value Per Share $0.83

Cash Per Share            $0.189

Stock Price                  $0.09

If everything is for real you can buy this company for free!

Weikang Bio-Tech Resignation of some Management People

8-K

No disagreements..............but you never know why people resign. Corporate issues?

Artificial Life (ALIF) to Retain New Auditors, Reports on Current Business Activities

Artificial Life, Inc. announced that it is in the final stages of retaining new auditors to complete the audit of the Company's financial statements for the year ended December 31, 2010. This effort follows the dismissal of KPMG, the Company's previous auditors.

As previously announced, the Company's (ALIF) Independent Audit Committee dismissed KPMG on March 18, 2011 with notice effective March 30, 2011 to allow KPMG to complete the current audit. However, KPMG did not manage to complete the audit on or prior to the effective date of the termination.

"The Company and its independent Audit Committee are currently working through the process of selecting a new audit firm, and we hopefully will have a final selection within the next week or so," said Frank Namyslik, the Company's Chief Financial Officer. Mr. Namyslik was pleased with the efforts made thus far, and said, "We are nearing the end of our selection process and are satisfied with the quality and responsiveness of the candidates having presented to us." The Company will file its 2010 Form 10-K as soon as a new audit firm is selected and completes the audit.

In addition to the process of selecting a new audit firm, the Company continues to operate its business as usual.

The Company is continuing to expand and to explore further opportunities for growth with new and existing business partners. The Company has won new clients for its flagship m-commerce product OPUS-M in the first quarter of 2011 and, together with its joint venture partner M-Health Middle East Ltd., is also expanding its sales and business activities in certain emerging markets, specifically the Middle East and South Africa.

A Note to All Chinese CEOs: Knock it Off or Die! (PUDA, LLEN, CGA, CHNG, VICL)

Article by Kevin McElroy, Editor Resource Prospector

Some Interesting New Books Regarding China

Mao's Invisible Hand: The Political Foundations of Adaptive Governance in China (Harvard Contemporary China Series)



Rising China and Its Postmodern Fate: Memories of Empire in a New Global Context (Studies in Security and International Affairs)
 



Re-Made in the USA: How We Can Restore Jobs, Retool Manufacturing, and Compete With the World
 



The Dragon's Gift: The Real Story of China in Africa
 



Some of the books are in PRE-ORDER!

Sancon (SRRY) Enters Into a Preliminary Acquisition Agreement With Beijing Environmental Company

Sancon Resources Recovery, Inc., a growing waste logistics and recycling company with main operations located in China, announced today that it has entered into an acquisition agreement with a profitable Beijing environmental services company.

On March 25, 2011, Sancon signed a letter of intent with Beijing JDY Environmental Recycling Co., Ltd. (or "Beijing JDY"), under which Sancon's majority owned subsidiary Sancon Shanghai will acquire 51% equity of Beijing JDY. Sancon management believes this acquisition will contribute over US$15M revenue annually with healthy future growth projections.

Beijing JDY was established in 2005 in the Changping District of Beijing. It collects and processes scrap metal, waste paper, cardboards and plastics. Beijing JDY Services a population of 20 million within 16,800 square kilometers in the suburbs of Beijing. The company aims to expand its operations into additional areas of Beijing over the next three years. In 2009, under the government initiative to standardize and restructure the recycling operation across China, Beijing JDY became one of the only two recycling companies selected by the Beijing Municipal government to aggregate the fragmented recycling operations in the area. The initiative was part of the Chinese government's 11th 5-year plan to improve the industry image and urban environment in China.

The acquisition of BeijingJDY is expected to complete before the end of August 2011.

Guys how is this acquisition going to be financed? How much will it contribute to net profit? etc.

Crapshoot Investing Book Review

This week I completed the book Crapshoot Investing "How Tech-Savy Traders and Clueless Regulators Turned the Stock Market into a Casino"


 
Great book that gives you some inside in the flash crash and how we got there.

Despite the author mentions that the book was produced under a tight deadline I think he did a fantastic job to inform the public at large some important information.

Crapshoot Investing is the story of well-intentioned but disastrously wrong-headed decisions by Congress ad securities regulators in the destructions of investor's faith in fair markets.

The change in the investment landscape by High Frequently Traders (HFT) has turned the entire equity market in a gigantic derivative product with no underlying value. The same phenomenon that had brought down the markets in 2007.

HFT's look at historic price discrepancies and buy stock on that basis. They don't care what the name of the underlying company is or what its future growth is going to be. HFT merely tries to predict if a stock will go up or down over the next several minutes.

Personally I think that not only the machines (HFT) have lost touch with the market fundamentals. A lot of retail and professional investors are also playing the momentum game, which has of course nothing to do with investing.

The classic buy-and-hold strategy has been a big bust. The market has become a lighting fast roller coaster.

The market was supposed to be fair efficient, and friendly to long-term investors. It turned out that it wasn't any of these things. Because of the micro-managing of the SEC, the market has become unnecessarily complicated, disproportionately volatile, and less accountable then ever before.

The old system that had been dominated by market makers may have been imperfect, but it had worked fairly well for decades.

Heineken Should Target China, Not Latin America

Article Seeking Alpha

China Intelligent Lighting (CIL) Appoints New Auditors; Receives NYSE Amex Delisting Notice; Announces Special Litigation Committee's Engagement of Law Firm

8-K

China Intelligent Lighting and Electronics, Inc. yesterday announced that the Company engaged Friedman LLP ("Friedman") as its new independent registered public accounting firm. Pursuant to the engagement letter, Friedman will audit the financial statements for the years ended December 31, 2010 and 2009.

The Company also announced today that the Special Investigation Committee has engaged the law firm of Cozen O'Connor to serve as its independent counsel in connection with its investigation. As previously reported, the Board of Directors established a Special Investigation Committee to investigate allegations contained in the resignation letter of its former auditors, MaloneBailey LLP ("MaloneBailey").

On April 5, 2011, the Company received a notification from NYSE Amex LLC ("Amex") of its intention to delist the Company's common stock pursuant to Section 1009(d) of the Amex Company Guide based on a determination that it is necessary and appropriate for the protection of investors to initiate immediate delisting proceedings.

Based on Amex's review of the resignation letter from MaloneBailey, it determined that the Company is not in compliance with Amex listing standards and is therefore subject to immediate delisting.

Specifically, the Company is subject to delisting pursuant to Section 1003(f)(iii) in that the Company's actions and inactions led to MaloneBailey's resignation and withdrawal of its audit opinions casting material doubt on the integrity of the Company's financial statements, which were relied upon by Amex; MaloneBailey's withdrawal of its audit opinions and that its opinions may no longer be relied upon constitutes a material misstatement and a violation of Section 132(e); the withdrawal of MaloneBailey's audit opinions and that there are no current audited financial information available for the Company as a result have caused the Company's filings to be noncompliant with regulations of the SEC and, thus, noncompliant with Section 1003(d); MaloneBailey's withdrawal of its audit opinions calls into question whether the Company actually met the listing standards subjecting the Company to delisting pursuant to Section 1002(e); Amex states that, based on the withdrawal of MaloneBailey's opinions, the Company is not compliant with Section 127; the resignation of Mr. Askew as a member and Chairman of the Company's Audit Committee leaves the Audit Committee with less than the required three independent directors and therefore, violates Section 803B(2);

Mr. Askew's resignation also resulted in the Company having less than majority of independent directors, which violates Section 802(a); and the filed Form 12b-25 indicates that the Company will not be able to file its Form 10-K for the year ended December 31, 2010 within the extended due date and the Company is unable to estimate when it will be able to complete the filing, which violates Sections 134 and 1101 requiring timely filing of such report.

The Company has until April 12, 2011 a limited right to request an appeal. If the Company does not request an appeal by then, then the decision will become final and Amex will submit an application to the SEC to strike the Company's common stock from listing. If the Company requests an appeal, then such request will stay a delisting action.

