RE: Relax Thanks for the post my friend. You're exactly right. I did, in fact, know this to be the fact but was frustrated by the management's response to this particular question. Remember, they are under close scrutiny since the various questionable practices of Chinese Corporations have come to light and they really ought to establish trust with potential investors.
This is evidenced by the fact that the stock appears to be unusually cheap. It's very much like the market has presupposed fraudulent activity and does not trust the numbers being reported. I would have been very pleased if they had declared a small dividend (perhaps 1-1.5 cents per quarter (4-6 cents a year)) which would have shown confidence in their ability to generate profits on a sustainable basis. Migao did that and has gained some stability in its share price. I would be happy to wait for the market to realize the true value of this company if I was being compensated for my patience in the meantime.
Interestingly, Cannacord Genuity has issued a sell rating on the stock with a $1.45 target. From my experience, however, their track record has been quite poor.