Here’s my simple advice for individual investors who’d like to do some due diligence on a Chinese company:
You may be able to trade ’em, but “investing” in them is masochistic. And don’t you ever in your life go believing a word they say. This may change, but right now exaggeration and fraud in many China stocks is a systemic thing – it is Clown College out there, Barnum & Bailey stuff.
So do yourself a huge favor – Don’t go to China to meet the company, don’t hire a translator to pore over filings, don’t “construct a fraud scenario”, don’t read about which hedge fund managers are also investors and don’t take part in message board discussions about who’s lying and who’s legit.
Don’t play no game that you can’t win.