China Carbon Graphite Group risk analysis
China Carbon Graphite Group (CHGI) Risk Analysis
Risk Overview Q3, 2017
Source: the company's latest filing for the period ended Sep 30, 2017, filed Nov 14, 2017
Risk Change Over Time
No filing history is available.
Risk Highlights Q3, 2017
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 23
- Share Price & Shareholder Rights - Risk 1Fluctuation in the value of the RMB may have a material adverse effect on the value of our stock.
Fluctuations in the value of the RMB against the U.S. dollar and other currencies may be affected by, among other things, changes in China's political and economic conditions. On July 21, 2005, the Chinese government changed its decade-old policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMB is permitted to fluctuate within a narrow and managed range against a pool of certain foreign currencies. This change in policy has resulted in the appreciation of the RMB against the U.S. dollar. While the international reaction to the RMB revaluation has generally been positive, there remains significant international pressure on the Chinese government to adopt an even more flexible currency policy, which could result in further and more significant appreciation of the RMB against the U.S. dollar. Because approximately 90% of our costs and expenses are denominated in RMB, the revaluation in July 2005 and potential future revaluation has and could further increase our costs. In addition, as we rely entirely on dividends paid to us by our operating subsidiary, any significant devaluation of the RMB, which we have seen signs of in the last couple of years, may have a material adverse effect on our revenues and financial condition, and the value of, and any of our dividends payable on our ordinary shares in foreign currency.
- Share Price & Shareholder Rights - Risk 2It may be difficult for our stockholders to effect service of process against our subsidiaries and our officers and directors.
Our operating subsidiaries and substantially all of our assets are located outside of the United States. Investors may find it difficult to enforce their legal rights based on the civil liability provisions of U.S. federal securities laws against us in the courts of either the United States or the PRC and, even if civil judgments are obtained in courts of the United States, to enforce such judgments in the courts of the PRC. In addition, it is unclear whether extradition treaties in effect between the United States and the PRC would permit effective enforcement of criminal penalties under U.S. federal securities laws or otherwise against us or those of our officers and directors that reside outside of the United States.
- Share Price & Shareholder Rights - Risk 3There is a limited market for our common stock, which may make it difficult for holders of our common stock to sell their stock.
Our common stock trades on the OTC Markets under the symbol CHGI. There is a limited trading market for our common stock and at times there is no trading in our common stock. Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock. Further, many brokerage firms will not process transactions involving low price stocks, especially those that come within the definition of a "penny stock." If we cease to be quoted, holders of our common stock may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of our common stock, and the market value of our common stock would likely decline.
- Share Price & Shareholder Rights - Risk 4If a more active trading market for our common stock develops, the market price of our common stock is likely to be highly volatile and subject to wide fluctuations, and holders of our common stock may be unable to sell their shares at or above the price at which they were acquired.
The market price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including: - quarterly variations in our revenues and operating expenses;- developments in the financial markets and worldwide economies;- announcements of innovations or new products or services by us or our competitors;- announcements by the PRC government relating to regulations that govern our industry;- significant sales of our common stock or other securities in the open market;- variations in interest rates;- changes in the market valuations of other comparable companies; and - changes in accounting principles. In addition, the market for Chinese companies that went public in the U.S. through reverse mergers, such as ours, is currently extremely volatile primarily due to recent allegations and, in some instances, findings of fraud among some of these companies. If a stockholder were to file a class action suit against us following a period of volatility in the price of our securities, we would incur substantial legal fees and our management's attention and resources would be diverted from operating our business to responding to such litigation, which may harm our business and reputation.
- Share Price & Shareholder Rights - Risk 5The rights of the holders of our common stock may be impaired by the potential issuance of preferred stock.
Our board of directors has the right to create new series of preferred stock. As a result, the board of directors may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights that may adversely affect the voting power and equity interest of the holders of our common stock. Although we have no present intention to issue any additional shares of preferred stock or to create any new series of preferred stock, we may issue such shares in the future.
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