Initiation: December 14, 2017
J Capital Research ("J Cap") is an investment advisor to private funds. J Cap has analyzed the U.S.-listed company Yangtze Port and Logistics Group (“YRIV”) and is hereby publishing the outcome and the conclusions of our analysis, based on publicly available information. Some of our clients may be short shares of YIRV, and, for this reason, there might be a conflict of interest.
Sign of the times
Fraudulent companies have frequently taken advantage of reverse mergers, business scope redefinitions, and
promotional announcements to raise money from U.S. retail investors. But the last year has seen some such companies swell their value to billions of dollars without any actual development in their business or even realistic prospects.
Track the fads
YRIV is in many ways a barometer of irrational exuberance. Its share price has bobbed up and down with its clever promotion of investor enticements like the “Belt and Road Initiative” and “Blockchain.” In
the manner of tilting Olympic ice racers, the company attaches to the draft of extremely hot equity fads.
A life boat in a tidal wave of debt
The reason YRIV is listed is the same as that for its predecessor company, a developer from Hebei Province: the company took on too much debt when China’s property markets were surging, and now it is desperately searching for ways to recover cash, and more than stay alive, make a bundle themselves before disappearing from regulator radar. This suggests yet another way in which China’s debt problems inevitably slop over into other markets.