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Lihua International, Inc. Message Board

  • jpnmqrtn jpnmqrtn Mar 21, 2013 7:28 PM Flag

    Accumulating II

    Very in tune comments with ongoings here, For sure 5-10$ million repurchase woul;d have sent a strong message to the longs here, the shorts here, and made this a legitimate stock to own. The cash these guys are generating is incredible and to consider they did not really do much is astonishing to me.

    The 10K does have a one liner in there about Aquisition.

    I agree sheeting the copper with insulation would make a lot of sense to get vertical. I am sure the margins are better as copper insulated wire is astounding as to how much it costs. I would also have to acknowledge anybody already in this space must see LIWA as a potential Gem.

    The 10K also gives quite an exceprt on short selling....really they feel obliged to describe it and explain what it is to everyone. We know what it is but we needed action not a definition. and they did nothing.

    What else can be said? Instead they say No dividends, No repurchase of equity, in surrounding paragraphs.

    I have to consider the reverse logic. The rape continues without intervention and the company provides the cover for it to happen. We are not on the same side.

    Why not buyback..cause they already are in other not so public ways. This is the cheapest way to do this. Company sponsored buybacks would be more costly and give those scared hope. They do not want hope they want fear. But, the legal things to satisfy SEC are clean, clean, clean. so at the end of the day it is your own personal fear of being raped and nothing to do with the company doing nothing..although they provide cover by assuring they will do nothing. Illegal...try proving it.

    The system is grossly flawed with the assumption longs and management are on the same side. I hope I am wrong but they will not let this go for 20$ to us, They pay us 8$ and sell it for20$ yes. Especially, after all those they ripped of at $3 and 4$. We won't see 20$.my opinion.

    This is why patience will likely pay off. Eventually, there is no one left to rape.

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    • elpasojet Mar 21, 2013 8:33 PM Flag

      The best argument that LIWA should go private is because CEO can buy back his company at 85% of its book value, that is what I have heard. Is there any other reason besides this? I know ethe Chinese governmnet will help those who want to do MBO on their US listed RTO, but that is to create a exit for those who wants to leave US because the equity financing door is already close off to them. LIWA do not even see that they need equity funding as far as the company can see.

      What is the reason why so many investors believe CEO of LIWA wants to take the company private? The reason why LIWA came to US to get listed is to raise equity funding to realize his goal of growing LIWA into a large size company in China.

      CEO already achieved his first goal which is to securing financial resources to expand LIWA. Now that LIWA becomes a self-funding company and still generate more cash flow for continual expansion, what is the reason to go private? LIWA get $2.62 per share on issuance of common stock on average, now that every cylinders are clicking, just because the current stock price is low, it justifies LIWA to go private? Nothing in life stays for ever. VIPS, CBPO and many other stocks were selling pennies on the dollar before also.

      CEO will have to either borrowing money from financial institution with interest payment, or partners with PE that comes with harsh term and might lose part of the control of the company in return. CEO & COO will get their fame & fortune when LIWA becomes a mid-size public company listed in US with a mid-billion dollar in revenue and eventually enjoying having a net worth of $200MM to $300MM, it is what a lot of Chinese business dream of and still have full control of LIWA.

      Sentiment: Strong Buy

      • 1 Reply to elpasojet
      • I think the chances of it getting higher are good so long as we can be patient. I plan to be on this rocket when the launching takes place. I will worry about where to get out later. I am ok if I am wrong and management, the company and all its shareholders get filthy rich. That would be perfectly fine by me. The possibility is not as remote as maybe it sems. A couple big big days and the burn higher surely would be interesting to watch.

    • elpasojet Mar 21, 2013 8:08 PM Flag

      My calculation of free cash flow of LIWA by the end of this year assuming the new smelter comes into operation, CCA wire is up and running, will be between $65MM to $65MM. If they have any plan to acquire any small company and/or paying for more land lease for future expansion, these will be the money that they have available for expansion. LIWA still can do at least $2MM of stock buyback EACH YEAR with no sweat.

      They also mention about the "Auditor oversight problem" as one of the risk.

      I disagree the $8 price tag, with BV of LIWA is already at $9.30 going $11.50 by 12/31/13. Current ongoing rate is 85% of BV. The timing is off. It usually takes 1 year to close out the MBO offer, the price tag of $10 is a minimum and with EPS of over $2 per share, it can easily be challenged & tie up in court for a while. CEO should do the MBO back in 4th quarter of 2011 & close out the deal by now. Even if CEO delpoys other people to buy LIWA at current price, it will reduce the float of LIWA further which will result in higher stock price.

      Without negative hit piece in place by short seller, they still have 1.4MM short shares, where are they going to go? I am sure shorts already went to count daily truck traffic pattern like they did on LPH because GEO also have a watchful eye on LIWA, but so far nothing from them or Muddy Water neither ever since their "Fraud School" story was printed last April.

      LIWA also is few of the US listed Chinese RTO that have the audit performed on their Internal Control System which most Chinese companies stay away from doing that because that is the path way for them to cook the book.

      I really don't know who is doing what tricks, if you look at LIWA 3 & 6 months chart, LIWA stock price might surprise us on the upside. Since October 2, 2012, LIWA started its climb from $3.53 to $5.34 last Friday (up 50%) with slow stoch at overbought territory before retesting 50DMA ($4.97) before rebounding. LIWA chart looks bullish & trading volume is pickin

      Sentiment: Strong Buy

      • 3 Replies to elpasojet
      • tdcburns Mar 22, 2013 7:36 PM Flag

        you all forgot to mention that not only is Book Value going thru the roof up 15% a year on top of earnings and massive self funded expansion, this LIWA cash cow in increasing cash by about $16M a quarter too.

        Too many other great things happening to even talk about.

        LIWA should have been $15 a year ago, $25 now, and $40 in 2014.

        Buy the dip, buy hit and buy the rip.

        Some day "Forest will Run".

        Sentiment: Strong Buy

      • Absolutely, I am good hanging out ...hanging on to Liwa. 10$ close enough. I think it is worth 20-30$ with any growth multiple and further expansion. Float is extremely tight when you take out Magnify.

        Thats the other piece of this...who in their right mind would be short 1.4 MM unless they are hedged or more importantly.."have quanitative cover from the inside". The freaken 10K was bullet proof except the silly stuff.

        These guys are nailing it...all except no share price move and no company intervention. Coincidence? Maybe...Maybe not. I think everyone should at least consider the maybe not. Not saying it is definitive but I am suspicious. Obviously aah. The board psycho job...

      • elpasojet Mar 21, 2013 8:11 PM Flag

        Should be $65MM to $75MM. (Typo)

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