The Company intends to appeal the delisting determination. There can be no assurance that the Company's request for continued listing will be granted, or even if it is granted, the Company will be able to execute upon such request in a timely manner or to the satisfaction of Amex. The details of the Amex delisting notice is set forth in Item 3.01 of the Company's Current Report on Form 8-K filed with the SEC on April 7, 2011.

L.A. Firm's China Ventures Turn Sour (Pt. 1)

Article TheStreet

This is the first of a two-part series on Westpark Capital, accounting firm MaloneBailey and recent allegations of improper accounting at a handful of Chinese companies, part 2 can be read at the end of part 1.

China ETFs Are a Great Alternative to U.S. Listed China Stocks

Article Seeking Alpha

Great new books about ETF's with good reviews from Amazon.

Artificial Life (ALIF) Red Flags Accounting

Today's news is not good for the company.

Transition report cannot be filed within the prescribed time period

KPMG resigns

On March 18, 2011, the audit committee of Artificial Life, Inc. (the “Company”) approved the dismissal of KPMG as the Company’s principal accountant effective March 30, 2011.

KPMG has not issued a report on the financial statements of the Company in either of the two most recent fiscal years.

KPMG was engaged by the Company on April 13, 2010. During the Company’s fiscal year ended December 31, 2010, and the subsequent interim period through the date of KPMG’s dismissal, there were no disagreements between the Company and KPMG on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused KPMG to make reference to the subject matter of the disagreement in its report on the Company’s consolidated financial statements, and there were no reportable events as that term is described in Item 304(a)(1)(v) of Regulation S-K, except as set out below.

During the course of the audit of the Company’s financial statements for the fiscal year ended December 31, 2010, KPMG identified a number of accounting matters that would have prevented KPMG from rendering an unqualified opinion if the issues were not resolved. After KPMG notified the Company of such matters, the Company provided KPMG with various detailed assessments. In late March 2011, there were discussions between the Company, its audit committee and KPMG in connection with these matters, which principally related to: accounting for a Joint Venture agreement, reserves for accounts receivables, revenue recognition and impairment of license rights related to its 2010 fiscal year. These issues remained unresolved at the end of KPMG’s engagement.

The Company has provided KPMG with a copy of the foregoing statements and has requested that KPMG promptly furnish it with a letter addressed to the Securities and Exchange Commission stating that KPMG agrees with the Company’s statements in this Item 401(a). A copy of KPMG’s letter stating its agreement with such statements is attached as Exhibit 16.1. The Company has authorized KPMG to respond to inquiries of the successor accountant concerning the matters set forth above.

Artificial Life (ALIF) is securitizing their receivables. Selling receivables enables the firm to collect cash sooner, but the firm collects less cash because they are sold at a discount. Clearly a RED FLAG. The Next Fraud?

Asian Development Outlook 2011

Asian Development Outlook 2011

Publication Date: April 2011

The annual Asian Development Outlook provides a comprehensive analysis of economic performance for the past year and offers forecasts for the next 2 years for the 45 Asian economies that make up developing Asia.


The Asian Development Outlook 2011 emphasizes two important challenges that developing Asia must resolve to sustain the inclusive growth that is needed to eliminate poverty in the region. The immediate problem is tackling rising consumer price pressures. Inflation's insidious effects call for preemptive action to contain it before it begins to accelerate. The poor are the most vulnerable, particularly from rising food prices.

China's GDP to grow 9.6% in 2011: ADB

China's economy is expected to grow 9.6 percent in 2011 as fixed asset investment remains a key driver, the Asian Development Bank (ADB) said in an annual report released on Wednesday.

With inflation pressures building and tightened monetary policy, China's GDP growth was forecast to moderate this year, compared with a growth of 10.3 percent in 2010, said the ADB in its 2011 Asian Development Outlook, which expected a growth of 9.2 percent in China in 2012.

The inflation rate, which averaged 3.3 percent in 2010, will pick up to 4.6 percent in 2011, lifted by abundant liquidity and higher food and commodities prices, the ADB said. The bank estimated the inflation will ease back to 4.2 percent in 2012 as commodity prices level off.

Fixed asset investment will remain a key driver of growth, although the expansion rate is set to decelerate slightly from past levels, standing at 22 percent in 2011 and 20 percent in 2012 respectively, due to the winding back of fiscal stimulus measures and tighter monetary policy, the bank said.

With the slowdown in major industrial economies, Chinese government has laid out measures to rebalance economic growth drivers in its 12th Five-Year Plan (2011-2015) by putting more emphasis on domestic consumption and services, the bank said.

"Global imbalances have become more pronounced, and the recent global recession highlighted the risk of heavy reliance on foreign demand for growth," said Changyong Rhee, the ADB's chief economist in a statement released in the day.

The Manila-based bank expected the private consumption in China will expand by 12.6 percent this year with rising incomes and increased spending on education, health care and pensions, while merchandise export growth will ease to about 20 percent.

The ADB projected a 1.5 percent GDP growth in 2011 in disaster- hit Japan. "Aside from energy, the regional and global impact of the Japanese earthquake is hard to quantify but likely to be temporary and limited," the bank said.

In light of projected slower global trade and moderating growth in Chinese mainland, Hong Kong's economy has been forecast to expand 5 percent in 2011, easing to 4.7 percent in 2012, as inflation rate is seen to reach 4.5 percent due to higher global fuel and food prices, rising housing costs, and a likely increase in wages.

The bank's forecast growth for Developing Asia, comprising of 45 economies in the region including China, India, Indonesia, Kazakhstan and pacific island countries, has been at 7.8 percent in 2011, with an inflation rate of 5.3 percent.

"Developing Asia is home to two-thirds of the world's poor and it is they who are most vulnerable to the effects of price increases," said Rhee. "Policy makers must therefore consider preemptive action to control inflation before it accelerates."

The ADB forecast a moderate expansion of 5.5 percent in Southeast Asia in 2011 after "an exceptionally strong recovery in 2010," with an accelerating inflation of 5.1 percent.

Though facing slower external demand and tighter fiscal and monetary policies, India's economy will remain robust, with its GDP growth slightly slower at 8.2 percent in 2011 and expected to bounce back to 8.8 percent in 2012, the bank said.

Artificial Life (ALIF) Reaches 58 Million Mobile Apps and Games Downloads

Artificial Life, Inc., today revealed its current title sales, download numbers, and key ranking statistics for smart phone and feature phone apps.

As of March 31, 2010, Artificial Life (ALIF)'s accumulated number of downloads now exceeds 58 million. This number includes downloads from iPhone/iPod touch and iPad, Android, Windows Phone 7, and Java title sales.

Artificial Life has produced and released 36 applications for iPhone, iPod touch and iPad. The top title has been downloaded over 7.45 million times, with the second and third most popular titles receiving 3.63 million and 3.61 million downloads each. On average, each game developed by Artificial Life has received over 766,000 downloads.

Paid iPhone games were sold for between USD 0.99 and USD 4.99 with an average price per game of USD 1.43. All new games released have achieved Top 100 or higher download rankings in their categories.

Artificial Life's games have reached the #1 spot on the Apple App Store Top Charts in over 74 countries or 83% of all the offered countries and have gained frequent mentions in specialized App Store sections such as "New and Noteworthy" and "What We're Playing".

The Company continues to gain favorable results from penetrating the ever-growing iPad market. For instance, since the launch of the Linkin Park 8-Bit Rebellion! iPad Edition in April 2010, the game has firmly remained in the US Top 20 of the Paid Music App chart and has placed as a Top 10 paid iPad app in many countries around the world including Australia, Russia, Denmark, Germany and Finland, among others. The Company's iPad games have also remained in the Top 50 overall paid app charts many months after their initial releases. The highly popular iPhone games Amateur Surgeon, Red Bull Racing Challenge, and iSink U have all been ported onto the iPad platform with enhanced features and gameplay. GluCoMo™, Artificial Life's healthcare iPhone application for monitoring and coaching diabetes patients, has been well received by iPad users and is enjoying positive results with the achievement of being in the US Top 50 Healthcare & Fitness Apps.

