I don't think SORL's price weakness now is due to fraud concerns - let's look at other auto part Chinese companies listed in the US -
ZX -came via a proper IPO last year, but price down in the dumps CXDC - Morgan Stanley invested in this company last year, but stock price down in the dumps CAAS - PWC signed off on their financials last year and have stayed on as auditor, but stock price down in the dumps
If it were a legitimacy issue, CAAS and CXDC wouldn't be down the way they are. I think the weakness is related to weakness in the Chinese auto market. There is no denying the fact that China's auto market has slowed significantly for now. When that market picks up, all the above stocks together with SORL should be just fine. The short interest in SORL is at the lowest level it has been in a year - if people were concerned about legitimacy, the short interest would be skyrocketing, not coming down. Check for yourself on nasdaq website.
That is an interesting comparison and your conclusion seems plausible. Appreciate your thoughts and hope something turns Sorl's price around soon. I bought it as a long-term hold several years ago. It still seems like a solid company at a bargain price, but I am a novice China investor and could easily be wrong.
Ditto. I too bought it few years ago - found the company's fundamentals and prospects too good to ignore. Really like their balance between -
1. OEM & after market sales 2. Local and growing global presence
Not at all worried about the huge price decline. Over time, this business should do very well. And the stock should follow. And in the minefield of China RTO space, no one has ever raised a finger on SORL, or at least I haven't come across any fraud allegations on the web. Insiders own 50% and have not sold a single stock in the past two years. If there was fraud, why would the CEO keep sitting on his 50% stake all this time and watch its market value come down precipitously since start of 2011? Doesn't make any sense. I would have bailed out a a big loss if there was even the slightest hint of fraud, but am not going to sell just because the price has collapsed. That is no reason to sell in my view.