Hav you considered this?, page-10

Hi Dancer,

Just something to be careful about - it's common with Chinese companies that the large cornerstone investors have close business relationships with the company. For example, often they are company suppliers or associates of the CEO etc.

If they sell all their position it doesn't prove anything's wrong, but there are cases where cornerstone Chinese investors sold shares in companies and prices continued to decline and stay low.

Another way to think of it is face is very important in Chinese business and it might be quite damaging for someone who likely has a close relationship with the business (otherwise they wouldn't let him/her take such a large chunk at $0.000001) to suddenly sell their whole position. It could just be an emotional seller, but maybe there's more to it...

The stock may appreciate if concerns around investor no.2 selling out turn out to be overblown/explainable (we can't tell if other cornerstone investors are selling as they are not substantial). In this case you would deserve to make a lot of money.

Don't get me wrong, with these financial metrics I'd ideally want to hold the stock also, but I'd rather watch for a few months to see how things pan out - I don't think there's any hurry to get in.


Henry Emmett