Among the 36 produced iPhone titles, 26 are based on licensed and branded intellectual property from a variety of licensors while 10 titles are based on Artificial Life's proprietary IP. The games have been sold in a total of 90 countries worldwide. The distribution of game downloads by region is: 43% in North America, 34% in Europe and Africa, 18% in Asia Pacific, 3% in Latin America and 2% in the Middle East. The Top 5 countries in terms of download numbers are: United States, United Kingdom, France, Germany, and Canada (with 39%, 10%, 5%, 5% and 4% of downloads respectively).

Currently, Artificial Life offers 18 applications free to play, 2 games with in-app purchase and 3 applications with in-app advertisements.

"By reaching the nearly 60 million download milestone, 2011 has started off strongly for Artificial Life, and we will build on the momentum generated in Q1. Our creative team has many more ideas and concepts for the remainder of the year and is working diligently to deliver even more high quality, innovative games and apps to our customers," said Eberhard Schoneburg, CEO of Artificial Life, Inc.

Asia Pacific region is still growing from 17% Q4 to 18% Q1. Average price per game decreased from $2.27 Q4 to $1.43. Hot new products we need based on augmented reality!

Man Shing Agricultural Holdings (MSAH) Increases Production Capacity 45% by Leasing an Additional 2.4 Million Square Meters of Farmland

Man Shing Agricultural Holdings, Inc. (MSAH), located in the Shandong Province and one of the largest Chinese exporters of fresh ginger to Japan, the United Kingdom, and the Netherlands, today announced that it has leased an additional 2.4 million square meters, or 3,620 Mu of farmland, increasing total farmland by approximately 45% to 7.7 million square meters.

The newly leased farmland is located in close proximity to the 5.3 million square meters of land currently leased by the Company in Anqiu, Shandong Province. This lease furthers the Company's growth strategy. The annual cost for the new lease of 2.4 million square meters of farmland is approximately $530,000. Planting on the new 2.4 million square meters and existing 5.3 million square meters of farmland will begin in April 2011, followed by harvesting in October 2011.

Mr. Shili Liu, Chairman and CEO of Man Shing, stated, "Today's announcement marks a significant milestone in the history of Man Shing as we have increased total farmland by 45% to 7.7 million square meters of farmland. This production increase bodes very well for our future financial performance, if demand continues to grow for our product and the favorable pricing trend for fresh, high quality ginger continues, as we believe that they will. The significance of finalizing the lease for land in close proximity to existing operations also enables us to ensure that the planting, harvesting, and implementation of quality standards can be done without additional costs beyond the general farming expenses stated."

Mr. Shili Liu, continued, "We have also worked closely with the PRC government and the farmland workers of Anqiu. Due to our reputation as one of the market leaders in the production of fresh ginger, Man Shing has gained the trust and respect from both parties allowing us the opportunity to lease more land. Demand for our products remains at an all time high. Due to the timing of this agreement, we can now prepare to plant on the new and existing land as originally scheduled in mid April of this year."

After management evaluates the financial impact of the new farmland and fiscal 2011 results are reported, financial guidance for the fiscal year ending June 30, 2012 will be given.

DESPITE ALL THE MESS IN THE CHINA RTO SPACE I STILL BELIEVE THIS IS A ONE BUCK STOCK.

POSITION: LONG

2nd UPDATE: SEC's Aguilar Sounds Alarm On Backdoor Mergers

Source

The U.S. Securities and Exchange Commission is investigating the "disturbing trend" of Chinese and other companies registered through backdoor mergers with dormant shell companies, an SEC commissioner said Monday, confirming recent reports about the inquiry.

In prepared remarks at an investors conference, Luis Aguilar said the inquiry comes amid increasing concerns about the proliferation of small private companies that elect to merge with public shell companies in lieu of more rigorous methods of becoming public, such as a traditional initial public offering.

"While the vast majority of these companies may be legitimate businesses, a growing number of them have accounting deficiencies or are outright vessels of fraud," Aguilar said at a Council of Institutional Investors conference here.

Since January 2007, there have been 600 backdoor registrations, with more than 150 from in and around China, Aguilar said.

Aguilar noted that two companies, the jewelry manufacturer Fuqi International and the equipment maker RINO International, were once highly ranked by Investors Business Daily as top investments. But Fuqi had to restate its earnings and was delisted last week while RINO admitted that at least two of its manufacturing contracts didn't exist, Aguilar said.

He also noted that the SEC on Friday suspended trading in another Chinese company, China Changjiang Mining & New Energy Co., that became public in the U.S. through a Nevada-based shell.

In addition, Nasdaq and the American Stock Exchange have recently suspending trading in a number of these companies, he said. The SEC's enforcement and corporation-finance divisions have established a task force to conduct a wide- scale investigation into how networks of U.S. accountants, lawyers and bankers have helped bring scores of Chinese companies onto the U.S. stock markets, people familiar with the situation have said.

Aguilar acknowledged the task force in his remarks, saying it has already produced results and would continue to do so. The use of backdoor mergers by Chinese companies has raised at least two issues, Aguilar said.

First, he noted that there appears to be "systematic concerns" with the quality of the auditing of the firm's financial reporting. Citing a study by the Public Company Accounting Oversight Board, Aguilar said many U.S. accounting firms appeared to signing off on accounting opinions based solely on work performed by Chinese audit companies, without independent work to ensure the Chinese information is reliable.

Secondly, even though these foreign companies are registered in the U.S., Aguilar warned there are limitations on the ability of regulators to enforce the securities laws and for investors to recover losses tied to fraudulent disclosures.

PCAOB Chairman James Doty, who also spoke at the conference, said there are " significant risks" associated with audits of operations of U.S. companies in China, which fail to adhere to "even simple audit maxims."

"If Chinese companies want to attract U.S. capital for the long term, and if Chinese auditors want to garner the respect of investors, they need the credibility that comes from being part of a joint inspection process that includes the U.S. and other similarly constituted regulatory regimes," Doty said. "In light of these risks, the PCAOB's inability to inspect the work of registered firms from China is a gaping hole in investor protection."

Concerns about backdoor IPOs come as lawmakers worry it is increasingly difficult for small businesses to raise capital.

A bill introduced last month by Rep. David Schweikert (R., Ariz.) aims to assist small businesses in raising money by authorizing the SEC to increase an existing exemption for small securities transactions that can be offered to the public with simpler filings and without audited financial statements.

The cap would be raised to deals of up to $50 million, from $5 million.

"Many companies, especially those in the high-tech sector, require more capital upfront to make their ventures successful," Schweikert said in a statement. "At a time when so many small businesses are in need of capital, this is a commonsense proposal that will make our capital markets more vibrant and competitive."

But opponents warn the measure would only encourage securities fraud. At a hearing on the bill last week, Damon Silvers, policy director and special counsel to the AFL-CIO, quipped that the bill ought to be called "The Promote Penny Stock Fraud Act."

-By Andrew Ackerman, Dow Jones Newswires; 202-569-8390; andrew.ackerman@ dowjones.com

(END) Dow Jones Newswires

04-04-111530ET

Copyright (c) 2011 Dow Jones & Company, Inc.

Fraud Examination Books

Why lately a lot of new fraud examination books are published?

These two books I would suggest for audit firms or investors who are interested in doing their own fraud research.









FRAUD INVESTIGATION FOR AUDIT FIRMS, INVESTIGATIVE REPORTERS, INVESTIGATIVE OFFICES, COMPLIANCE OFFICERS, ETC.

Hit piece Citron Research on Deer Consumer Products (DEER)

China RTO War is going on!

Hit piece Citron Research on Deer Consumer Products (DEER)

Conference Call Script Lotus Pharmaceuticals (LTUS)

Interesting and some good background information!
Conference Call Script Lotus Pharmaceuticals

In my opinion it could be a trade.........................buying under 1 buck.

Hit Piece Muddy Waters on Duoyuan Global Water Inc. (DGW)

Muddy Waters released today their 21-page Research Report concerning Duoyuan Global Water (DGW).

Highlights:

We estimate DGW’s actual revenue is no greater than US$800,000 annually, versus the US$154.4 million it
claims. Our estimate is based on DGW’s PRC audit report, which is highly reliable.

