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Trade fair order higher then irregularity?? but that will depend on the margin of products, if margins is limited then it might not be as attractive.
sk6666 ( Date: 28-Jul-2012 10:02) Posted:
| Clarifications on BT report by CHX. visit sgx.com |
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If this is what you think then I believe you are first day in the market, there are so many counter out there which have all the irregularities and still listed in the SGX. Remember the ACCS, which is now name as MDR, citiraya industries now centillion, JEL Corp now know as GSH Corp, etc.. if you go and read their history, you know that not only china company are subject to all this irregularities. If china Hong xing continue to used the same name and face their mistake like CAO, I believe that it should be still possible for trader to accepted them. But if it follow what other company as mention before and change a name and hope people will forget the incident. Then likely those remember will never trust them any more.
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Personally, I think this is a much better case compare to the china aviation oil (CAO). That time CAO making a loss in the oil trading at 550million USD (equivalent to 4.583billion RMB) and they have only 150million USD to cover the loss. There is another 159million USD loan from the bank to be repay. and also the parent company was unwilling to pump anymore money into it, as they already pump 100million USD before the incident really happen. For the China Hong xing result in 3Q the group asset is 4.539billion RMB and the current overstate is 1.154billion RMB, which is around 25% overstate. But remember before the final halt, the price is suddenly reduce from around 0.15~0.155 to 0.115 which is around 23~25% reduction. I believe SGX should investigated on the trade before the halt, maybe there is some insider (who know the actual overstate) trading.
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That is hard to say whether will there be sell off or buy up, remember the China Aviation Oil, it was halt in 2004 at $0.945, followby the risky investment investigation and huge lump sum loss, it resume trade in 2006 and I remember everyone is calling for shorting the counter when it resume, but it open at $1.28 at the same day it went to the height of $1.83, and closed at $1.62, before the sudden drop to 0.945 it is trading at around $1.2, thus it have infact increase 35% after it resume trading.
Thus for Hong Xing it will depend very much on the 2010~2012 financial report release. As since the company have went through all the auditing and checking it will be more safe compare to other china listed company in terms of accounting faults, thus it might be an attractive points for account manager to keep an eyes on this counter, if the performance for the last two years is good.
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