China Portfolio Round-Up
posted by The Traveller on Sunday, January 31, 2010

Another rough week for Chinese Small Caps on US markets has passed. Many of the stocks in this universe lost about one third of their value in the past two weeks. This is not a small correction and with general US markets being weak and on the verge of another breakdown it is possible that we even see further downside in the China space.

The China Model Portfolio is focusing on long-term trades in undervalued growth stocks, that means that while it is sometimes painful to watch the portfolio value drop we do not have much reason to worry in the long term as long as the underlying values and stories of the portfolio positions stay intact. Or take it this way: all of the undervalued growth stocks from last week are no lesser growth stocks but even more undervalued now.

I would advise to take a cautious stance with starting new positions now and wait for the general markets to stabilize and to form a base. It might be that you have to buy in at a higher price as sentiment in the China space can sometimes change very quickly, but I prefer buying in an uptrend to reduce downside risk. The only type of stocks I would consider at the moment would be thinly traded OTC stocks where you can get huge bargains if you are lucky as buyers seem to have completely disappeared, volume has completely dried out, and you could benefit from 'stink bids' getting served by desperate, panicking sellers (see RDBO this Friday).

Biostar Pharmaceuticals (BSPM)

BSPM is down 30.53% from its recent high at $4.75 (January 5th). The stock is currently trading at a forward P/E of just 3.88 based on my FY10 estimate of EPS $0.85. That is a bargain for every long-term investor, especially if you consider the company's growth prospects and the (not very well communicated) intentions of the company to uplist to NYSE Amex in the very near future.

China Architectural Engineering (CAEI)

The stock is not moving much in this downturn, still sits at its base that formed last November/December. That's about all the positive to report. CAEI stays a potential turnaround story, a world class engineering and construction firm that you can buy at very depressed levels. I would limit exposure to a small position though as there is no immediate catalyst for the stock price coming up.

China MediaExpress (CCME)

CCME is down 20.72% from its recent high at $14.82, achieved on January 19th. With the current negative sentiment in Chinese small caps, CCME got dragged down with the rest of the group. That doesn't mean anything about this growth story would have changed, so I would stay calm and sit it out. China MediaExpress will likely be back in focus strongly when buyers return to the China space.

China Armco Metals (CNAM)

CNAM is down 26.67% from its recent high at $4.50 (January 20th). The stock is dropping on very low daily volume of just about 20,000 shares last week, there are no buyers in many of the OTC-traded Chinese growth stocks. Should that make us worried? Not at all - if all goes as planned with the new scrap metal factory, the company can make up to one dollar per share in net income this year.

China Biologic Products (CBPO)

Down 27.66% from its January 11th high at $13.70. The stock took a big hit last week on a Seeking Alpha piece which questioned the background of a member of CBPO's senior management and claimed the company was seeded with stolen money. China Biologic responded with a press release, claiming that the article was based on research backed by a hedge fund that is shorting the stock and that they see this as "an attempt to discredit the Company's management and disrupt the Company's business and operations." Several analysts (Brean Murray, Rodman & Renshaw) came out in defense of the company, maintaining their buy ratings and price targets in the mid-teens.

By Friday's close, China Biologic's stock price has recovered more than 20% from Wednesday's intraday low of $8.13, so the overall drop from the January highs is now more or less in line with its peers in the sector. However, as there are doubts raised about senior management the stock might be stained for a while. To reflect that, I will reduce my price target by 10% from $15.00 to $13.50.

China Kangtai Cactus (CKGT)

CKGT is down 21.00% from its January 11th high at $3.00. As with many other OTC stocks, volume dried out completely towards the end of last week and is now a mere 25-40% of the average. Despite this drop the overall story of CKGT turned even more positive last week. The company reported that "the demand for our newly launched cactus cigarettes has exceeded our expectations," and CKGT secured a $2.1m contract for those cigarettes on Tuesday.

China Sun Group (CSGH)

China Sun is down 33.19% from its recent high at $2.35 (January 8th). Nothing in the story has changed, but there aren't any new developments to report either. Still waiting on concrete facts about the new finished batteries for the automotive industry. Rick Pearson put up a neat video about him visiting CSGH's site on

GC China Turbine (GCHT)

GCHT successfully bucked the trend and is actually up 5.75% for the week. This might have to do with a slew of press releases last week. On January 26th the company announced three new development projects with the Baicheng Municipal Government, adding up to a "potential value of orders in excess of" $550.4 million. The following day GCHT added another development project in Liaoning Province valued in excess of $34.4 million. Slowly we learn where the company's ambitious growth and revenue guidance is coming from, looks good at this point!