Muddy Waters caught DGW red handed forging its PRC audit report. DGW’s actions validate the audit report’s significance.

Our extensive surveillance of DGW’s factory confirms our revenue estimates.

We identified four errors in DGW’s US audit, which indicates the auditor was sloppy.

DGW has much in common with its troubled sister company, DYP. We believe these commonalities further
DGW’s fraud.

DGW engages in improper undisclosed related party transactions that transfer money to its chairman.

Nearly half of China's dairy firms fail to get new licenses

China Daily

Nearly half of China's existing 1,176 dairy producers have failed to obtain new production licenses amid the government's efforts to shore up the scandal-tainted milk industry, China's top quality supervisor said Saturday.

Only 643 dairy producing companies, or about 55 percent of the country's total 1,176 milk enterprises, were granted licenses to continue production by the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), Li Yuanping, a spokesman for AQSIQ, told Xinhua News Agency.

Li said quality supervision departments are canceling the production licenses of 553 dairy companies and have ordered the companies to halt production immediately.

Quality supervision government departments must strengthen their law enforcement activities to crack down on unlicensed production, he said.

Meanwhile, the AQSIQ demanded subordinate quality supervision government departments to strengthen supervision over those qualified dairy makers to guarantee the safety of their products.

China's dairy industry was severely harmed after a melamine-tainted baby formula scandal in 2008 undermined Chinese consumers' confidence in domestic brands.

In its annual working food safety campaign plan, the Chinese government ordered the establishment of a unified national database of dairy product manufacturers and a system to verify relevant certificates.

The plan requires the establishment of a registration system to record all purchases of melamine, a prohibited food additive that killed at least six infants and sickened 300,000 children across the country since 2008.

Positive news for Rodobo International (RDBO) which received their new production license on March 15.

Crapshoot Investing - Interesting Stuff and a Real Bestseller

I am reading Crapshoot Investing right now, so in one week you can read a book review at Seeking Alpha.

Equity markets are now high-speed casinos rigged against individual investors. Now, Barron’s Washington Editor Jim McTague reveals the twin causes: high-frequency traders and blundering regulators. Learn why the Flash Crash happened (and will again)… discover titanic, uncontrolled forces driving market chaos… find rational strategies for profiting in this terrifying new environment!

Sino Gas International Holdings (SGAS) FY 2010 Results

This company could be an interesting play for the coming years.

Outlook


Mr. Yu-Chuan Liu, Chairman and CEO of Sino Gas said, "Our improved operating results are indicative of the continuing strong demand for natural gas in China with the Government's support, rapid urbanization, clean energy promotion and rise in income levels. We will continue to focus on our existing projects in small and medium-sized cities in China, and pursue new business opportunities."

10-K

Sino Gas International Holdings, Inc. (SGAS), through its indirectly wholly-owned subsidiary, Beijing Zhong Ran Wei Ye Gas Co., Ltd. ("Beijing Gas"), and the subsidiaries of Beijing Gas, is a leading developer of natural gas distribution systems in small and medium size cities in China, as well as a distributor of natural gas to residential, commercial and industrial customers in China. The company owns and operates natural gas distribution systems in 35 small and medium size cities and serves approximately 183,500 residential and seven industrial customers. Facilities include approximately 1,525 kilometers of pipeline and delivery networks with a daily capacity of approximately 120,000 cubic meters of natural gas. The Company owns and operates natural gas distribution systems in Beijing, Hebei, Jilin, Jiangsu, Anhui and Yunnan Provinces.

The company's website is: http://www.sino-gas.com/

Fourth Quarter 2010 Financial Highlights YOY


· Total revenue increased 36.07% to $11.2 million
· Connection Fees Revenues Increased 16.73% to $5.13 Million
· Gas Sales Increased 58.18% to 6.07 Million
· Gross Profit Increased 23.11% to $5.16 Million
· Operating Income Increased 49.8% to $3.59 Million


Full Year of 2010 Financial Highlights YOY

· Total revenue increased 16.61% to $32.17 million
· Connection Fees Revenues Increased 13.02% to $13.44 Million
· Gas Sales Increased 19.33% to 18.73 Million
· Gross Profit Increased 30.50% to $12.36 Million
· Operating Income Increased 43.83% to $7.29 Million
· Earnings Per Share Diluted $0.15

China Agri-Business (CHBU) FY 2010 Results

10-K

Comparison of Net Income for the Years Ended December 31, 2010 and 2009


2010
Gross Profit $ 5,455,210
Income from operations 3,717,468
Net Income $ 3,580,790
EPS $ 0.28

Great results and one of the stocks that seems to do everything right.

SkyPeople Fruit Juice (SPU) FY 2010 Results

Press Release

10-K

Fourth Quarter 2010 Highlights


A record with revenue of $43.9 million, up 22.6% from 4Q 2009

Apple concentrates and Hedetang fruit beverages increased 359% and 417%, respectively

Net income was $11.2 million, up 9.8% year-over-year, also a record

Diluted EPS showed a decrease to $0.47 for 4Q 2010 based on 23.1 million shares versus $0.56 per share in 4Q 2009 based on 18.6 million shares

"The fourth quarter is traditionally our strongest and was an appropriate ending to a successful year in which we demonstrated the significant growth in both apple concentrates and our branded Hedetang fruit beverages," started Yonkue Xue, Chief Executive Officer of SkyPeople Fruit Juice. "Due to seasonality, we normally witness kiwifruit concentrates and fresh fruits as the dominant contributor to revenues in the quarter. This year, however, we witnessed triple digit growth from our apple concentrates and production. I am especially proud of the 4 fold increase in fruit beverage sales, which was driven by a broader distribution footprint, the addition of new retail locations, and reorders from existing customers. Our Hedetang-branded beverages are currently sold through over 84 distributors and over 100 retail stores in approximately 17 cities. As the market continues to embrace these unique flavors, we are pursuing a significant growth opportunity in this segment and commercialized a new fruit juice line, Qian Mei Duo in January 2011 to target one of the fastest growing markets in China, the active, health-conscious female 18-29 years old."

Twelve months Results


For the Year Ended December 31, 2010

                                               FY 2010             FY 2009             CHANGE

Net Sales                                $93.2 million        $59.2 million       +57.4%

Gross Profit                             $38.0 million        $25.4 million       +49.6%

Net Income                             $21.2 million        $15.2 million       +39.5%

EPS (Diluted)                          $0.92                   $0.85                 +9.5%

Adjusted Net Income*            $23.3 million        $15.8 million       +53.3%

Adjusted EPS (Diluted)*         $1.01                  $0.84                  +20.2%

This company is going to profit from the rise in disposable income and healthy life style in China.

CC transcript

American Lorain (ALN) FY 2010 Results

10-K

Q4 2010 Financial Highlights


Total revenues of $82.3 million, an increase of 30.8% year over year

Gross margin improved to 22.7% from 20.9% year-over-year

Net income attributable to common stockholders of $8.2 million, up 30.4% year-over-year

Diluted earnings per share of $0.24 compared to $0.23 in the prior year period


Full-year 2010 Financial Highlights

Total revenues of $184.2 million, an increase of 25.5% from the prior year

Gross margin improved to 22.7% from 22.3% in the prior year

Net income attributable to common stockholders was $17.8 million, an increase of 23.8% year-over-year

Diluted earnings per share of $0.55 compared to $0.55 in the prior year

Generated $24.4 million in cash from operations

Company achieved 2010 guidance of $182.0 to $190.0 million in revenues and $17.8 million to $19.0 million in net income

Book value per share of $3.76

American Lorain's Chairman and CEO, Mr. Si Chen, stated, "We are very pleased with our growth during the quarter and year ended December 31, 2010. We have continued to benefit from our existing long-term supplier and customer relationships, and are gaining significant traction in consumer acceptance of our convenience food products. Despite the various uncertainties weighing on the global economic environment, we have remained growing and profitable. American Lorain maintains a growing and diverse network of customers throughout 26 provinces in China and 42 countries around the world. We continued to expand our brand name throughout China, and improved sales domestically by 30.5% during 2010. In 2010, 73.3% of the Company's sales were generated domestically through our network of distribution channels and relations. We also improved our sales internationally by 13.6% primarily supported by growth in the Asia-pacific region. Our financial position is strong with approximately $57.4 million in working capital and a continued record of generating free cash flow while still regularly investing in our business."

