Member Info for Slugworth

Yes, the company was more sensibly priced a few months back, but some recent issues have ruined sentiment and sent the SP plummeting. Whilst this is bad for those who were holding, the sell off appears to now be over. This has led to a great buying opportunity. Auhua shares currently trade on an extremely low forward PE of c.1.3x largely reflecting concern over the Chinese Economy and extremely bad publicity surrounding several Chinese companies quoted on AIM. Sentiment has been further undermined by the recent stock market crash in China and by the heavily discounted share placing in June 2015.  It is perhaps worth remembering that in 2008, many UK microcap businesses quoted on AIM experienced collapses in investor confidence and share prices because they were cash constrained at a time of deepening financial crisis. Whilst, some did not survive or moved back into private ownership, others went on to recover, generating extraordinary returns for investors over subsequent years. Auhua remains profitable, has good technology and has net cash approaching its market capitalisation. In our opinion, it has the potential to deliver to investors exceptional returns through a combination of growth and rating recovery.  Against this backdrop, we have set a 12-month target price of 20p representing a forward PE multiple of 6x 2015 earnings and an EV/EBITDA multiple of 2.5x. This equates to a potential more than four-fold increase in the share price from its current level.

I have been reading around about Crowe Clark Whitehill auditors and they seem to be very highly respected and professional. No cause for concern regarding the financials.

This has been trading at 25p+ for 3-4 years. Only recent issues have brought it so low. The background figures are still the same, and the company is in a period of rapid growth.

Those figures are Chinese Yuan - GBP profit is something like £4.6m (?? From memory) I think you need to do a little more research

SP was 4.4p at the time

This equates to a potential more than four-fold increase in the share price from its current level.

http://wh-ireland-co-uk.securesslhosting.co.uk/cms/upload_area/pdf/Auhua_initiation_16_04_15.pdf Auhua shares currently trade on an extremely low forward PE of c.1.3x largely reflecting concern over the Chinese Economy and extremely bad publicity surrounding several Chinese companies quoted on AIM. Sentiment has been further undermined by the recent stock market crash in China and by the heavily discounted share placing in June 2015.  It is perhaps worth remembering that in 2008, many UK microcap businesses quoted on AIM experienced collapses in investor confidence and share prices because they were cash constrained at a time of deepening financial crisis. Whilst, some did not survive or moved back into private ownership, others went on to recover, generating extraordinary returns for investors over subsequent years. Auhua remains profitable, has good technology and has net cash approaching its market capitalisation. In our opinion, it has the potential to deliver to investors exceptional returns through a combination of growth and rating recovery.  Against this backdrop, we have set a 12-month target price of 20p representing a forward PE multiple of 6x 2015 earnings and an EV/EBITDA multiple of 2.5x. This equates to a po

I was thinking the same. Possibly some hoping for a muted start on Tuesday so they can get in before the fun starts.

For those who say that perhaps this is not properly audited - Please see page 19 and 20. http://www.auhuacleanenergy.com/files/AUHUA-Annual-Report-2014.pdf

Ive worked for an industrial/plant company and can say the same. Nothing unusual about it. In fact most customers have a credit agreement of at least 60 days.

I have seen 180 days quoted in some circumstances, but given that we have been running for several years, it would make sense that we are already receiving monies from historical transactions. Also, that period is not attributable to all transactions, only some, believed to be larger customers.

It depends on the ratio to sales/revenue! Either way, it is monies owed to the company.

Worth a read for further information. http://wh-ireland-co-uk.securesslhosting.co.uk/cms/upload_area/pdf/Auhua_initiation_16_04_15.pdf

Refer to my 9.42

Why not just compare recent results with previous ones. You can see the increases in property, equipment, receivables, sales, etc etc etc etc etc. Shan, even after you convert RMB to GBP, the figures still point to considerable upside. And the only argument anyone seems to be able to offer is that 'Chinese companies are dodgy'

Regarding cash flow and liquidity - The company is going through a phase of rapid expansion, they are moving into Dubai, UAE, greater coverage of China, and plans to further expand in the global market. If you loo kat the full year results you will see they have spent about RMB15m on construction (new factories) in line with increasing yearly production values (from memory I believe they are currently at about 80,000 and targeting 150,00) Also, with increased sales, the admin costs also go up. The company was simply a little too bold during a time of economical difficulties amongst its own plans, and overspent. IMO money spent on growth is money well spent, and most of this translates to the companys NAV. (£25m ) As commy has said, we have been gathering some larger customers, and some of these have credit terms which lead to later payments 120-180 days. This has also had an impact on liquidity, but will stabilize over time. Look around, DYOR

Cant say I know much about them, but i'll take your word for it. Not everyone gets it right every time. You do a fair bit of 'ramping' yourself and I dont believe you always get it right either. The only concerns you have really raised are - they are chinese and other chinese companies have performed badly. Accounts might not be audited properly, or might be approved despite knowingly being fraudulent. RNS contained the word challenging, twice. (For the record, I think just about every company on the stock exchange will probably use the word challenging regarding the current economical climate) These are hardly compelling arguments. You cant see that this has been massively oversold? you cant see difference between SP and NAV? Where are those insights?

I think there HAVE BEEN genuine concerns, hence the fall from 30's to 3p. Those concerns have created a new buying opportunity. Graham - it doesnt say YET, but time is a perpetual thing. Just because something hasnt happened now, doesnt mean it cant even happen. It does confirm, just by its existence, that a take over is a real possibility

Just an example, and for the record, I hold WSG too. I dont follow you all day making notes on your investments. I just noticed that you are invested there, and some of your 'arguments' are unfounded and equally applicable to your own investments. If you can invest there despite those reasons, why cite them as reasons not to invest here?

Originally posted by Andysand http://www.smallcapnetwork.com/Auhua-Clean-Energy-ACE-Rose-20-on-50M-Dollar-Takeover-Rumours/s/via/49745/article/view/p/mid/1/id/1/#.VdwYn0FVSAc.twitter