Thursday, September 04, 2008

Houlihan Smith Touts ChinaMed Group

Houlihan Smith is letting the world know that it picked up the ChinaMed Group Account. They will now attempt to raise equity financing for the firm. Ok so what’s wrong with that? Company needs equity. Wheeler dealer types agree to find equity for probably a big fat fee. Press release strokes the executive ego and so on.

Read the press release carefully. ChinaMed has not come to the market as yet with a prospectus or any offering document. SEC has not yet seen anything so we are not in the regulatory zone.


Houlihan Smith is already saying things about the investment which will lead investors to qualitative judgements about the investment such as
1. The management group is established and dynamic. But no information is provided about the management group.
2. ChinaMed Group plans to buy 10 to 15 hospitals in main land China. Therefore it would sound like they have nothing right now. But the growth rate will be spectacular. Therefore the investor looking for hot stocks should pay attention. Hmm
3. Doctors typically stay with one hospital and are paid on seniority. Inputed message is that this is better than US hospitals. Whatever happened to containing costs.
4. Chinese hospitals do not need to provide the same level of non-reimbursable services as in the USA. China will manage its healthcare system as it sees fit. They still have a lot of communists over there.

So when would the promotion begin?