Excellent company with a great future.

Sancon Resources Recovery (SRRY) FY 2010 results

10-K FY 2010 results

Diluted EPS FY 2010 $0.08 vs FY 2009 $0.09.

It looks like a fading business model.

Guanxi: Business Weakness for US-listed China stocks

In a society based on collectivism, being a member of a close and committed group is vital. Since the Chinese approach relationships with the belief they will develop over time, and admire respect, loyalty, and trust, there is no such thing as a purely business relationship. Building mutually beneficial relationships is the core of Chinese business.

The Chinese prefer to work with those they trust and have personal relationships with. Guanxi is the Chinese term for relationships. Guanxi, in the corporate world, is a network of relationships that support one another. To build Guanxi, it is expected that you treat others with decency, and be a trustworthy and dependable person.

Guanxi is also a sense of mutual obligation and reciprocity. People with Guanxi will do favors for members in their network, such as, acting on another’s behalf and doing whatever is necessary for the other party. When a favor is complete, reciprocity is expected. It doesn’t have to be in like kind, but an effort must be made. If you are unable to meet your obligation, you must find another way to fulfill a favor or request.

Guanxi is also used to ensure mutual obligations are met. Meeting obligations through Guanxi is especially important in China because contracts are not reliably enforced. .

Investors in US-listed China stocks are now facing problems because we don’t understand Guanxi. The trading halts of China Intelligent Lighting (CIL) and NIVS IntelliMedia Technology (NIV) are recent examples of how things can go wrong.

Most of us don’t have Guanxi because we do not know anyone. Since foreign investors’ do not know anyone in the Guanxi network, investments often turn sour because the red flags regarding the trustworthiness of management are not received. If we had been in the Guanxi network, we would have known otherwise.

Investors can become targets to those with dishonest intentions. According to some experts many Chinese RTO and IPO transactions in the U.S. are ego-driven and undertaken only to build the resume of local country management.

I wrote some positive articles about China Intelligent Lighting (CIL) and NIVS IntelliMedia Technology (NIV), because I really thought those were legitimate companies.

The main problem with NIV and CIL is too much Guanxi: they share the same facilities, same auditor, and there are many connections within senior management (founders, directors).

Another article I would recommend about this debacle is called WestPark Capital's RTO Deals on Trading China

China Telecom Attractive on Broadband Expansion Plans

Article Seeking Alpha

China Intelligent Lighting Announces Termination of Engagement with Auditor; Auditor Withdrawal of Audit Opinion; Resignation of Audit Committee Chair; NYSE Amex Request for Information; Notice of SEC Investigation; and Formation of Special Investigation Committee

Press release

Of course there is something seriously wrong with the company.

'Red Capitalism' Review: Evaluating China's Financial Foundation and Extraordinary Rise

Article Seeking Alpha



The Chinese economic growth in the last decade has been the envy of the world. There has not been a serious challenge to the economic power of the United States since the 1980’s, when Japan’s economic strength was at its apex. China, since then has taken over Japan in 2011 as the world’s second largest economy and now widely noted to pose a serious challenge to the United State to be the world’s largest economy. While to some, China’s economic super power status is a foregone conclusion. Carl Walter and Fraser Howie examine the intricate mechanics beneath the façade and enlighten the intricate a web of political and financial entanglements that exists between the Communist Part of China (CPC) and the financial institutions that forms the economies foundation.

Carl Walter and Fraser Howie have extensive knowledge of the Chinese economy based on their long professional experience working in the middle kingdom. This is seen throughout the book as it is littered with facts on the history of the financial reforms, beginning with Zhu Rongji in the 1908s to the current personalities that lead the giant state owned financial behemoths. The view they show is that of a façade that was made to impress and imprint the view to outsiders, that China is an unstoppable force in the 21st Century.

Underneath the cover, the authors shows the flaws of the institutions which serve as the pillars of the system. From the lack of supervision and capital cushion in the major state banks which are crucial to the wider economy, to their conflicting governance goal of sustain the will of the CPC rather than its shareholders.

They also present a view of the stock market which replicates the Wild West of America in the 1900s where transparency and accountability is at best minimal. In addition to the stock market, the authors examine the stalling of reforms in central bank interest rate mechanism, exchange liberalization, and buildup of restrictions on foreign investment. The very lifeblood of what made China great today.

While economic liberalization since the 1990s and China’s entry to the WTO in 2001 has enabled its economy to growth at a phenomenal rate. Financial liberalization has been stalling and in some instances reverting to the planned economic philosophies of the 1960 and 1970s. The issue with policy stagflation under a fragile financial system is it could be a hidden risk that will eventually pose a systematic risk to the whole economy. One could argue that financial liberalization is an important area to be examined as the author shows, the current financial regime is simply infantile. The over reliance on the large state banks for funding, which themselves are thinly capitalized could be a liability under crises conditions.

Under an unforeseeable crisis, the opaqueness of the institution and its relationship with each other and the government would result in similar issue during the height of the GFC, where no one knows their true exposure to Lehman Brothers. The system would simply freeze. This is more acute in the Chinese system as the OTC bond market is in its infancy and a significant proportion of state company funding is delivered by the banks itself. If anything happen to these thinly capitalized banks, it would pose a sever risk to the wider economy.

Red Capitalism contains numerous stories of internal political maneuvering within the CPC for power. While the book is well researched and detailed explanation of the largest financial institutions and their relationships with each other. Beginner readers without background could have difficulty in track of the development of the financial system into the present form. But the complexity would also confuse market professionals as the picture is bordering to the detail and complexity of CDO’s. Except in this instance, the mind numbing complexity prevails throughout the whole system.

From reading the book, the reader forms an idea that there are essentially two economics in China, one is the private and the other the state owned institutions in which the CPC controls. The CPC uses all the tools it has over the private sector to ensure that its own monopolies in banking, telecommunications and transport will not be encroached by the private sector. This notion is similar to the viewpoint forwarded by Ian Bremmer in ‘The End of the Free Market'. The primary difference between the two economies is that one controls the arteries of the economic systems while the other is at its mercy. The reader’s final impression is that the strength in the goliath is more vulnerable than you realise.

Lotus Pharmaceuticals (LTUS) Announces Fiscal 2010 Financial Results

FY 2010 results

Fiscal Year 2010 Financial Highlights

Revenues for the 2010 fiscal year increased by 28.7% year-over-year to $72.7 million, up from $56.5 million in 2009.

-- Wholesale revenue was $51.4 million, or 70.7% of total revenues.-- Retail revenues were $21.3 million, or 29.3% of total revenues.

Gross profit for the year was $39.8 million, an increase of 26.6% compared to $31.4 million in 2009. Gross margin was 54.7% and 55.6% in 2010 and 2009, respectively.

Adjusted* net income increased 16.7% to $21.2 million, compared to $18.2 million in 2009

GAAP net income decreased 12.2% year-over-year to $14.4 million, compared to $16.4 million in the previous year

Earnings per diluted share were $0.54 for the year, compared with diluted EPS of $0.66 achieved in the previous year

*2010 net income adjusted for one-time impairment loss of $6.8 million ($0.25 on a diluted EPS basis) on construction in progress in Inner Mongolia. 2009 net income adjusted for one-time property and equipment impairment loss of $1.7 million ($0.07 on a diluted EPS basis) to recognize the removal of a portion of a Beijing En Ze Jia Shi building in order to construct the new Beijing facility.

Mr. Zhongyi Liu, Chairman and CEO of Lotus, stated, "We continued to expand our business in 2010 and saw especially strong growth of 83% in our retail sales segment. We entered the market for direct sales to over-the-counter drugstores in Beijing in 2010 and have already experienced tremendous success, serving more than 1,000 OTC drugstores in addition to our own 10 stores. We expect this channel to continue being a major sales growth driver in the coming year. Construction of our Beijing facility continues to progress, and we anticipate significant efficiency improvements and additional capacity for growth once we move into the new building."

