China Energy Savings (NASDAQ:CESV)
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Dutton Associates continues coverage of China Energy
Savings Technology (Nasdaq:CESV) reducing its rating to neutral. The
13-page report by Dutton senior analyst Richard W. West, CFA, is
available at www.jmdutton.com as well as from First Call, Bloomberg,
Zacks, Reuters, Knobias, and other leading financial portals.
China Energy Savings Technology made two significant announcements
on January 17, 2006. The first announcement dealt with a management
change; Sun Li resigned as Chairman and CEO "to pursue his own
business and personal interests." Mr. Li remains the largest
stockholder in China Energy through his security holdings in New
Solomon Consultants Ltd. Upon Mr. Li's resignation The Board of
Directors immediately appointed Kwun Luen Siu to the positions of
Chairman of the Board and Chief Executive Officer. Mr. Siu was
referred by Sun Li and reviewed by the Board of Directors of China
Energy before being appointed to the positions. Mr. Siu served as the
Responsible Director of Forex, Futures and Securities under Securities
and Futures Commission of Hong Kong, Chairman of Supervisory Committee
of the Chinese Gold and Silver Exchange Society of Hong Kong, and
Managing Director of Dashin Group in Hong Kong. The second
announcement dealt with a proposed offering of $50.0 million of
preferred stock. Interestingly, before Sun Li's resignation, Mr. Siu
introduced a financial investment group to China Energy. Today, China
Energy announced that it signed an underwriting agreement with this
full service financial investment group to raise $50.0 million through
a private placement of preferred stock. The funds raised will be used
to finance acquisitions of new infrastructure and energy ventures.
China Energy will file a S-3 Registration with the SEC upon placement
of the financing. Considering the major change in management and the
possible raising of $50.0 million of new capital, we are temporarily
reducing our rating to Neutral. We will reconsider our rating upon
reviewing the S-3 Registration that will detail the structure of the
preferred stock.
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We received $20,000 from the Company for 2 reports and requisite
Research Notes commencing 9/25/2005, and do not accept payment of our
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expressed in this research report accurately reflect the analyst's
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