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Hacker group Anonymous short report....


libor.plus1
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So here's a new one...you know Anonymous, the hacker group that attacked Sony and a buncha other companies and stole information? Looks like they are doing short reports now?? They targeted some HK company called Chaoda, which I actually did some research on.

 

This is weird, but wow... can you imagine the consequences if they start doing this en mass? Black helicopters for the win..

 

http://www.zerohedge.com/news/anonymous-enters-securities-analysis-alleges-hong-kongs-hk-85-billion-chaoda-next-sino-forest#comments

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http://seekingalpha.com/article/259053-chaoda-modern-agriculture-a-green-giant-for-the-price-of-a-dwarf

 

Chaoda have been added to my watch list after I read this article back in March. There was a fraud allegation by Next magazine before this anonymous group . Information is very hard to obtain and verified so I didn't buy any . It is very hard to find an information about HK stocks in English .And the company financial report is only half-year basis.

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http://seekingalpha.com/article/259053-chaoda-modern-agriculture-a-green-giant-for-the-price-of-a-dwarf

 

Chaoda have been added to my watch list after I read this article back in March. There was a fraud allegation by Next magazine before this anonymous group . Information is very hard to obtain and verified so I didn't buy any . It is very hard to find an information about HK stocks in English .And the company financial report is only half-year basis.

 

No offense to you or the author of that article (what I'm about to say you'll probably find offensive), but that article was really really bad when it came out (and still). You gotta love articles which cover every single aspect of a company except the important ones. The whole question surrounding the company is one of fraud, and it wasn't mentioned once. This is like investing in Sino-Forest back in the summer and not knowing who Carson Block is.

 

The article actually makes some good points for the short side, unknowingly, and it had me literally laughing out loud, especially with lines like these:

 

Chaoda has consistently achieved net profit margins above 50% over the last decade – this is not something you would expect from a vegetable producer. Contrast that to the 2% net margin of Bonduelle.

 

...Chaoda’s produce is being sold at one-third of the price of even the cheapest fresh vegetable type in the US.

 

It (Choada) has been growing its production base and production like clockwork while maintaining an excellent yield on its production base.

 

Chaoda can be proud of its track record, as its harvest volume exceeds those of France and the U.S. by some margin.

 

And I am not only talking about the name of the company (Chaoda is written with the characters 超and 大 in Chinese which stand for “super” or “exceeding”, and “large”, thus giving it the meaning of “super-huge” or “gigantic”). Chaoda’s operation is very impressive in the context of a fragmented agricultural base in China.

 

This reads like a sarcastic long-parody article by a short seller with a humorous side. Probably the most humorous quote from the article:

 

At 4 HKD and with 3.12bn shares in issue, the market values the company at 12.5bn HKD or 10.5bn RMB. That is a little more than half the book value (net assets) of the company, and only three times last year’s earnings and 1.5 times last year’s revenues (and remember the company has a 50% net margin!).

 

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I'm reading the comments and they are entertaining too. Like this one from someone named George Fisher,

 

Thanks for your work on this company. I personally am a bit shy of Chinese companies and only own TRE.TO, SNOFF.PK, SinoTimber, a Canadian based timber company that is the largest grower of trees in China. SNOFF is headquartered in Vancouver and abides by Canadian accounting and stock listing rules.

 

lol. Tough break for that guy. Why don't they all just wire their brokerage accounts to a Nigerian prince and get it over with?

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No problem Hester. I didn't buy any share so I didn't get burnt. I just looked into it because it was very cheap that time if it turn out to be legit.

 

It just happens time to time that investors got trapped in some opportunities that turn out to be a fraud. When valuation looks too cheap ,it is likely to be a fraud or in some other trouble. That's why we need a second thought when it comes to investing.  Mr Market is very smart these days.

 

Talking about SA, the article quality is deteriorating. I have not read any good article for a while.  Dr Clemens who wrote Chaoda's article is one of my favorite contributor in SA but he doesn't has any activity (comment ,blogging) for quite sometimes.  He might be gone as well. It is hard to keep publishing your investment idea when you failed badly in one idea. I will be sad to see him goes.

 

 

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No problem Hester. I didn't buy any share so I didn't get burnt. I just looked into it because it was very cheap that time if it turn out to be legit.

 

It just happens time to time that investors got trapped in some opportunities that turn out to be a fraud. When valuation looks too cheap ,it is likely to be a fraud or in some other trouble. That's why we need a second thought when it comes to investing.  Mr Market is very smart these days.

 

Talking about SA, the article quality is deteriorating. I have not read any good article for a while.  Dr Clemens who wrote Chaoda's article is one of my favorite contributor in SA but he doesn't has any activity (comment ,blogging) for quite sometimes.  He might be gone as well. It is hard to keep publishing your investment idea when you failed badly in one idea. I will be sad to see him goes.

 

Yeah I agree about SA quality deteriorating. I think it stems from when they started paying writers per 1,000 page views. The incentives for some became to publish articles that will get a lot of page views but not necessarily high quality content. You see a lot more "5 picks for 2011" and macro stuff than say, small value writeups now, because the former gets more page views.

 

Thanks for the link though I got a kick out of that..

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