Fuqi International (FUQI)

Follow-up to previous post. Thanks to Bobb who asked a very good question. Since the statistical evidence is "on average," (for example, CSIQ, MPEL, and XFML are Chinese ADRs that have had negative returns in a two month period) it's very important to allocate the total capital on this strategy among a few Chinese ADR IPOs. The last ADR to debut in October is Fuqi International (FUQI).

-It is expected to debut for public trading on the week of Oct. 22, at around $7-$9 a share.

-Incorporated on September 3, 2004, formerly, it is a designer of precious metal jewelry in China, developing, promoting, and selling a range of products in the Chinese luxury goods market. The Company’s products consist of a range of styles and designs made from precious metals, such as platinum, gold, and Karat gold (K-gold), as well as diamonds and other precious stones. Fuqi’s design database presently contains over 20,000 products.

-It is seeking to raise around $53 million dollars to expand its businesses and purchase more inventory (gold, platinum, etc) and claims that it has to turn away customers at this point because investing in inventory is very capital intensive.

-View its roadshow here: http://www.retailroadshow.com/links/show.asp?c=IPOHFUQi

-View SEC filings here: http://www.sec.gov/cgi-bin/browse-edgar?company=FuqiInternational&action=getcompany

Remember that this strategy is a stat arb strategy, so that while I have very little fundamental conviction that in the long run these companies will succeed, statistics show that historically over two months Chinese ADRs have been a good investment this past year.