The Millipede
11 Aug 2015
Re: here is a question I think one of the problems with IC is that their focus is almost solely on the accounts, asset values, broker predictions etc and based on those they come up with an idea of share price value. In that respect they are exactly like all the posters here, and at Naibu, and at Quindell, who looked at the headline profit and P/E and said to themselves, "wow, what a bargain this must be with a PE of 1 and lots of cash" without troubling to think further.This approach might worth for larger FTSE companies, with decent corporate governance, honest accounting policies and a stable business environment to contend with. But throw in a financial crash (IC certainly were not predicting the imminent credit crunch as they tipped Northern Rock, or when they recommended RBS' first rights issue as large enough to cope with any further falls in asset values), or a fall in oil prices or a business environment unused to honest dealings (without wishing to stereotype: China)..... and, well, they come unstuck because the figures they have analysed turn out to be worth a lot less than they think, and other parts of the overall analysis take over in importance.I remember looking at Naibu too and, for a while investing. To be fair, one large investor, Simon Cawkwell was prepared to go long on the view that it was either the cheapest stock in London or a fraud. At least he understood the risks but few others did and I do not think IC did either.Look at Naibu's admissions statements to the stock exchange. Their initial proposal was to raise ten times the amount they ended up actually raising. The listing price valued the company on a low PE and, despite the obvious value there (!) seed investors apparently could not wait to sell down their stock, as they continued doing. In the absence of any large buyers the share price could go only one way and I think there was a short break in the vertiginous falls only because SC bought a large chunk of stock. The dividend was mostly paid as shares - which in one sense is fine - but at the low share prices I calculated that after five or six years the dilution would have been 50%! That is not enhancing shareholder value IMO. Hardly any cash was ever paid out. Moreover, consider both Chinese exchange controls - which means the seed investors have effectively used Naibu's listing in order to get money they invested in China out to the UK by selling their shiny new AIM shares, and that under Chinese law company assets could not be transferred abroad and you have a listing made for dubious reasons and shareholders who do not actually own anything, even if it does exist.None of this, as far as I remember, ever featured in IC's pieces on NBU because, like quite a lot of people here, they were obsessed with the numbers and did not think more widely. Yet all this was critical and pointed clearly to the conclusion that the shares should be avoided. Then finally take the company progress: e.g. the factory that was never successfully built and the wider AIM market which, in general, does not prize or "out" value but is just a repository for over emotional and over leveraged "hot" money chasing the next big thing and there was just never any reason to think the shares would re rate even if the company turned out to be genuine. Again silence from IC on these matters. This is not to say IC is useless. It's work can sometimes form part of an investment decision and, of course, many of their tips come good. But I think they misunderstand AIM, they do not understand China, they did not look at NBU's listing process or price or wonder in any thoughtful way why seed investors might be selling and they never sit back and consider whether a company might just make up the numbers. What are the penalties and what can shareholders expect to gain if the worst happens? With directors based in China can AIM realistically have any oversight at all..... especially if, as it turns out, the UK based non executives never actua
zulu principle2
11 Aug 2015
Re: Where's Simon Thompson (Investor's C... you invested the money, take responsibility for your actions and lack of research
trickler
11 Aug 2015
Here is another question The stock returns/compensation story is preposterous. A fraud has obviously occurred here. Do SFO,FCA or anyone else investigate AIM frauds whether based in UK or elsewhere or is this another case where PI's have just to accept that they have been cheated and there's nothing anyone can do about it?tclr
Orchard Gate
11 Aug 2015
Re: here is a question I'll relate my own experience: I read a ST article on Naibu in which the investment thesis was broadly "it's trading at a massive discount to NAV and cash balances to invest £1 and you're getting £2 of asset backing".Now call me cynical but when I see that I don't think "Oh what a bargain" I think "So the NAV is overstated or even fictitious". So I spent about 15 minutes looking at the DS research, the web site and the accounts and concluded that it was almost certainly a fraud. In part because having done business in China and with large Chinese companies I know that they don't think of lying to stupid white people or taking their money as being wrong.Now if I worked this out in a few minutes how come ST who is paid to do this continued recommending Naibu and ScamKids (and Polo for that matter) for many, many more months?So here's a clue (sorry this is turning into an essay). More recently he wrote about a Jersey based company which provides pension services to HNWI. It is being prosecuted for serious regulatory failings which ST claimed had no relevance to his investment case. I was shocked by such a stupid statement and actually took to the IC web site and said this "to his face" as it were. But while doing so I noticed something odd: much of his article, setting out the merits of this company was lifted word for word from press releases issued by that company. Now I think we expect any journalist to report objectively and honestly and not reproduce corporate press releases as if their own work.So the conclusion I drew from this sorry episode is that at best ST is incredibly lazy (passing off press releases as if they are genuine journalism) and naïve (just accepting claims by dodgy companies like naibu, ScamKids and Polo as if they are gospel) or there is something more sinister (and can I use the word corrupt without being sued) going on. Either way, I'd avoid his recommendations almost as much as those from Loadsadosh.
