China Recycling Energy (CREG US)

China Recycling Energy Corporation is engaged in the recycling energy business, providing energy savings and recycling products and services.

Their shares rose from $4.65 in Jun 2009 to $57.3 on 19 Mar 2010.

The group hired Deloitte as their auditor in May 2009, but turned back to previous auditor GPKM only 3 months later. Deloitte raised points on 5 technical areas of potential misstatements, and CREG restated its results for 2008 and Q1 2019 in Sep 2009, “with a completely clean opinion” from GPKM. A few months later, the share price tumbled to $29.10, losing half of its value in just over one month.

The shares rose to $50.3 on 24 Mar 2014 after announcement of strong results and new projects. It quickly went back down to $24 in June, then on 24 June, dropped 30% to $16.7 in a day. The company claimed that “it is not aware of any material corporate developments … that could account for the recent unusual trading activity in its shares”.The stock price dropped further when Carlyle Asia Growth Partners (CAGP), a 10% shareholder, looked to exit its position while another major shareholder registered to sell 14% of outstanding shares through an S3/A filing that became effective on June 19, 2014.

Since then, the share price has gone down to $1 in 2017, and is currently trading at $1.3.

 

China Recycling Energy: 2011 Annual Report, 22 Mar 2012

Reuters: INSIGHT-More red flags for Carlyle’s China portfolio, 25 Jul 2010

PR Newswire: China Recycling Energy Corp. Completes Full Year 2008 and Q1 2009 Non-Cash Restatements and Reaffirms Full Year 2009 Guidance, 29 Sep 2009

PR Newswire: CREG Chairman & CEO Assures All Aspects of Business Operation Are Normal, 25 Jun 2014

Seeking Alpha: 2 Large Shareholders Appear Ready To Dump Shares Of China Recycling Energy, 27 Jun 2014

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