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from Form 10Q recent Q1 report.

(b) Use of estimates
 
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting periods.  Management makes these estimates using the best information available at the
time the estimates are made; however actual results could differ materially from those estimates.  
 

We have to assume the approximations are OK. I would like this stock to do well but you can't do enuff DD.

What would you say its P/E should be? About 7, I'd say. That's about $7-8 a share.

And who are the analysts who talk about a $15 target? Of the four analysts YUII list, two are in fact the same, and one is a HongKong Chinese name.

My take: this company is genuine but am I a part owner? I doubt it. At present I think I'll exit if it bumps up above about $7.5

Malc

I look forward to hearing your concerns.

Meanwhile, I did see the post where you mentioned shorting YUII.  However, I also saw that you thought the selling was "overdone" and implied later that the short position was just to take advantage of the trading action.  I don't mind the trading, but I would take issue with Geo's ethics in going short for fundamental reasons without letting paying members know ahead of Geo's staking out a position.  Sure, Geo is conflicted since it makes money trading ahead of releasing its research, but hey, members pay to stay ahead of the game, not behind it.

On that note, I'm curious where you see issues with YUII's filings.  Balance sheet?  Income statement?  Company structure / ownership issues?  OTG DD?  Appreciate you keeping us posted - I'll be watching on the premium boards as well. 

Fijas, we had mentioned that  we shorted some Yuhe Intl (OOTC:YUII) a while ago. IMHO, As it stands, there are enough red flags in the company's filings to raise questions. I plan to discuss in our Premium GeoBoards.

@Fijas: "Yamamoto wasn't paid out"  Agreed, I got that wrong. The $54m went to Zhentao as shares 'for services.' If a company pays X for services, that money is lost. Yuii showed this loss in its accounting last year. Is it as simple as there being 'a large insider holding'?

In any case, they talk about Vertical Integration in an April 2011 presentation (they use cartoons that avoid this loss we are discussing) and I fear they might next spend (their bank loan?) and cut unwisely profits for growth (I thought they paid over the top for their new farms, tho' hard to be sure).

But I am pleased if it's true that Primary Producers pay no income tax; it's odd they linked this to Cash Receipts.

Malc

Yamamoto wasn't paid out.  Nothing was paid.  You simply had a share transfer from Yamamoto to Zhentao, which was marked as share-based compensation (which ultimately flowed to retained earnings).  An equivalent amount was then added to additional paid-in capital such that shareholder equity remained unchanged.  In short, there was just movement from retained earnings to additional paid-in capital (which you can confirm by looking at the Qs at the back-half of 2010 compared to the most recent 10-K).

No income tax is paid because the company is a registered agricultural company.  These companies don't pay tax in China.

@Maj, if you think you know something about YUII that isn't public, please let us know.  I'm long the stock as I believe the stock has been made cheap by those concerned about these accounting number transfers, but I'd hate to be stuck if Geo is going short for reasons that aren't yet obvious to me.

We are still investigating the Yuhe Intl (OOTC:YUII) story.  There are numerous red flags and you just highlighted several of them.   We were hoping to have an update a while back, but there are more moving parts to this story that originally were not anticipated.

Thanks for this statement: ( I had not noticed it)

• I have presumed ( but without any certainty) that the money raised by the share sale 2010 was used for this, tho' they said it was to expand business.

I am also completely confused.

The recent Q1 report shows earnings rising steadily, period by period. But the use of $52m to pay out Yamamoto has now vanished from the balance sheet.

I have presumed ( but without any certainty) that the money raised by the share sale 2010 was used for this, tho' they said it was to expand business.

They boast that income is all cash (so how do you know what's come in?) and so no Income Tax is paid. How can you just duck paying tax? They can't seriously tell us that they have this great income and tell the tax office they don't.

Minor point: they keep adding "The Chinese New Year slows turnover, and income". China feasts for a week so how does that slow sales?

Malc

The shareholder equity increase was primarily due to Additional paid-in capital increase. This year's shares increased by about  5M. I am confused how these numbers would match, because even their highest stock price was $12, so even if they issued the new shares right around that price, they would only get $60M more shareholder equity. But with the burn of 33M, the equity should only increase by 27M.

I dont make targets, i just follow our price momentum technical analysis rules and let 

market take me out.  Until that time i just ride the momentum and let market decide how

high it wants to go.  Currently I am trading it using our Hugger Rules of Engagement.

~Power 

nice call,

Where do you see it heading?

I highlighted YUII a few weeks ago when it carved out a Week 1 Breakout w/in the POPower

technical profile.  Snce then it has been a 4 day hugger mode. 

This link will take you to my public weekly chart notes on YUII - http://j.mp/687SEJ

~Power