Seeking 'Legitimate' Value in China Small Cap China Longwei Petroleum

Tyler Peglow submits:

News for the aggregate Chinese small cap sector couldnt get much worse. On March 11, 2011, shares of China Media Express Holdings (CCME) were halted on account of "pending news" regarding accusations the company has been misstating revenue and earnings. CCME use to be the underground "darling" of sophisticated individual investors in small cap China because of its reported cheap valuation, boasted a top 4 auditor (Deloitte), the CFO (Jacky Lam) had made a recent "market" purchase of $1.5 million dollars of stock, and CCME had the financial backing in the form a $13.5 million dollar equity investment by the fund (Starr International CO.) ran by ex-Wall Street Titan Hank Greenberg. CCME was "reportedly" growing its business on the top and bottom line 30-40% and was trading for 5 or 6 times earnings.

That all changed when on January 30 Citron Research issued a report detailing accusations that CCME was


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