Mr. Liu continued, "We plan to focus our capital expenditures in the foreseeable future on the completion of our Beijing facility and our core business in Beijing; as a result, we recognized a one-time, non-cash impairment loss for construction expenditures on our property in Inner Mongolia in 2010. Lotus has a well-established nationwide sales and distribution network, strong product development capabilities, and access to capital. Due to the trends of consolidation and increasing regulatory oversight in China's pharmaceuticals industry, we believe these characteristics position Lotus to emerge as an industry leader."

Business Outlook for 2011

Management anticipates that 2011 will be a transitional year for Lotus Pharmaceuticals, as the Company will be completing and moving into its new headquarters and shifting its focus to the wholesale business in Beijing and the surrounding areas. After the completion of the headquarters, the Company expects strong growth driven by the wholesale business in Beijing and surrounding areas starting in 2012.

The Company expects total revenue and profitability to be flat or slightly down in fiscal 2011 compared to 2010. Specifically, management anticipates continued growth in Lotus' retail business in 2011, driven primarily by strong growth in the OTC sales division. However, revenue from the wholesale business is expected to decrease in 2011, as the Company will lose revenue from one of its self-branded products, Muxin (an eye drop), due to the termination of its outsourcing agreement and inability to stock the product. In addition, the Company will undertake a strategic shift as management prepares to enter the wholesale market in Beijing.

NIVS IntelliMedia Technology Group Reports Former Auditor's Non-reliance Letter and Starts Independent Investigation

Press release

At least something positive at the end of the tunnel.

China Intelligent Lighting (CIL) and NIVS IntelliMedia Technology (NIV) crooks?

The response of Rodman & Renshaw on NIV/CIL drama:

Trading was halted on China Intelligent Lighting (CIL) on Thursday. It is our belief that the SEC has opened a formal investigation. We believe the basis of this inquiry rests on the Company not providing adequate supporting documentation for its bank transactions to its auditors Malone Bailey LLP. The bank transactions were related to Company's operational accounts, accounts receivable, payables and bank deposits, etc. We are revising our rating on CIL from Market Outperform to Under Review. We are removing our financial projections pending resolution of the outstanding issues.

Related Party Transactions: We also note that there is also a trading halt on NIVS IntelliMedia Technology Group Inc (NIV, Market Outperform) which is controlled by CIL's Chairman and CEO Li Xuemei. We note that CIL has a facility leasing arrangement with NIV's controlling subsidiary, NIVS (HZ) Audio & Video Tech Co. Ltd.

Also Malone Bailey LLP independent auditor submitted its resignation

UNBELIEVABLE WHAT'S HAPPENING, EVEN COMPANIES YOU THOUGHT TO BE LEGIT ARE RUNNING THEIR BUSINESSES LIKE CROOKS.

I think we all have to read the book below

It is just amazing what's happening right now in the China space, this book is required to prepare yourself better for fraud and other financial gimmicks.

China Intelligent Lighting (CIL) and NIVS IntelliMedia Technology (NIV) trading halts

A Shotgun Wedding?
http://www.nyse.com/press/1300963610692.html

http://www.nyse.com/press/1300963610893.html

CRAP..............What's going on?

Maybe it had to do something with their 8-K

Conflict of interest???????
Form 8-K for CHINA INTELLIGENT LIGHTING & ELECTRONICS, INC.


-------------------------------------------------------------------------------
4-Mar-2011
Change in Directors or Principal Officers

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

On March 1, 2011, Su Yang resigned as a director of China Intelligent Lighting and Electronics, Inc. (the "Company"), including Su Yang's positions on the Company's Audit Committee, Compensation Committee and Nominating Committee, effective immediately. Su Yang's resignation was for personal reasons and was not due to any disagreement with the Company. On March 1, 2011, the Company's board of directors (the "Board") appointed Ruxiang Niu to serve as an independent director of the Company. The Board determined that Ruxiang Niu is independent in accordance with the applicable rules of the NYSE Amex LLC. The Board also appointed Ruxiang Niu as a member of the Company's Audit Committee, as Chair to the Company's Compensation Committee and as a member of the Company's Nominating Committee.

Ruxiang Niu, age 48, served as a director of NIVS IntelliMedia Technology Group, Inc. from December 2008 to April 2010. From January 2007 to October 2008, Mr. Niu served as the Vice General Manager of Shanghai Pudong Real Estate Trust Investment Company Limited, a real estate investment company, and was responsible for real estate investments. From December 2005 to December 2006, Mr. Niu served as the Chief Executive Officer of Beijing Bangsheng Investment Company Limited, a financial investment company, and was responsible for investments, mergers and acquisitions and company financing, and also served as the Chief Capital Consultant of Shirong (Shenzhen) International Financial Group, a financial investment company, and was responsible for investments, mergers and acquisitions and company financing. From March 2003 to Novemb er 2005, Mr. Niu served as the Chief Executive Officer of Beijing Dovon Net Company Limited, a financial investment company, and was responsible for financing and investment communications. From March 2000 to December 2002, Mr. Niu served as the Assistant to the Chief Executive Officer of Shidean (Shenzhen) Technologies Company Limited, an electronic intelligent security company, and was responsible for managing the company's Electronic Research Center and building intelligent electronic systems. From September 1999 to July 2000, Mr. Niu served as an Associate Professor at Macau University. From March 1995 to August 1996, Mr. Niu served as the Vice General Manager of China Golden Net Investment Company Limited, a financial investment company, and was responsible for website operation and investment. Mr. Niu received a PhD in international finance from the Hong Kong Polytechnic University in 2008.

There are no arrangements or understandings between Mr. Niu and any other persons pursuant to which Mr. Niu was selected as a director. Mr. Niu has not been a party to any transaction requiring disclosure pursuant to Item 404(a) of Regulation S-K.





POSITION: Both Long, so don't let me down!!!!!!!!!!!!!

Weikang Bio-Technology Announces Fiscal 2010 Financial Results

-- Revenue Rises 57.0% to $74.6 Million

-- Adjusted Operating Income Climbs to $37.6 Million

-- Adjusted* Net Income Hits $28.3 Million or $0.95 Per Share

-- GAAP Net Income Up 56.5% to $24.4 Million or $0.87 Per Share

"Our business strategy was very successful this year, as evidenced by strong double-digit annual growth in both our top and bottom lines and an especially strong fourth quarter," commented Mr. Yin Wang, Chairman and CEO of Weikang. "Our market share continues to improve with our successful new product launches and expanded sales channels. The five new products we launched during 2010 contributed roughly $11 million to our total sales, and we plan to launch four new products during 2011, three of which we expect to roll out during the first quarter."


Mr. Wang continued, "We are committed to implementing improved marketing and promotional strategies as well as aggressive R&D, both of which contributed to our strong performance this year. Furthermore, we have streamlined our cost structure in order to provide the highest quality product at the best value, and we look forward to continued growth of this nature as we continue to pursue additional US investor support and interaction in 2011."


FY 2010 results

Shareholder Starr sues China MediaExpress (CCME)

CASE

Man Shing Agricultural Holdings (MSAH) Update on Operations in Japan

Press release

When will we see one buck?

China Marine's 'Hi-Power' Becomes the Exclusive Algae-Based Beverage of the National Sports Training Center

Press release

Positive attention to their brand could lead to new distribution channels countrywide.

China Organic Agriculture (CNOA) people come and go, what's happening?

8-K filing SEC

Last December they appointed Chunyan Liu as Chairman and Mr. Zang as CFO. Today both men resigned. Something fishy is going on at China Organic Agriculture (CNOA).

8-K filing SEC December 2010

"Both Liu's vision and solid experience in agricultural planning and decision making and Zhang’s relationships and extensive background in the financial markets will help the Company accelerate its growth and move to the next level”, said Mr. Qi Qian, CEO of China Organic Agriculture, Inc. “I’m glad to have them join us as Chairman and CFO of the Company. I look forward to working closely with both of them.”

