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Articles: Bubble warnings

Concentration warning in Grand Concord (0844)
SFC, 4-Sep-2012
This follows a request by Webb-site to the SFC late on Fri-10-Aug-2012 for an investigation of ownership concentration. The snapshot date is the next trading day, 13-Aug-2012.

Concentration warning in Zall Development (2098)
SFC, 18-Oct-2011
This follows a complaint by Webb-site to the SFC on 3-Oct-2011.

Concentration warning in Tanrich (812)
SFC, 26-May-2011
This follows a complaint made to the SFC by Webb-site on 4-May-2011.

Concentration warning in Asia Commercial (0104)
SFC, 26-Oct-2010
We note that the Webb-site CCASS Analysis system shows that the top 10 accounts hold 94% of the stock in CCASS.

Manipulation mania
What are markets really for? Does the law on market manipulation, and its enforcement, create unreasonable expectations from investors about the information in market prices, volumes and order queues? We say it does. It is time for the Government and SFC to review their approach and reset public expectations. We also look at shill bidding in auctions. (12-Jul-2010)

Concentration warning in UURG (8192)
SFC, 26-Apr-2010
This follows our article of 25-Sep-09 which contained a bubble warning.

Imagi rights v shares gap
With Imagi's stock down 67.4% in 3 days since our bubble warning, the rights began trading this morning, at a huge discount to the share price, raising obvious questions of whether the market in either counter is false. If you own the shares and believe in the current valuation (which we don't) then why aren't you selling your shares and buying the rights to get free cash? (21-Apr-2010)

Imagi bubble
We issue a bubble warning on Imagi (0585), up 616% in 4 days on turnover of 185% of the company. The confusing timetable, with a 10:1 consolidation yet to come, has likely contributed to more chaos than we have seen since Asian Citrus. The market price implies a valuation of 33.2 times book value, or a premium of HK$17.3bn (US$2.23bn). We think a discount would be more appropriate, for the characters involved. (14-Apr-2010)

Larvotto - do you know the boatyard?
We probe the history of the SHKP/Kerry/Paliburg Larvotto, a luxury industrial-cum-residential project overlooking a typhoon shelter but behind boatyards and sawmills, which are noisy enough for the Environmental Protection Department to object to the Town Planning Board's approval, as minutes reveal. "Non-openable windows" were cited as a mitigating measure. Yours for just HK$25k/psf - can you see the bubble? (3-Mar-2010)

Concentration warning in Bloomage BioTec (0963)
SFC, 8-Feb-2010
This follows a request by Webb-site.com to the SFC on 18-Jan-10 for an ownership investigation.

Concentration warning in Vitar (0195)
SFC, 3-Feb-2010
This follows a request by Webb-site.com to the SFC on 22-Jan-10 for an ownership investigation.

Concentration warning in Fong's Industries (0641)
SFC, 12-Jan-2010
This follows a complaint by Webb-site.com to the SFC on 1-Dec-09 about likely concentration of the stock.

Concentration warning in Thinsoft (8096)
SFC, 23-Dec-2009
We told you so - see our article of 11-Dec-09. Now why doesn't the SFC have a screening system that notices these things before we do?

Thinsoft's thin ice
There's a bubble in Thinsoft (8096), suspended with a market value of HK$1,604m and net assets of $33m. Over 95% of the company is in the custody of 2 brokers. We also discuss the archaic practice of parallel trading, which was to have been abolished in 2008. HKEx appears to have given up on that. (11-Dec-2009)

China Strategic bubble
We warn investors of a bubble in the stock of China Strategic, the 80% owner of the proposed buyer of Taiwan's Nan Shan Life Insurance, partly financed by a massive note issue convertible into 78bn shares at $0.10 each. We publish the placing list and analyse the names in the deal. Finally, we warn investors to avoid 7 companies in the "Chung Nam network", which has lost HK$6.2bn in 5 years. (13-Nov-2009)

Concentration warning in iOne (982), controlled by Wilson Pong Wai San
SFC, 13-Oct-2009
This follows a request by Webb-site.com to the SFC on 4-Sep-09 for a concentration investigation.

