You can’t make this stuff up..

A company this cheap, can it get any more crazy?

Fuqi International, a Chinese jewlery designer, manufacturer, wholesaler and increasingly retailer:

  • is depending completely on the growth of the Chinese domestic market. It has no exposure to other economies, zero.
  • The Chinese economy as a whole is growing at 10% a year while the retail sector is growing considerably faster than that. It’s one of the few parts of the world economy that shows healthy growth..
  • It might be that the Chinese authorities are stepping off the gas a little, but the Chinese growth story is not in danger
  • It now has a 2010 p/e of 7, while it has grown in excess (and often far in excess) of 20% each year
  • It has almost no debt
  • It has some $6 in cash per share, or more than 1/3 of the stock price
  • Technically, it’s oversold with an RSI of 27
  • We wrote a large piece on it last December using several research reports from Wallstreet analysts
  • It’s down another $3-4 since then, but the valuation is getting ever more ridiculous.

2 thoughts on “You can’t make this stuff up..”

  1. What’s more frustrating than FUQI getting torn part and devoured by the shorts is your irrelevant pumping and inability to explain any cause whatsoever for this terribly managed company. The managment is one of the worst I have even encountered in releasing any positive PR to reassure the investments. I guess the chief officers are pretty comfortable with the tremendous increase in share values from a few years ago and could care the least about those who bought the stock on false hype

  2. Pumping? That would be if we argued something that isn’t true, right?
    Management has (in the latest quarterly cc) increased it’s guidance for the last quarter. We suppose if they don’t say anything, they still stand by that, so what else could they say? The sell-off is hardly FUQI specific, all these Chinese small-caps we’re looking at are selling off heavily (fear that China will step off the accelerator). Creates a heck of a buying opportunity, that’s all we like to point out.

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