Bad day. You just can't invest in crooked company. Sooner or later the LAW gets you.
Wish they would sell the whole company , all assets all contracts.. Create a clean slate.
This is ridiculous. Low capacity utilization is a good thing ? GURE is not a global competitior ? Meaning what ? It does not have foreign customers. Don't foreign producers export bromine to China. ?
Cheap labor advantage is gone with rising wages, rising RMB. Dead sea bromine concentration is 50 times GURE's. They are going out of business no matter the accounting.
Where do you get info they are earning 0.5% ? Do they have audits of their bank account. CEOs aren't stupid. I've seeing a lot of CEOs here and abroad borrow from company. Speculate in stock,commodity futures. They make the real money . If they speculate wrong the company doesn't get paid.
Is it drilling fluid ? US imports lots of that from China. Drilling activity is going down with lower oil price. Another negative for GURE. After bromine price 50% fall.
I'm not short. Just doing due diligence for investment opportunities. GURE isn't making it. I don't know if their accounting is true. I'm just suspecting their real business is facing significant head wind.
It is possible money laundering is involved. The man in question is the son of one of the most powerful figur in the CCP currently charged with embezzeling billions dollars. That raises all kinds of questions in accounting.
Bromine price has fallen 50% in RMB term in last 5 years. China's brine well concentration is 0.2. US brine is 2 to 6. Isreal dead sea is 12 g/l. Accounting issue aside. I think they have fundamental problem.
I was going to buy some cheap shares. Then maybe not.
Found more info in Danyan newspaper.
LIWA has 1.2 billion RMB debt. 330 hecter land, 150.000 square meter in 16 factory buildings. New owner purchased 44.2 % outstanding shares. Plans to list parent company using LIWA shell in 3 years. Is negotiating with banks to recapitalize LIWA. The parent company is state owned, banks are state owned. Local government very interested in LIWA not defaulting . Prior owner Zhu made bad investment in stock , futures, land, tungsten mine. Factory space utilization only 20%.
while fish price remain high. Not a bad combination.
I feel the linkage to LIWA is overblown. I studies LIWA over the weekend. It is a real comapny with 600 acres of land and factory. The copper melt down and prior owner's gambling in futures killed it.
Pingtan I think is also a real business. Real ships. While I can't vouch for their accounting truthfulness. I do think the fishing business is looking up. I have built a small postion here.
I'm a sucker for falling knives. This one looks like its already landed.
I've read again and again the latest ownership change. It is taken over by a provincial owned enterprise. Company has 600 acres of land. Significant number of factory buildings. News seem to indicate the previous owner gambled in commodity futures and indebted the company.
There is one sentence of particular interest. The new parent company indicates it is interested in LIWA's American stock market listing. I think this indicates it wants to list on American stock market using LIWA as a shell ?
LIWA is heavily in debt. Assets are unlikely to cover debt. The only chance share holders make some money is the new parent negotiate debt down with banks and merge with LIWA. Local governments are probably coercing all parties to this route.
I've built a tiny position in LIWA. Money I can afford to lose. Its a gamble, 10 times my money if I win.
Now . Why would anyone give me thumb down on this Ukraine peace talk news ? You want more war more death because you are short RSX ? You are a sic person.
Sigh. Another casualty. But where can you put your money. Interest rate so low, gov't debt and deficit so large. is why I'm in the market. Can't keep it in cash.
I hope today is bottom reversal day. I see a quick bounce to $16 if market sense oil bottomed. Or a Ukraine solution is signed. My gut feeling both are at hand.
I'm not buying more unless RSX drop to $12. Own too much RSX now.
RSX traded as low as 12,5 premarket. Recovered to 13.2.
Washington is waging economy war on Russia. How low , how long can Saudi keep oil price down ?
Not very long. Their petro dollar is all invested in money center banks, stocks , bonds ,real estate. They can not sell them without creating financial crises around the globe.
Down 22% now. Russian companies have intrinsic value. Micex is up. Market does not believe they deserve 22% shave. Another day of pain for me. My gold is up this morning so the pain will be less than yesterday.
Gold is up 100% in Ruble term.