L&L Energy (LLEN)

The stock is down 26.21% from its January 12th high of $8.09. LLEN is currently trading at a conservatively estimated forward P/E of 5.1 which is, considering the growth prospects and uplisting plans of the company, very cheap. There are no indications that China's demand for coal is easing, quite the contrary. I like the stock here very much.

Lotus Pharmaceuticals (LTUS)

After a huge run-up the stock is now down 30% from its January 21st all-time high at $2.00. Volatility has been very high in LTUS the past week with huge intraday swings and the indication that contrary to many other OTC-listed Chinese stocks, there are still buyers out there for Lotus. I wouldn't be surprised if the stock will relatively outperform its peers in the next upswing.

New Energy Systems (NEWN)

NEWN announced significan news last week that has been completely overlooked by the market in the current negative sentiment for US-listed Chinese small caps. The company announced a $3m distribution agreement for solar mobile iPod and iPhone chargers. This is significant because it marks the first ever contract for the company outside of China and when there is one, more will follow. Another positive is that NEWN is obviously delivering on their promise to improve investor awareness and put out a bunch of well-designed press releases in the past weeks that give a good picture of the company's progress and growth prospects. At the current forward P/E of about 5 I consider NEWN one of the top holdings in the China Small Caps space and THE most promising stock in the lithium-ion space overall.

Orient Paper (ONP)

I have a price target of $14.50 on the stock and the stock traded above $15 both on January 12 and 13. If you follow the China Model Portfolio and you had a chance to see the price target being reached, then you could have sold the stock and would have done the exact right thing. The rules I set for the portfolio do not allow me to make mid-week changes and it was very unfortunate that ONP's weekly close was always well below the target price. But I want to stress that those targets are there for a reason and if one of the portfolio positions reaches the target price mid-week you should consider to get out. After all, it is a purely random decision to make changes only at Friday's close (could have been Tuesday or Wednesday and the ONP position would be gone now).

In the meantime, ONP lost a whopping 40.53% from its all-time high at $15.15 and the stock is back to where it was in November. If I could have sold the position at the target price I would likely now re-buy it here at $9.00 as there is absolutely nothing in the story that justifies this 40% drop. Now we just have to be patient for the stock to reach the target again.

Skystar Bio-Pharmaceutical (SKBI)

Surprising action in SKBI last week as the stock was the biggest loser in the model portfolio. The only identifiable reason was a note by to remove the stock from their recommendation lists. GeoInvesting's reasoning is "unimpressive EPS growth for the next three quarters," and they have a 2010e EPS of $1.80 in their research.

Now this number of $1.80 is exactly what I have on my lists as well and it translates into a forward P/E of 4.80 for a Nasdaq-listed stock in a high growth industry. Funny enough, GeoInvesting projects accelerating EPS growth of up to 46.3% in Q4/2010 and with their forecast of weak Q1 number, growth in Q1/2011 will be even more impressive coming from a low base. GeoInvesting's call makes no sense at all and we all should just ignore it, in this market environment many did not, though.

Worldwide Energy & Manufacturing (WEMU)

WEMU announced a new financing last week which means a 94% dilution (incl. warrants) for current shareholders. The stock dropped hard but held up above the offering price of $4.50 which is a sign of strength in this market. While this kind of massive dilution is exactly what I do not want to see ever again in any of my holdings, I am still willing to give the company a chance to deliver on Q4 and FY09 promises with their annual report that is due at the end of March. If there is no upside surprise in those numbers I will sell the complete position immediately.

The massive share increase with the financing certainly makes my old price target for the stock unsustainable. I am reducing the target price for WEMU from $15.00 to $9.60, based on 12x projected 2010 EPS of $0.80.

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Rough Week for Chinese Small Caps
posted by The Traveller on Sunday, January 24, 2010

Many of you have been waiting for this and now we've got it. The first major correction in the general markets since October 2009. As far as I am concerned nothing bad has happened so far, quite the opposite actually: we are consolidating the huge gains of the last three months in an orderly way so we have room for further price appreciation.