China Stocks That Could Benefit From the Japan Earthquake

Article Seeking Alpha

Details about resignation of Deloitte regarding China MediaExpress (CCME)

SEE 8-K filing SEC

THE FRAUD BUS

- Why don’t we get on this bus?

- Something is wrong. Let’s wait for the next one.

China Botanic Pharmaceutical (CBP) Reports First Quarter Fiscal Year 2011 Results

First Quarter 2011 Highlights and Recent Events

Net sales increased 32.1% year-over-year to $22.6 million

Gross profit increased 45.8% to $13.8 million from $9.5 million in the first quarter of fiscal year 2010

Gross margin increased to 61.1% from 55.3% a year ago

Net income rose 48.3% to $10.9 million or $0.29 per diluted share

New products, including Qing Re Jie Du Oral Liquid, Compound Schisandra Tablets, Ginseng and Deer Antler Extract and Badger Fat accounted for 15.0% of gross sales in the first quarter of fiscal 2011

The Company passed the annual assessment for the High-Technology Enterprise certificate and will continue to enjoy a preferential tax rate in fiscal 2011. This rate of 15%, commencing on January 1, 2011, is notably lower than the statutory income tax rate of 25 percent, but higher than the zero percent rate the company enjoyed in fiscal 2010


Q1 results

10-K filing

Good Q1 results 

Greenberg: The Next Chinese Stock ‘Story’

Article CNBC

China MediaExpress debacle, Due Diligence another set required

Short sellers have won the case, congratulations!


In the case of China MediaExpress the human mind can deceive itself, everything was just to good to be true. The longs were unjustifiably optimistic. Maybe we subconsciosly overlooked important information and were so overconfident with the story that we fail to recognize how biases can distort the investment thesis.

The headline China MediaExpress CFO Resigns, Auditor Calls for Investigation

http://www.bloomberg.com/news/2011-03-14/china-mediaexpress-cfo-resigns-auditor-calls-for-investigation.html?cmpid=yhoo

will have a major impact on the US-listed Chinese space. A lot of long investors will get burned, but that belongs to investing. Don't put all your eggs in one basket.

The question remains how can we minimize the risk of another fraud. Due diligence is much needed, so Pinkerton and Kroll will see their business flourish if institutional investors want to be 99.9% sure that their potential investment is not a fraud.

What lessons can be learned?

First I would recommend the book Best Practices for Equity Research Analysts from James. J. Valentine to the analysts who covered China MediaExpress.

In a perfect world, equity analysts would be omnisciently aware of every aspect of a company's inner workings, including the level of conservatism or aggressiveness in its treatment of accounting issues. As much as the general media expects analysts see through walls and use clairvoyance to read management's minds, this is beyond the ability of most equity analysts. Very often when financial fraud occurs, the company has fooled even its own auditors, but this gets lost in the press, which point the blame at Wall Street analysts for missing the problem.

This isn't to say that analysts should just ignore accounting but, rather they should set expectations for what it is: an opportunity to see early warning signs that problems are developing; red flags.

Discovering these problems can require plenty of time and in some cases, specialized resources. Spotting red flags requires that the analyst understand the underlying economic transactions that generate each important financial statement item. Understanding how values are measured using the applicable accounting rules will enable you to identify items where management can take advantage of flexibility in accounting rules to achieve its financial reporting objectives.

A lot of private and professional investor are fooled so I hope someone could come with a red flag score system that would be helpful to the investment public at large.

China MediaExpress CFO Resigns, Auditor Calls for Investigation

Bloomberg News

China Organic Agriculture (CNOA) what's happening?

Since some weeks on my Red Flag list.

For me it is a red flag if a company doesn't make the effort to reply an email requesting for an interview.

It seems that the company doesn't take shareholders serious.

Class Action Suits Could Hurt China MediaExpress

Article Seeking Alpha

U.S.-Listed China Stocks Vulnerable to Management Buy-Outs

Article Seeking Alpha

Chinese IPOs in US to surge by 50% in 2011

SHANGHAI - The number of Chinese companies listing in the United States will surge by 50 percent this year after hitting a record high in 2010, said a senior partner of Ernst & Young on Monday.

He Zhaofeng, partner and Greater China IPO Leader with Ernst & Young, said approximately 60 Chinese companies will list in the US this year, from 41 in 2010.
"Actually, we are currently doing preparation work for about 20 companies to list in the US this year," said He.

The rise will be triggered by the expected appreciation of the yuan, China's projected economic growth and the successful number of IPOs last year, He said.

The successful US listing by Youku.com in 2010 - when Ernst & Young was the accounting firm for the IPO - will encourage more Internet and high-tech companies to seek IPOs in the country this year, He said. Youku, China's leading online video content provider, more than doubled its IPO price on the New York Stock Exchange on Dec 8, opening at $27 and closing at $33.44.

"Similar companies will believe that if their peers can do it, they can too. They will also seek funding through the IPOs to keep up with their competitors, who have already listed in the US," said He.

Meanwhile, the strong expectation that the yuan will appreciate in 2011 will also encourage US investors to buy shares in Chinese companies, He added.

Companies listed in the US, but whose main business is usually based in China, use the yuan to calculate their revenue and profit. Therefore an appreciation of the currency will make companies' dollar-denominated financial statements look better, and help to maintain the share price.

The yuan has appreciated about 4 percent against the dollar since mid-June 2010. An economist at UBS, Wang Tao, predicted in January that the currency will appreciate another 6 percent this year.

Ernst and Young's He said China's expected economic growth of 8 percent this year also make more US listings a "natural progression".

"The global IPO market has rebounded in the wake of the financial crisis. With the burgeoning recovery and China's economy maintaining its headlong charge, it's a sure thing that more Chinese companies will seek IPOs globally, and especially in the US," said He.

Among the 60 companies to be listed in the US this year, most will be small and medium-sized Internet or high-tech companies that have great growth potential, but have yet to post a profit, said He.

"Those companies usually find it hard to list here in China, where companies have to post a stable profit before they can file for an IPO," said He. "But in the US, all you have to do to get listed is to obey the information disclosure rules and the investors will decide whether you survive or not."

He expects that as China's stock market matures, IPO rules will change and become similar to those in the US, where the climate is better for "protecting investors and nurturing start-ups that show potential".

(China Daily 03/08/2011 page 15)

China at 60% Risk of Banking Crisis, Fitch Gauge Signals

Article Bloomberg

March 8 (Bloomberg) -- China faces a 60 percent risk of a banking crisis by mid-2013 in the aftermath of record lending and surging property prices, according to a Fitch Ratings gauge.

Fitch sees the risk of “holes in bank balance sheets” should a property bubble burst, Richard Fox, a London-based senior director, said in a phone interview on March 4. The risk assessment is from a macro-prudential monitor used by the ratings company.

Chinese banks fueled record property-price gains by extending a record 17.5 trillion yuan ($2.7 trillion) of loans over 2009 and 2010 under the stimulus program that propelled the nation through the financial crisis. Regulators’ efforts to contain the risks for lenders have included stress tests for declines in house prices and a crackdown on lending to local- government financing vehicles.

China’s risk of a systemic crisis is based on the nation’s MPI3 classification, the highest of three risk categories, in a Fitch monitor begun in 2005. The indicator signaled crises in Iceland and Ireland and has been tested back to the 1980s, Fox said.

In contrast with Fitch’s concern, the Hang Seng Finance Index, which includes five Chinese banks traded in Hong Kong, advanced 1.5 percent as of 3:34 p.m. local time.

Depleted Capital

Fitch follows an International Monetary Fund definition of a systemic financial crisis, Fox said. Such crises exhaust “all or most of the aggregate banking system capital,” cause a “large number of defaults” and “financial institutions and corporations face great difficulties repaying contracts on time,” according to a November 2008 IMF working paper.

“We’re talking about systemic crises here, affecting most of the major banks,” Fox said. “A crisis is something which technically de-capitalizes the banking system.”

Sixty percent of emerging-market countries downgraded to MPI3 face banking crises within three years, he said. China entered that classification in June. The indicator’s failures have included not sounding an alarm about the banking system in Spain, he added.