TX2
11 Aug 2015
Re: here is a question With difficulty I did find a few pictures of rather "down & out" Naibu branded shops on Chinese search engines looking rather different from the mock ups in Naibu's publicity and some evidence of product but all rather different from that officially portrayed.Actually I was a shareholder in Naibu for a short time not directly on Simon's tip;but because on favourable analysis in Investors Chronicle company reports I speculated that it might be one of the companies chosen for ST's smallcap annual tips and bought on that basis. It was only later when I looked at the company in more detail;or more correctly could n't look at the company as there was little to look at,that the penny dropped that something was seriously wrong and sold,at a modest profit,I gave my opinions here both on purchase and my later concerns.A couple of years ago the "China fraud" was not known about.I can understand how at the time of his initial tip Simon T was duped by the false accounts but find it rather odd that he failed to appreciate the true facts for such a long time.I am quite sure there was absolutely no improper behaviour on his part,generally his record is well above average on my observation, perhaps a reluctance by the IC to be too "direct" in their statements about rogue companies.
LoadsaDosh2
11 Aug 2015
Re: here is a question In NBU's case I'm not sure now that a business even existed. Doesn't anyone perform some due dilligence on these crooks before letting them list on aim or is it all champagne and smoked salmon for the brokers who don't look too closely and are only interested in their fees?
TX2
11 Aug 2015
Re: here is a question The possibility or even probability is that Camkids may be returning fictitious money for fictitious stock which is then pretended to be given away or sold for a trivial amount in order to make the future balance sheet resemble Camkids actual financial position that always existed.In other words a business with little or no net cash or even net assets,much more modest sales and very limited or no profitability.Businesses like Naibu & Camkids certainly exist;but it appears in real life they did not resemble the business shown in their accounts.The probability must be that many of these businesses are essentially share selling scams.Not unique to China of course;that is exactly what Quindell was;the business existed but was "bigged" up by false accounting and recklessly wild business claims given in updates.While in the end it will collapse back to reality in the short term related parties can dump over priced shares obtained,in Quindells case, by selling overvalued business to the listed company;but this can happen if the overvalued businesses are sold before listing because it is probably easier to cook the books at least for foreign facing businesses in China.
LoadsaDosh2
11 Aug 2015
Re: here is a question I don't think it's worth the effort of trying to make sense of the figures; they are most likely just spinning a story, most likely fictitious, (or if not then they must be in cohorts with the distributors to rob shareholders of value), to explain why there is no money left in the company.
one4all
11 Aug 2015
here is a question if turnover for the year is 1000mill rmb and those distributors who represent 17% of the company's revenues that makes 170mill rmb, how come they get 280mill rmb repaid?? also if CAMK have been giving 120 day credit then the stock that they are repaying for is nearly two years old. sitting in a warehouse,,,,,, seriously????
LoadsaDosh2
11 Aug 2015
Re: Where's Simon Thompson (Investor's C... "a fallin chart=fraud...dont think so..anyhows the machine BANG ON!!..bit of a bounce here.. "Got that wrong didn't you Lamboughini Girl?
LoadsaDosh2
11 Aug 2015
Re: Simon Thompson Actually voted you up (again) OG though you don't deserve it you old sour puss; I agree ST should be hung drawn and quartered. I got out of here at 24p thank goodness. I guess that leaves China Chaintek and Auhua Clean energy as other possible/probably scams. Still don't understand how the City can turn a blind eye to all this; perhaps they are all just corrupt, money grapping bankers and chavs now and no honour amongst them.
Orchard Gate
11 Aug 2015
Simon Thompson I do think ST who writes for the FT should face the music on CamKids.Despite the fact that he claimed Naibu had a large cash pile while many (myself included) were pointing out it was most like a fraud, and despite the fact this was indeed the case and the company had no cash, despite all of this he was still writing articles earlier this year claiming CamKids had a huge cash pile.For example in April he claimed the share price had "been kicked despite sitting on 55p a share of net cash at the end of 2014, and taking a more conservative approach to its expansions plans" and made a big thing of "Camkids' year-end cash pile of £42.6m."Now he is either unbelievably naïve and incapable of learning from past events or there's something more going on with him and some of these shares.
TX2
10 Aug 2015
Re: This dog LOL!I wondered how scamkids would manage to get rid of the cash supposed to be on its balance sheet.The buyback of stock is a truly "novel" solution!As always if you see the name Allenby Capital as nominated advisor,no further research into a company is required,just run a mile.....
Orchard Gate
10 Aug 2015
Re: This dog "eventually reality will kick in and this will be 120p+" LoadsaDosh2 29 July 2014What an utter more on.
Orchard Gate
10 Aug 2015
Re: so here is the scam at last Well, I did say some time ago that this was clearly a fraud and now, as you say, the scam is finally exposed with a series of laughable excuses - including giving inventory away to poor people - for why the supposed cash pile (which for the avoidance of doubt never existed) has suddenly disappeared. As one well-known blogger has stated "There’s no unnecessary land being purchased or factory being built this time. Camkids is showing Fujian province and its AIM investors another way to explain the disappearance of money that was never there in the first place! It might have existed in the annual report but it was just imaginary money. Now it's gone, there is no need to pretend any more.All those !diot$, sorry readers of the Investors Chronicle, who bought because they thought they were buying at a huge discount to cash, you were had!"
