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Shengkai Innovations, Inc. (VALV) Message Board

  • goldsilver@ymail.com goldsilver May 23, 2012 1:25 PM Flag

    Let's assume this is a fraud

    Extremely conservative book value calculation based on last quarter's report:

    CASH $13.9 million ($69.6 on last report)
    Let's say 80% of the cash doesn't exist

    ACCOUNT RECEIVABLE $3.1 million ($6.3 on last report)
    Let's say half their customers go out of business and don't pay

    INVENTORY $0 ($2.9 on last report)
    Let's say it is worthless

    PROPERTY, PLANT, EQUIPMENT $10.7 million ($53.4 on last report)
    They paid about $50 million for the new facility and equipment, but let's say it is only worth 20% of what they paid.

    INTANGIBLE ASSETS $0 ($7.3 on last report)
    This is probably the patents. Let's say they are worthless.

    TOTAL LIABILITIES $8.8 million ($4.4 on last report)
    Let's say there is some hidden debt and double the liabilities

    BOOK VALUE = $18.9 million or $1.13 per share

    The point is the stock is cheap even if you assume there is fraud and don't believe the numbers.

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