The most positive scenario for next week is also the most likely. We are back in the November/December trading range between 1085 and 1110 points in the S&P 500. This area held for six weeks last fall and the 1085 level should provide good support. I do neither expect a massive drop (10% or more from current levels) nor a big rallye (as in continuing the run up of '09 in full speed) for this year. Rather the markets will act similar to what happened in 2004 when the setup was also a big crash (2001/02) followed by a huge rally (2003).

This will be a stock picker's market where fundamentally sound and relatively undervalued stocks will outperform both risky and speculative plays and also big cap market leaders. And those value stocks are exactly what I am looking for here with the China Model Portfolio.

There will be some volatility, bubbles as well as sell-offs on the way but I do fully expect that emerging markets will continue to outperform the US and Europe and also that the gap in valuation between US-listed Chinese stocks and their American peer will continue to narrow this year. But beware, not everything with a China-tag will behave like this, picking the right stocks will be crucial now more than ever.

I am making several adjustments to the China Portfolio this week:

China Recycling Energy (CREG): CLOSING POSITION: The stock has reached our target price of $4.50 and the position is now closed. The company will announce 2010 guidance with the annual report in March and without that guidance risks outweigh chances at current levels. I am SELLING 2000 CREG for Friday's close at $4.68 for a 65.37% gain or $3,700.00.

L&L Energy (LLEN): INITIAL POSITION: I was waiting for this stock to provide an entry point and now it looks like the $6 level will hold. L&L is a Chinese coal-mining and coal-washing company that also runs a wholesale distribution network. L&L is growing extremely fast in all these business areas. Last August the company guided for fully-diluted 2010e EPS of $0.94 and year-over-year net income growth of 183.8%. At current levels this translates into a P/E of just 6.5 and with this projected growth rate I won't even get into a P/E/G ratio.

But it doesn't stop just here. This month alone L&L Energy announced two acquisitions which should provide upside to the August guidance. The company added additional coal washing capacities and also another operating coal mine. And another major catalyst for the stock price is expected in the next three months: uplisting to a national exchange (NYSE/Amex or Nasdaq). I am ADDING a FULL POSITION of 1500 LLEN for Friday's close at $6.15 to the China Portfolio. My price target for the stock is $13.00 based on 12x expected EPS of $1.08. I consider this target to be very conservative with likely upside later in the year.

Currently there are several other potential additions to the China Portfolio where I am looking for an entry point. Those stocks include RINO, YONG, LPIH, UTA and NEP. As I can only make adjustments to the portfolio at Friday's close you might want to consider those five stocks during the week if a good opportunity to start a position comes up.

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China MediaExpress (CCME)
posted by The Traveller on Sunday, January 17, 2010

I have added a Full Position of China MediaExpress (Amex: CCME) to the China Portfolio this weekend. The stock broke out from a two week base this Friday and is headed for much higher levels from here. I am setting a price target of $26.00 for the stock, or 12x targeted net income of $2.17 per share for 2010.
China MediaExpress operates the largest television advertising network on inter-city express buses in China. The company generates revenue by selling advertisements on its network of television displays installed on over 20,000 express buses originating in fourteen of China's most prosperous regions, including the five municipalities of Beijing, Shanghai, Guangzhou, Tianjin and Chongqing and nine economically prosperous provinces, namely Guangdong, Jiangsu, Fujian, Sichuan, Hebei, Anhui, Hubei, Shandong and Shanxi which generate more than half of China's GDP.
For a full analysis of China MediaExpress please read this excellent blog post at As you can see there my price target for CCME relative to its peers is very conservative, but I would not recommend to set the bars too high at this time.

CORRECTION: Price target is $26.00! Thanks to the reader who pointed out the typo in the original post.

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China Sun Group Analysis
posted by The Traveller on Friday, January 15, 2010

China Sun Group High-Tech (CSGH)

China Sun Group released Q2/10 earnings per 10-Q SEC filing last night. Here are some key numbers:
  • Revenue: $10.1m (up 32.9% year-over-year and up 8.6% sequentially)
  • Net Income: $2.0m (up 11.5% year-over-year and down 2.2% sequentially)
  • Gross Margin: 30.0% (down from 36.7% last year and 32.8% last quarter)
  • EPS: $0.04 (up from $0.03 last year and unchanged sequentially)
  • Cash: $11.66m or 11.37% of current market capitalization
  • Debt: none
Key business developments:
  • average sales price decreased slightly by 3%
  • significant increase in the prices of raw materials
  • company spent 68.79% less for sales and marketing of products
Cobalt Mine plans delayed by 2 quarters

"We plan to start the construction of a processing plant in Congo in the fourth quarter of the 2010 fiscal year. We anticipate that the construction of the plant will cost approximately $2,000,000 to $3,000,000."

