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Strategies & Market Trends : Value Investing
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To: MCsweet who wrote (44733)10/1/2011 5:41:50 PM
From: Spekulatius4 Recommendations  Read Replies (2) of 78670
 
I looked at CCM briefly - the company is expanding fiercly, revenues went from 76M RMB to 350M RMB. Property and equipment as well as Sharecount are expanding even faster than revenues (Sharecount: 17M (2007)---> 49M (2010)). My take is the dividend is payed for by share issues

Star (CV) isthe largest shareholder and is a Maurcie Greenberg vehicle and GE is also a significant shareholder (I presume they buy some of their equipment) Both are no dummies and Maurice is an expert on China and serves on the board of several US hospitals.

Then on the other hands they own stock in scams like China Media holdings and China cord blood:
sec.gov

They also have some debt for which they are paying ~7% interest rates (despite having a lot of cash on their balance sheet which pays only 1.5%). This has been another indicator of fraud for Chinese companies. At least the interest rates earnings on their cash are somewhat believable.

I am staying away from this because I don't get the business expansion that is financed by issuing increasingly cheap stock. The dividend may just be there to dupe new shareholders in a Ponzi scheme. I don't think that Starr's holding means anything given their record with Chinese stock investments.
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