China BAK Battery, Inc. (NASDAQ:CBAK)

CAPS Rating: 1 out of 5

Engaged in the manufacture, commercialization & distribution of a variety of standard & customized lithium ion rechargeable batteries for use in cellular telephones, as well as various other portable electronic & general industrial applications.

Recs

3
Player Avatar uptownman68 (87.25) Submitted: 4/17/2007 2:30:19 PM : Underperform Start Price: $3.55 CBAK Score: +58.40

This company may perform reasonably better in the near term but there are a number of things to be nervous about that caused me to sell. For one there always seems to be key trading ahead of good news and bad. If you buy this stock chances are that it will make a big move ahead of your ability sell. Second, this company clearly has some accounting issues. so much so that they are now on their third auditor in the last year. If you bothered to read the 8-k instead of just reading the rather benign press release you got a glimpse at those problems. KPMG was basically saying that they have a lack of accounting experience and financial controls. As a result while there were not disagreements over previous filings they did acknowledge that CBAK is not properly accounting for certain expenses and that the financial reports are not reliable. The management team rather than bring in people with understanding of accounting and correct the issues fired its auditor.

Member Avatar PIGMA (27.67) Submitted: 10/5/2007 2:09:22 PM
Recs: 0

It is true they have accounting problems, but they have admited to those problems and taken steps to correct them. They recently hired a U.S. accountant and have implmented a GAAP training program. This company is still extremely risky and volatile. They have a mountain of short term debt and bad earnigs. However, they have a great product and are in a great industry. If they can stabalize their earnings and clean up their accounting issues this stock will soar.

In conclusion, a risky Long term play. thumbs up

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