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Longwei Petroleum Investment Holding Limited Message Board

  • sino920 sino920 Jun 19, 2011 9:10 AM Flag

    Kevein Chen updates LPH. a MUST read.

     
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    • One of the key points Chen makes:

      "the top 7 to 10 suppliers together likely account for 95% of LPH’s annual material purchases. So, to audit 95% of LPH’s cost of sales, its auditor only needs to send inquiry letters to no more than 10 companies to ask them how much their 2010 sales to LPH was. Of course this kind of information is confidential, but any supplier will have no problem releasing it as long as the requesting party has a written consent from its customer. For the auditor of the company, which is an accounting firm with reach experience auditing Chinese clients, it is not an exaggeration to say that doing this is really a walk in a park for Child, Van Wagoner & Bradshaw.
      http://www.staranalystonline.com/

    • Nice piece of work, no doubt a further catalyst for LPH. The 'advances to suppliers' issue has evidently been a biggie for many retail investors. Obviously, Rochdale, Fidelity and Rodman/Renshaw are comfortable with this question. Which, BTW, was nice to see Chen specifically mention in his article.

      • 1 Reply to claefanortnorq
      • Is it Ok to reply to yourself? A comedian once said it is ok to talk to yourself, just don't do it walking down the street; it doesn't look good.

        Another point I appreciate greatly about Chen's work; His modesty and reasonableness. Notice point no.5

        "It is almost impossible that any of these big and well-regarded suppliers would take customers’ deposit and run away or eat it own words written in contracts to supply a valuable customer like LPH petroleum products at deeply discounted, very competitive prices in a timely matter. The implication: LPH’s advances to suppliers are safe and well spent for a good purpose."

        Notice the word "implication". He is not dogmatic, stating his opinion as if it was fact. He acknowledges the universal truth that things CAN be different than they seem. He likewise says "it would be ALMOST impossible". Again, acknowledging that bad things do happen.

        His discussion is reasonably based on all the currently available information; (and his sources of DD are far better than 90% of us, as evidenced by his results and references). That is called risk management.

        I find his DD refreshing and informative, and not because it is what I am hoping to hear. As I have stated before on this board before, most straight forward, reasonable discussion is easily recognized by reasonable people.

    • i bought LPH long. I smell some thing good on this one and I am not a china stock fan. Tradergirl

    • Clae,Vito, faxed, et al, I must say that it is becoming unnecessary to pay too much attention to the LPH boards any longer. We know 99% of what is reasonably required to know as an investor....and then some. Red Chip posts timely info on their site, Chen is a good read, I contacted Rodman the other day and found out who the analyst is that is covering LPH for them, and will see what I can get out of her, LPH's website is very pro now, my own trading platform contains a lot of stuff.....what else do we need? There is so much c rap on here now that I barely have the time to get all the cranks on the iggy list!

      There are a few important upcoming events - acquisition(s), SOX compliance, potential auditor announcement, and Toups' plans for his employment. These will be dealt with very soon imo. I think those that bought at these prices for the last few months are in a good position. I need it to get back up to $3+ to feel like I have made any headway myself. We'll see what the next few months bring. In the meantime, I'll only be around here occasionally from here on in. It's summer, and the lake is calling.....:)

    • CB: I do thank you for all your insightful posts. A year ago the board had intelligent discussions and seems to have recently degraded. Keep in touch, your comments rise above the noise posted by others.

    • as usual CB, good point. Unfortunatly, the good posters here have been heard from less and less lately because of all the crap.

      On occasion, I will have a question or comment for the true longs here. Be sure to check in once in a while. The next ten days will be interesting. I truly hope your investment here will prove successful for you.

    • Clever morepav - but mostly irrelevant. You've picked some very good quotes out of the reports that appear to be fatal to the process. However, these are the accounting equivalent of not dotting some i's and crossing some t's. Nothing was fatal to these companies and they didn't even re-issue statements. LPH just issued similar language on the last 10K over the way the warrants were being treated. It was just a technicality, and had no effect, but they have to use the words "previous statements cannot be relied on...yadayada". Unless you have been exposed to high level financial audits, you could be forgiven for assuming that the sky is falling when mistakes like this are made. Hard to imagine, I know, but accountants and auditors can have differing opinions on the way items in a financial statement are "treated". It is a "grey science", and much is an "interpretation" of the facts. That's why auditing isn't foolproof for any company, in any country. At the end of the day, you have to look at the business the company is in, its model, its experience, and their filing records over a period of time. I am sure if put under a microscope you could find all kinds of little deficiencies in LPH's statements and filings. Does that mean they are fraudulent or doing something behind everyone's backs? No. Does it mean they are squeaky clean? No. In this case, time will tell. Most of those who have done a lot of DD on this though are confident that it is what it appears to be.

    • CB, I read this too - violations were in 2007 and appear to be a common technique used by Chinese companies in depreciating investment. Paver's technique is obvious. Smear and fade.

    • Wake up, CB. While Cai doles out thousands of $.66 shares to his pals or wealthy R&R clients (maybe YOU'RE one), you defend this against any negative PR like a rabid guard Chihuahua. I could speculate why, but then I would be dragging myslef down to your level.

      This sounds suspiciously like the NEP board - the pied pipers arrogantly dismissed or supressed any negative discussions, instantly labelling anyone who wouldn't drink the Kool-Aid a paid basher. They disappeared like cockroaches when NEP's own bad numbers forced a halt. No pied pipers around by that time. They had drummed up enough support to bail at 10 and left the doe-eyed bagholders stuck at nine and a halt. How coincidental.

      I have no idea what this stock is going to do, but I'll be here a year from now, up or down. You'll only be here as long as it takes to run it up to - what - $2.50 again? Then we'll never hear from you again.

    • "...CVWB's record has by all accounts been very clean for many years. Suddenly, one CEO of one company has allegedly pulled a fast one on everyone, and now the auditor is incompetent?..."

      Answered with a scathing PCAOB audit indicating incompetence.

      Answered with NEWN's being forced to restate indicating incompetence.

      All this after the CVWB misses a $25M fraudulent 'acquisition' at YUII.

      CB's response: "...It is a "grey science", and much is an "interpretation" of the facts..."

      I see - so when my unfounded accusations are supporting by 'facts', then the original issue suddenly becomes irrelevant. Yet the longs seem perfectly willing to censor or mount personal attacks to guard LPH against such seemingly irrelevant issues. Now why is that, CB?

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