Yesterday, China Sun Group High Tech Co. (OTC:CSGH) made a new record 52-week low after plunging down 15% to $0.4. The price crash happened on a significantly higher than the daily average volume of 315 thousand shares. This means that yesterday nearly half of the total outstanding shares were turned over as the company has reported a total of 722 thousand shares of its common stock.
What is strange in the case of CSGH is the serious price decline, which has befallen its stock ever since the beginning of this year. CSGH stepped into 2011 with a share price of $1.1 and now, six months later, it has lost a serious amount of its stock value.
The fate of CSGH stock completely contradicts its reported financial status. According to the last 10-Q, CSGH has many financial achievements that are not typical for the penny stock market, such as:
- $25.4 million in cash.
- A current ratio of more than 25; no long-term debt.
- $2.6 million net income and $6.6 million cash flow from operating activities.
- And on the top of this, the company has a market cap of only $300 thousand.[BANNER]
However, it is this outstanding financial report which might give a clue why a Chinese company such as CSGH is constantly losing investors interest. The fact is, that the reported financial state of CSGH might sound too good to be true for many investors who have been witnessing a couple of delistings of Chinese companies since the start of the year.
Many of these companies were delisted because of “cooking the books” and maybe this is the reason why investors approach these companies with caution, especially on the OTC and pink sheets market.
In this regard, it is difficult to predict what will happen with CSGH stock and if it will be able to stop the relentless downhill roll. Therefore, CSGH might continue to be attractive only to the speculative players with high risk tolerance.