Electric Vehicle Battery

On Oct 27, 2009 CSGH announced that "two of China's leading battery producers, Shandong Shengong KP-Power Co., Ltd. and Beijing Zhongxinlian Shuangsheng Sci-Tech Co., Ltd., have successfully completed testing of li-ion batteries using DLX components. The companies are now demonstrating a prototype battery to electric vehicle manufacturers to facilitate sales of finished li-ion products. In addition, China Sun Group has 21 customers undergoing technical testing of its new li-ion product." Currently China Sun Group's top five customers account for 83% of revenue, any news on new customer wins would be a big positive for the company. There are no news about recent developments in the technical testing of the new batteries or additional customer wins from the strategic agreement with Beijing Zhongxinlian in the 10-Q filing. CSGH is notoriously reluctant with issuing press releases or even doing conference calls so I do not expect any news until the company has anything factual to report.

Investor Relations

The company needs to greatly improve investor awareness and communication. Hiring a US-based IR firm would be a big positive as there are very many open questions that might keep the stock price depressed until clarified. Open questions that come to mind are:
  • "With the production of finished li-ion batteries, China Sun Group looks forward to expanding its business worldwide as a complete, end-to-end battery product manufacturer." How is this plan progressing so far?
  • When is the company expecting results from the electric vehicle battery testing? Is everything there still on track?
  • Is the trend of declining gross margins accelerating as the plain numbers would suggest?
  • Why has the construction of the Congo plant been delayed?
Bottom Line

Quarterly earnings per share of about four cents as reported for the past four quarters would justify a share price in the $2-2.50 range but without significant future developments there is limited upside from those levels. Those developments are uncertain for now as the company is not communicating any progress. CSGH is cash flow positive and cash on hand seems sufficient for 2010 financing activities, including the delayed construction of the cobalt plant in the fourth quarter. Any positive news about projected business expansion, positive testing results for the new batteries, and especially new customer wins in the electic vehicles market are the biggest catalysts for higher multiples and stock price.

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New Energy Systems is a Bargain
posted by The Traveller on Friday, January 15, 2010

New Energy Systems (NEWN) looks very cheap at current levels. Here are some numbers from the recent presentation as filed with the SEC:
  • FY 2009 guidance is $23-25m revenue and $5.3-6.0m net income
  • FY 2010 revenue guidance is at least $89.1m (+271%)
  • FY 2010 income guidance is at least $15.6m (+173%)
  • Organic growth projected (incl. acquisitions) is net $11.7m -> $15.6m (33%) year-over-year

  • Shares outstanding (fully diluted): 12.6 million
  • current P/E '10e (PPS $8.25): 6.66
  • P/E/G '10e: 0.2
2010 Objectives:
  • improve sales and profitability
  • maximize synergies (cross-selling opportunities)
  • expand international focus
If successful there is likely upside to 2010 guidance as company guided only for 6.25% revenue growth for core NEWN pre-acquisitions (that's where the "at least" comes in)

More Objectives:
  • significantly increase awareness in investment community
  • uplist stock to a national exchange in 2010
Now here's where the big opportunity lies (besides the current low valuation). There aren't that many profitable battery companies listed on Nasdaq/Amex (that was an understatement) and an uplisting will not stay under the radar in this industry, at least not for long.

Here are some valuation scenarios:

P/E of 10 / 15 / 20: $12.40 | $18.57 | $24.77
P/E/G of 0.5 / 0.75 / 1.0: $20.63 | $30.95 | $41.26

Investor Presentation:

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Record of 18 Chinese stocks in the Top50 of IBD 100
posted by The Traveller on Saturday, January 09, 2010

Chinese Stocks on the IBD 100 this week

With four re-entries there are a record 18 Chinese stocks in the Top 50 now. That should be unprecedented especially as there aren't that many Chinese stocks trading above $15 at all. The momentum is clearly on US-listed Chinese companies at the moment.