Banking systems in emerging markets are vulnerable to systemic stress when credit growth exceeds 15 percent annually over two years with real property prices rising more than 5 percent, according to Fitch.

Wen’s Pledge

Credit growth in China averaged 18.6 percent annually over 2008 and 2009 as house prices jumped, according to the ratings company. Chinese Premier Wen Jiabao pledged more efforts to cool the property market on March 5, telling lawmakers that “exorbitant” increases in housing prices in some cities are a top public concern.

The fallout from China’s lending spree may be bad loans totaling $400 billion, according to Hong Kong-based advisory firm Asianomics Ltd.

China is seeking to avoid a repeat of its last banking crisis, when the government spent more than $650 billion over a decade to bail out banks after years of state-directed lending.

Fitch’s concern contrasts with gains in banks’ profits and capital adequacy ratios and declines in non-performing loan ratios, according to data released by the China Banking Regulatory Commission.

The industry’s “capitalization has been noticeably strengthened throughout 2010, with capital ratios of major banks being well supportive of their standalone credit profiles,” Liao Qiang, a director of financial institutions ratings for Standard and Poor’s in Beijing said today.

‘Strong Liquidity’

“With reasonable loan loss reserves at present, good pre- provisioning profitability and strong liquidity, Chinese banks are likely to gradually absorb potential spikes in credit costs caused by looming bad loans, particularly from China’s property sector and local government financing platforms,” Qiang said.

Chinese banks listed in Hong Kong will likely report “strong” 2010 earnings when they report at the end of the month, BNP Paribas SA said in a report today.

In November, Moody’s Investors Service said that it had “concerns over the intrinsic, stand-alone strength of China’s banking system.” At the same time, the largest lenders weren’t materially damaged by the global financial crisis and aren’t likely to pose any significant contingent liability risk to the government balance sheet, the ratings company said.

Absorbing Losses

“Furthermore, we expect that future credit losses -- arising from the surge in lending in 2009, from exposures to the property market, from risky loans to local government financing vehicles, and from off-balance sheet operations in the ‘shadow’ banking system -- will be mostly absorbed by the banks themselves, either from capital, or from future earnings,” Moody’s said in a statement.

To limit risks for banks, China has increased oversight of lending to the local-government vehicles, which surged during the nation’s two-year stimulus program. In a March 5 speech to lawmakers, Wen pledged a “comprehensive audit” of local- government debt, while the Ministry of Finance said separately that “local governments face debt risks that can’t be overlooked.”

Banks have also been told to assign a higher risk rating to local-government loans.

The country’s “systemically important” lenders may be subject to an overall capital adequacy ratio of as high as 14 percent when their credit growth is judged excessive, a person with knowledge of the matter said on Jan. 28. Other lenders would need to meet a 13 percent threshold, the person said. The minimum ratio, used to gauge banks’ ability to withstand financial stress, is currently 11.5 percent for big banks.

Lenders including China Minsheng Banking Corp. and Agricultural Bank of China Ltd. have announced plans to sell more than 80 billion yuan ($12 billion) of shares and 70 billion yuan of subordinated bonds this year.

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Man Shing (MSAH) A ONE DOLLAR STOCK

Man Shing Increases Net Income Guidance to $8.8 Million, or $0.18 EPS, for Fiscal Year 2011


HONG KONG, March 3, 2011 (GLOBE NEWSWIRE) -- Man Shing Agricultural Holdings, Inc. (OTCBB:MSAH - News) ("Man Shing" the "Company," "we," "us," or "our"), located in the Shandong Province and one of the largest Chinese exporters of fresh ginger to Japan, the United Kingdom, and the Netherlands, today announced net income guidance of $8.8 million, or earnings per share of $0.18 based on 50 million fully diluted shares, for the fiscal year ending June 30, 2011, up from previous guidance of $8 million for the same period.


"It is with great pleasure that we are able to announce the increase in our net income guidance for the 2011 fiscal year to $8.8 million," stated Mr. Shili Liu, Chairman and Chief Executive Officer of Man Shing. "Over the last year it has been our priority to improve our capital structure and corporate governance including auditors, legal counsel and board of directors, while preparing ourselves for continued growth from operations both domestically and internationally."

Mr. Shili Liu continued, "Several strategic initiatives have already been set in motion for 2011. In December we entered into an agreement to produce ginger in Japan on 70,186 square meters of land. We believe that our presence in Japan will present us with several important advantages, including a higher price point for our ginger. Additionally, due to the high quality and safety standards enforced in Japan, we anticipate increased customer confidence. We will continue to evaluate opportunities to broaden our production capabilities and markets to sell our product."

Business Update

Capital Structure: As a result of the cancellation of 3,358,250 preferred shares (which were convertible into a total of 33,582,500 shares of common stock), the Company's fully diluted shares outstanding were reduced by approximately 33 million shares from approximately 72.4 million diluted shares reported immediately prior to the cancellation. Additionally, the Company issued 10 million shares of common stock in the previously announced $4 million financing. As of February 1, 2011, Man Shing had approximately 48 million basic and 50 million fully diluted shares of common stock outstanding.

Corporate Governance: In October 2010, Man Shing engaged BDO Limited ("BDO") as new principal independent auditor. In addition to BDO, Man Shing engaged Loeb & Loeb LLP as outside legal counsel.

Board of Directors: Man Shing strengthened the Board of Directors by recruiting Mr. Xuguang Qiao and Mr. Kun Xu, who both have extensive experience within the agricultural industry. Mr. Qiao's and Mr. Xu's agricultural industry perspectives and extensive network will be valuable assets to Man Shing as we continue to execute on our business strategy of being a leader in producing the highest quality fresh ginger. Additionally, both Mr. Qiao and Mr. Xu have done extensive research mainly focused on the genetic makeup of ginger and garlic, as well as the safety and quality control of vegetables.

Local Government Support / Brand & Media Awareness: During the second half of the 2010, Man Shing received positive industry and local government recognition. In early December Man Shing was awarded a top honor at an event co-sponsored by China New Village Online (www.zgxncw.cn), China New Village Management Council and Shandong Province New Village Development Selection Committee for its leadership in farming development in the Shandong Province and the Company contribution to local Anqiu community by creating jobs opportunities. Later that month members of Man Shing's management team appeared on CCTV 7's Science Garden show to demonstrate ginger production, storage and pest-control methods with minimal chemical usage.

Growth Initiatives: In September 2010, Man Shing entered into a securities purchase agreement with a group of strategic investors for $4 million. The financing was completed to lease additional farmland and expand warehouse capacity. Currently Man Shing leases over 5.3 million square meters of farmland. The Company plans to lease additional farmland to further execute the strategy to become one of China's largest ginger producers and to meet the increasing demand of high quality ginger in markets such as Japan and the European Union.

Production in Japan: In December 2010, Man Shing announced an agreement with Mr. Nagada Koumonn, a farmland owner in the town of Yinayityou within the Simane County of Japan to lease a ginger farm which sits on 70,186 square meters of land. This agreement is expected to provide Man Shing with several advantages including helping establish the Company's international farming presence, a higher price point for our ginger, and increased customer confidence due to the high quality and safety standards enforced in Japan.

Outlook for 2011: In 2011, Man Shing will continue its effort to improve the corporate governance and public awareness of the Company. It is the Company's intention to focus resources on high quality ginger products and selling ginger products to customers with high food safety standards. The Company is in the process of leasing more farmland, increasing production and storage capacity and modernizing its production cycle to satisfy current customers' demand and further expand its customer base.

About Man Shing Agricultural Holdings, Inc.

Man Shing Agricultural Holdings, Inc., through its operating subsidiary in Shandong of China, is focused on the production and processing of fresh ginger and other select vegetables such as onion and garlic. The Company produces high quality ginger which meets the requirements of the British Retail Consortium Global Food Standard. The Company focuses on customers located in countries such as Japan and the European Union which are food safety oriented. For further information about Man Shing Agricultural Holdings, Inc, please visit the Company's website at http://www.msaginger.com/

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POSITION: LONG