xxx SKY China xxx

SKY China: A damning report has surfaced on Alfredlittle.com (which publishes long & short investment ideas focusing on China companies) on Sinotech Energy (Nasdaq: CTE), which may have links to SGX-listed SKY China.

CTE was listed in Nov 2010 & its IPO was underwritten by UBS & Lazard, both of whom recently have ‘Buy” ratings on the stock. It also has a “Big 4” auditor, E&Y. However, a thorough investigation of CTE (by the same research team that uncovered fraud at RINO, CGA, CBEH, SCEI and LFT) concludes that CTE, its largest customers & suppliers are likely nothing more than empty shells with little or no sales or income. This report shows:

1. CTE’s sole import agent accounting for >US$100m worth of oil drilling equipment orders appears to be an empty shell with no sign of operation, a limited import history & negligible revenue base.
2. CTE’s sole chemical supplier appears to be an empty shell, with little or no revenues, a deserted office & no signs of prodn activity.
3. Likewise, CTE’s 5 largest subcontracting customers, providing the vast majority of CTE’s revenues, appear to be shell companies with unverifiable operations & minimal revenues.
4. CTE’s oil drilling technology is questionable, mispriced & uncompetitive
5. CTE’s audited financial statements filed with Chinese Govt’s State Administration of Industry & Commerce (SAIC) further confirm its negligible business operations.
6. CTE’s board of directors lacks independence & effective oversight of mgmt, evidenced by undisclosed related party dealings
7. CTE stock is theoretically worth less than US$0.63 per share but investors will likely recover nothing.

According to the report, the majority shareholder & Chairman of CTE, Liu Qingzeng also happens to be the CEO of Spore-listed SKY China Petroleum Services, which is also involved in petro-engineering solutions to the oil & gas industry in PRC.

*Please note that the above is for pure information only. Kim Eng or KELive is unable to verify nor vouch for the accuracy of the Alfredlittle report. We will also not take any responsibility or liability for any misrepresentation found in the report.

http://alfredlittle.com/wp-content/uploads/2011/08/SinoTech-Energy-FINAL.pdf