01 (01) HMIN Home Inns & Htls Mgt
04 (NEW) HEAT Smartheat Inc
05 (03) VIT Vanceinfo Tech Inc
06 (11) CTRP Ctrip.Com Intl
09 (08) CAAS China Automotive Systems
10 (09) JST Jinpan International Ltd
11 (NEW) FUQI Fuqi International
14 (12) ASIA Asiainfo Holdings Inc
19 (18) TSTC Telestone Technologies
20 (50) CISG Cninsure Inc
28 (32) WX Wuxi Pharmatech Inc
29 (33) CAGC China Agritech Inc
30 (NEW) CYD China Yuchai Intl
31 (21) BIDU Baidu Inc
36 (35) LFT Longtop Financl Tech
46 (41) CSKI China Sky One Medical
49 (46) HRBN Harbin Electric Inc
50 (NEW) DGW Duoyuan Global Water
63 (49) APWR A-Power Engy Generation


Fantastic Start of the Year
posted by The Traveller on Saturday, January 09, 2010

2010 started with a BANG!! lifting the China Portfolio up to new heights. I am making several changes to the portfolio positions this weekend and there will likely be another post tomorrow with some new additions.

Biostar Pharmaceuticals (BSPM): down 5.84% for the week, total return 48.58%
BSPM is consolidating its recent gains but there is much more room for the stock to appreciate, especially as I consider an uplisting to a national exchange to be imminent.

I am doubling my position in the China Portfolio here. I am ADDING 1000 BSPM for Friday's close at $4.19. I am also raising the target price to 10x 2010e EPS of $0.82 to $8.20.

China Agritech (CAGC): up 31.88% for the week, total return 87.39%
The stock has reached my target price of $35 and I consider it fairly valued at current levels.

Closing position: I am SELLING 250 CAGC for Friday's close at $36.86 for a 87.39% gain or $4,297.50.

China Architectural Engineering (CAEI): up 15.25% for the week, total return 13.08%
I am not very happy with this position since CAEI bought a multiplayer online game developer in December. Stick with what you're good at? However, CAEI stays in the China Portfolio for now as I expect its core business to do much better in the coming months now that the Dubai disaster is out of the way.

China Armco Metals (CNAM): up 34.07% for the week, total return 26.49%
China Armco took off this week as the opening of the scrap metal recycling factory nears. No changes to my original investment thesis here.

China Biologic Products (CBPO): up 7.62% for the week, total return 62.50%
China Biologic is rapidly approaching my target of $15. No changes this week, but I will have to re-evaluate the target price in the coming week.

China Kangtai Cactus (CKGT): up 3.32% for the week, total return 64.71%
Despite the 65% gain over the past six weeks the stock is still trading far below what I consider fair value. A problem might be an expected to be huge non-cash charge with Q4/09 numbers resulting from EITF 07-05 adjustments, but earnings shouldn't be out before mid-February.

China North East Petroleum (NEP): up 12.76% for the week, total return 75.00%
The stock has reached my target price of $10.20 - actually it has seen $11.59 mid-week - and consequently I am closing the position here. I am not ready to up the target price above 8x 2010e earnings. This doesn't mean the stock couldn't run much further from here, momentum is clearly on its side, but according to the rules set up for this model portfolio the position has to be sold here.

Closing position: I am SELLING 1000 NEP for Friday's close at $10.43 for a 75.00% gain or $4,470.00..

China Recycling Energy (CREG): down 5.10% for the week, total return 38.16%
Everything looks fine here. The stock was stalling last week but long-term prospects are as bright as ever. No changes.

China Sun Group (CSGH): up 19.89% for the week, total return 43.87%
Excellent week for CSGH took the stock to new all-time highs. I am raising my target price from $2.50 to $3.50 on momentum in li-ion stocks and expected imminent news from the company on customer battery testing.

GC China Turbine (GCHT): up 13.55% for the week, total return -13.11%
The stock caught some interest last week but that I expect it to go much higher with actually verifiable numbers for the fourth quarter. GCHT is projecting its net sales to reach $550m in 2012, up from less than $30m last year. While I think that this is probably too ambitious, we can safely assume triple digit annual growth for the next 2-3 years. Investor Presentation (PDF)

I am doubling my position in the China Portfolio here. I am ADDING 750 GCHT for Friday's close at $2.85..