The UURG to Purge
We look at the history of UURG (8192), currently controlled by battle-of-wills feng shui man Tony Chan Chun Chuen, and warn investors about the bubble surrounding the stock, which is trading at 191 times diluted NAV. (25-Sep-2009)

Incredibubble!
What else can you call a US$3.2tn market which has gained 358% in 20 months and trades on a historic P/E of over 60, which is probably closer to 80-100 if you take out stock-market and real-estate revaluations from "E". We look at the bubble, the impact on HK, the thru-train, the calls in HK for an A-H arbitrage mechanism, and how the bursting may affect the socio-political system. The absence of a free media is itself contributing to the bubble. (16-Sep-2007)

Bubble warning: CFII (1227)
Webb-site.com warns investors to avoid China Financial Industry Investment Fund Ltd (1227), a closed-end investment company trading at over 28 times its net asset value. We also find a surprising addition to the ranks of its independent directors. (13-Jul-2007)

B&B and Aptus
We issue a Webb-site.com "bubble rap" warning on Aptus (8212) and its parent B&B (8156). Aptus claims to have a deal with an arm of CNPC, parent of PetroChina, which apparently needs tiny GEM companies to help finance its mainland oilfields, while B&B, a honey trader, has bought a ticket in the mainland lottery which we expect will give you a worse return than the Mark Six if you buy the stock. We also take a close look at the financial engineering behind all this. (22-May-2006)

Stir-Fried Lobster
We issue a bubble warning on Hon Po Group (Lobster King) (0228), and dig into the background to its apparent transformation into the next big thing, coal mining in Inner Mongolia. (19-Apr-2006)

Bubble Rap: Kanstar
We renew our bubble warning on Kanstar Environmental Paper Products (8011), which is trading on a price/book ratio of 23.5 and barely made a profit last year. (24-Mar-2006)

Seapower and Galileo Bubbles
Webb-site.com issues two bubble warnings - a billion-dollar bubble at Seapower Resources (0269) and another, smaller one at Galileo Capital (8029), which unlike its namesake, defies gravity. (9-May-2005)

Kamboat and CITIC 21CN bubbles
We issue a bubble warning on stocks of Chinese restaurant and bakery firm Kamboat (0318) and mainland SMS/IVRS play CITIC21CN (0241). (23-Mar-2005)

Kanstar Won't Star
We issue a bubble warning on Kanstar - a company run by the son of convicted former legislator Chim Pui Chung, which is trading at 29 times net assets and has yet to make an annual profit. We also take a look at Chim's comeback campaign and his other listed investments. (10-Aug-2004)

Guo Xin Toxin
In a follow-up to our story on the Interchina bubble, we tell you about Guo Xin Holdings, which is controlled by the same man after he bailed it out of difficulties. Guo Xin is trading in a bubble of 7x net assets, and Mr Zhang has already dumped stock and got his money back and $129m cash on top, while holding shares and warrants currently priced at $491m. You have been warned. (29-May-2002)

MSCI Boils the Interchina Bubble
Oh dear - it seems like the index compilers in Geneva don't read Webb-site.com - they have just put Interchina Holdings into the MSCI Small-cap Index, despite the clear warning from SFC investigations and our previous article that the stock has been cornered and ramped. Now this property stock is trading at over 7.5x net tangible assets instead of the discount to NTA it deserves. (16-May-2002)

Interchina Bubble
Pop quiz: what's the largest stock in the Hang Seng Small-cap Index? It's mainland property investor Interchina Holdings Ltd - at HK$7.11bn (US$912m). But not for long, we think. At 16.4x net asset value, this stock shows classic signs of being manipulated, and the SFC has investigated twice - you have been warned. (23-Oct-2001)

End of The Equity Spiral
We look in detail at last week's announcement of the proposed acquisition by Pacific Century CyberWorks of Cable & Wireless HKT. The issue of inflated shares in the deal will raise our valuation per share, but PCCW is now so big that the equity spiral is over, and there's a gap of US$44bn of hope or hype in the price. Read our detailed evaluation and discover the key "crossover" point between the two offers. (5-Mar-2000)

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