Auhua Clean Company (LSE: ACE), the AIM listed Chinese green energy specialist is a company currently selling at a price to net tangible asset value of 0.02 and a debt to equity ratio of 0.05 excluding intangibles using ADVFN’s financial page.
On the surface this may seem as though it should belong in an old school value investing portfolio.
The trouble is that even at such low valuations, today’s share price of 34p is a 70% premium on it’s last year’s lows of 20p (April 2013).
This is an important consideration for two reasons.
- Chinese stocks are outside my circle of competence.
- The Wild West nature of AIM forces me to be extremely risk averse
It’s one I’ve added to my watch list to check again if it reaches lower prices.
Will Auhua embarrass me by climbing to even higher prices in the future?
Only time will tell.