Gulf Resources (GFRE): up 24.27% for the week, total return 63.73%
The stock has reached my target price of $14.50 and I consider it fairly valued at current levels.

Closing position: I am SELLING 500 GFRE for Friday's close at $14.49 for a 63.73% gain or $2,820.00.

Lotus Pharmaceuticals (LTUS): down 5.47% for the week, total return 40.77%
Quiet trading in LTUS last week. The stock is trading at 52-week highs after it broke through the $1.20 resistance in December.

I am doubling my position in the China Portfolio here. I am ADDING 3000 LTUS for Friday's close at $1.35..

New Energy Systems (NEWN): up 25.42% for the week, total return 40.95%
NEWN released 2010 guidance of at least $1.23 per share this week. I am raising my target price to 12x 2010e EPS or $14.75. I consider this target to be very conservative and it is likely that I am not selling the position when the target is reached.

Orient Paper (ORPN): up 29.58% for the week, total return 42.95%
ONP is one of the top momentum plays in the China space at the moment. After lagging the market for a while the stock took off now and even scratched my target price of $14.50 this week. I will re-evaluate this target now and keep ONP in the China Portfolio for at least another week, although a short-term pullback is quite likely.

Skystar Bio-Pharmaceutical (SKBI): up 6.04% for the week, total return -6.63%
I do fully expect SKBI to do what ONP did last week in the near future: making a jump of a few dollars on strong volume. I am not in the slightest worried about SKBI's relative underperformance in the China Portfolio so far.

Worldwide Energy & Manufacturing (WEMU): up 15.45% for the week, total return 15.45%
Nice first week for the newest addition to the China Portfolio. If this stock gets volume we can see it retesting the 2009 highs this spring already.

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EITF 07-05 and Non-Cash Adjustments
posted by The Traveller on Saturday, January 02, 2010

EITF 07-05 is effective for financial statements issued for fiscal years beginning after December 15, 2008.
Upon its effectiveness, contracts (warrants, conversion features in debt, etc) that embody or embodied full-ratchet or reset provisions (that is, the strike, exercise or conversion prices adjust to pricing in subsequent sales or issuances) will no longer meet the definition of Indexed to a Company's Own Stock and, accordingly, will not meet the exemptions for equity classification provided in ASC 815-15. Those instruments that were previously classified in equity will require reclassification to liabilities and ongoing measurement under ASC 815.
Many US-listed Chinese companies have already adopted EITF 07-05 to properly account for the value of their warrants. This resulted in non-cash adjustments to the income statements for all completed quarters of the current fiscal year and will also require such adjustments in future quarters, subject to, among other factors, changes in the Company's share price.

If the share price has appreciated in the quarter a non-cash loss will have to be recorded, if the share price dropped this will usually result in a non-cash gain. This is the main determining factor but not the only one. Now investors tend to react on GAAP bottom-line numbers that are affected by those non-cash adjustments, whether they mean anything for the company's business or not. Share price gains based on such non-cash gains are usually non-sustainable and vice-versa if a stock drops for a non-cash loss which is essentially based on the share price having appreciated in the past quarter then this move will usually be short-lived as long as the company's core business is healthy.

This can create trading opportunities. It might be advised not to hold a stock over an earnings release if a massive non-cash loss is expected to be recorded. Instead it might pay off to speculate on an initial dip after the numbers are out and to buy this dip. On the other side, a company that saw its share price drop over the past quarter might see a lot of buying interest when they record a non-cash gain that boosts GAAP EPS. Such a company is likely to make the bottom-line number stand out in the press release even if this non-cash gain is essentially a non-event for the business and performance of the company. It might be a profitable decision to buy the stock before earnings.

Much of a stock's reaction depends on how the company is communicating the EITF 07-05 related numbers. Most companies with non-cash charges will focus on non-GAAP numbers and report those charges only as a side note, if at all. Others will completely ignore the 'non-cash' effect of the loss (or gain) and communicate the plain numbers. It helps digging out past press releases to determine the company's reporting style.

I've made a basic table of 14 Chinese small caps that are affected by EITF 07-05. This table does not claim to be accurate - it is most likely not - but it should give an idea of what to expect for Q4 earnings which are due to be reported between mid-January and mid-February. The estimated non-cash adjustments in this table are based on share price only (which is not correct) and they do not factor in any other crucial elements as strike price of warrants or any possible developments in the fourth quarter like exercised warrants.

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