(Aug. 31, 2009 - Chinavestor) Sinovac (AMEX:SVA), this small cap Chinese vaccine maker, jumped $3.39 or a staggering 53.64% today. Underlying volume was unusually high, over twenty times more than in August 2009. Such an incredible performance is not justified by 2009 Q2 earnings. Far from it. As a seasoned stock analyst myself, I'm puzzled and somewhat confused by trying to make sense of such financial statement. It has all sort of unusual items, stock based compensations, non-controlling interest items on balance sheet etc. My gut feeling is tells me it's a sham and don't buy it. I may be wrong - but at least I warned you.
My personal encounter with Sinovac (AMEX:SVA) dates back to 2005 when I got to meet Mr. Weidong Yin, President and CEO of the Company, at an investors' conference in NYC. I sat down with him one on one and got to know more about this company. From that moment on it was always riding on potential - not on actual earnings. Actually I found it very unfortunate that U.S. investors kept buying his story and kept Sinovac afloat by underwriting a never-ending amount of new additional shares. Most of it went to Mr. Yin and his management team in the form of "stock based compensation". I remember, Sinovac (AMEX:SVA) spent more on stock based compensation at one point that on any other item on the income statement!
I don't know what the latest buzz is. But I'm highly suspicious about this company and raise a huge red flag.
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