A mainland China friend of mine from the vicinity of Fujian Province, where the HQ and factories of Xing Quan is situated, has some mutual friends working in both the offices and factories of Xinquan.

He was told that some new foreigner visitors have been seen in the office of the Executive Chairman of Xinquan, Wu Qingquan for a few days in October and again with a bigger entourage in early November 2014. Words have been circulating in the company that Wu Qingquan is looking to an outright disposal of his family's controlling stakes in Xinquan for an amount yet to be known but under RM1.

If Wu Qingquan is indeed looking to divest his stakes in Xinquan at the prevailing market price or even at higher prices, I find it very strange to accept that given the 'rosy fundamentals' of Xinquan, ie NTA of RM 2.83 and EPS of 11 sen based on the Q1/2015 http://www.bursamalaysia.com/market/listed-companies/company-announcements/1798809 , he is willing to part with his Xinquan stakes at a steep and depressed price of under RM1, given the fact that the cash hoarding alone is closed to a cool RMB 1,234 million, that is Ringgit Malaysia RM 617m in cash  or RM 1.85 cash per share!

Something somewhere must have gone terribly wrong with the book or the business of Xinquan that warrants or prompted Wu Qingquan to come to a decision to "get-out" of Xinquan (I can't say it is a cash-out because nowhere on earth that someone will sell this company with a cash backing alone of RM 1.83 per share yet selling it for penny!), unless he knew fully well that the cash is simply not there ! Or something even more shocking within Xinquan that has yet to unfold or be known to the public !

The Malaysian investing public would have learnt the painful lessons from the like of HBGLOB or CSL on how fast the books of these China-based listed issuers can deteriot, and there is no stopping that Xinquan will not happen likewise, given the stock market reaction to its shares price of only under $0.40 now.

Be that as it may, until my friend come forward with some facts or evidence on the potential selling out news by the major shareholder of Xinquan, I will take this information with a pinch of salt. 

I have known this China friend of mine for many years now as a man of strict word, and to a certain degree, I must admit that I believed to what he had told me. He promised to produce some evidence soon. Until this selling out information is confirmed, please trade with extra care with Xinquan.

Buy and sell at your own risks!

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