Breno,
There's no such thing as a risk free investment but I've studied the numbers and they make sense to me.
More importantly they make sense to Goldman Sachs too, which is now represented on the board of Sino Grandness.
The chairman owns almost half the shares in the company. Also note that in its IPO in November 2009, it IPOed at 29 cents (significantly below current share price) and raised only $16.9 million, which is even less than its net profit in last quarter alone.
Instead of cashing out of the IPO, chairman Huang Yupeng has actually repeatedly purchased more Sino Grandness shares at between 48.5 cents to 50 cents, significantly higher than IPO price, showing you that he wasn't just using the IPO to cash out, unlike some other companies out there.
Again, no such thing as a risk free investment. You got to take your bets. I've taken mine. But be nimble and quick to react if things don't go according to plan.
Well I'm up over 50% on Sino Grandness, and about 33% on China Minzhong - all this while the Shanghai Composite is still at depressed valuations.
Another big positive, however, is that the Shanghai Composite has looked like it's been regaining signs of life in recent weeks, while the local s-chip index (FT ST China Index) has crept up from below 220 to 237. This index would be trading at 300+ to 400+ during less bearish times - in fact during the last Chinese bull market I believe this index reached as high as 600-700.
So if this is a recovery (hopefully) in Chinese stocks, it's only just the beginning.
My gf got worried when she received CDP mail saying her Sino Grandness shares have been loaned out under Securities Lending scheme. She got worrried cos this implies the borrower of the shares is shorting the stock. Like that how? When the loan was made, the stock price was in the 50s, now in the 60s, the borrower kena whacked big time. But what if .....?
Bro chill man, there are longists and shortists for almost every stock out there just as there are buyers and sellers everyday. That's the market for you. One shortist means nothing amongst millions of buyers and sellers out there.