Like all China based companies, the accounting fraud issue is a real concern. XingQuan is known for its low dividend payout, which is only 10-20% of PAT. For such a cash-rich company, this makes investors puzzled. Perhaps China-man are all "kiam siap"? In Aug 2011, it even proposed new issue of security to raise more fund. Money not enough? From XingQuan's most recent quarterly report, it has cash of RM400mil and bank borrowing of only RM38mil!
With the current share price, XingQuan's PER is well below 2. Cheap isn't it?
With such a sharp fall, I think its share price will rebound to some extent, and may continue to drop if bad news emerge. Speculators may want to catch this falling knife, but don't catch the blade and hurt yourself. Timing is key.
Anyway, what is the actual reason for its recent drop?