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We are here to introduce another Hong Kong-listed Cogobuy Group
company sponsored by UBS, the renowned investment Company Information
bank famous for sponsoring fraudulent companies Industry Electronic
includes China Forestry, China Metal Recycling, Boshiwa Component
and Tianhe Chemicals. Cogobuy Group (“Cogobuy”) is Stock Code 0400
listed in 2014 July with UBS acting as sole sponsor, Listing Place Hong Kong
claiming itself to be the “largest E-commerce IC platform Auditor KPMG
in China”. Our investigation shows that not only did
Cogobuy fabricate its revenue and net profit since listing Our Recommendation
in Hong Kong, its online platform and the Rating
“largest intelligent hardware innovation business
platform” IngDan is a complete scam. This report will SELL
present our evidences, including independent online Target Price HKD 0.53
traffic data and SAIC filings, to support our belief that
Cogobuy is just a fraud. Trading Data
Current Price HKD 10.0
1. An Outdated Online Platform that has been down Daily Volume 14 mn shares
for a week and without any traffics (5-day average)
From April 18 to April 26, has been down Market Cap HKD 14.8 bn
for a week without any maintenance. Independent online
competitive intelligence providers show that both IPO Data and IngDan has a minimal amount of IPO Date 2014 Jul 18
traffics compared to its peers. almost has Sponsor UBS
no update since 2014, and with numerous bugs and Underwriter UBS, Jefferies,
errors. IngDan, the claimed entrepreneur IoT platform, is CCBI and CSCI
full of fake projects that are likely to be fabricated by a
mainland China employee. We believe the claimed GMV
of RMB 21.65 bn of Cogobuy is mostly fake.
By downloading or viewing our
2. Significant Discrepancy between Reported Figures report, you agree to our Term of
and SAIC Filings Service. For full details, please
We retrieved Cogobuy’s SAIC filings and discovered a refer to our disclaimer at the last
significant deviation between its revenue figures on SAIC page of this report.

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filings and the reported figures on annual reports. Even after making generous assumption, the
revenue implied by SAIC filings is only around 40% of the reported figures. Moreover, its tax
figures on SAIC filings is only around 30% of the disclosed PRC tax expense, further corroborating
our finding.

3. Unparalleled Financial Performance compared to its Peer
The return of equity on Cogobuy is around 20% for four years already, significantly higher than
its peer and many other industries. Its growth rate in revenue and net income is also unparalleled
compared to its peers, stating the reason of high growth rate as “driven by the one-step services
from the online platform”, which we have already shown to be mostly fake.

4. RMB 1.9 billion of Difference between Net Income and Cash Flow
Although having a spectacular net income, the operating cash flow is mostly negative and much
smaller than the reported net income. From 2011 to 2016, Cogobuy reported a total net income
of RMB 1.23 bn, but its adjusted net cash flow from operations is negative RMB 0.67 bn, with a
difference of RMB 1.90 bn. Most of it goes to trade and other receivables and inventories, which
are growing much faster than the revenue. Cogo Group, the former entity of Cogobuy, also has a
similar story. As expected, no dividend has been declared by Cogobuy or Cogo Group for twelve

5. Suspicious Share Repurchase with shares mostly coming from a few accounts
Share repurchase at a high share price is frequently quoted by Cogobuy as a way of returning
profit to shareholders. However, our analysis on CCASS shows that most of the share repurchased
actually come from few accounts and it is highly suspicious if these account holders have any
relationship with the controlling shareholder of Cogobuy. We suspect that the share repurchase
is just a scheme to help friendly accounts of controlling shareholder sell shares at high price.

6. Infamous U.S. Listing History of its Former Entity, Cogo Group
Majority of today Cogobuy’s assets come from Cogo Group, which was listed in NASDAQ through
reverse merger in 2004. The controlling shareholder has been reducing his shareholding from
72.6% to 32.4% when Cogo Group’s performance is growing rapidly. We found numerous
suspicious transactions conducted by Cogo Group to funnel cash out. After several times of assets
disposal, Cogo Group is now trading at the illiquid OTCBB, at a price of lower than USD 0.1, less
than 1% of its historical high price.

7. A Share Placement that is Undersubscribed and has no Industry Investor
Cogobuy has completed a placement in 2016 September. Although with the clause of guaranteed
return and investors will only suffer loss if the controlling shareholder goes bankrupt, it was
undersubscribed with no industry investor, showing the pessimistic view of industry players on

In view of the above, we believe that Cogobuy is another fraudulent company brought to us by
UBS and we value Cogobuy at HKD 0.53 per share, implying a 95% downside.

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Cogobuy is 46.63% owned by Mr. Jeffrey Kang (“Mr. Kang”) as of 31 December 2016, and was
listed in 2014 July with UBS acting as sole sponsor, with an offering size of around HKD 1.38bn.

Cogobuy is an eCommerce platform for integrated circuits (“IC”) and other electronic components
in China. It claims itself as the “largest E-commerce IC platform in China”, with a Gross
Merchandise Value (“GMV”) of RMB 21.65 billion in 2016. Over 99% of the revenue comes from
its online sales of IC and other electronic components (i.e. direct sales model). In the direct sales
model, the e-commerce platform operators buy IC and other electronic components from the
suppliers, hold the inventory and then sell them to customers, earning a profit from the price
difference. This is a relatively new business model in the industry with only a few players such as
IC Key. A very small percentage of Cogobuy’s revenue comes from the marketplace model, in
which the platform facilitates third party suppliers to complete transactions with customers, but
does not hold any inventory from the suppliers. Cogobuy also provides supply-chain financing to
customers, such that they can borrow from Cogobuy in purchasing products through the platform
of Cogobuy.

Small and Medium Enterprises (“SME”) is the major focus of Cogobuy. SME accounts for 63.25%
of the direct sales revenue with blue-chip customers accounting for the remaining 36.75% in 2016.
The portion of sales from SME clients has been increasing steadily in recent years, and is the major
driver of Cogobuy’s growth according to management. Cogobuy has been claiming its
unparalleled strength in SME due to its sophisticated e-commerce platform. For example,
Cogobuy’s prospectus (pg. 100) stated:

"SME electronics manufacturers often lack sufficient scale to secure timely access to authentic
electronic components from brand-name suppliers, bargaining power to negotiate competitive
purchase terms and efficiently manage the procurement process. Our e-commerce platform
streamlines China’s complex procurement system for SME electronics manufacturers, creating an
efficient channel to access reliable and high-quality branded products.".

To sum it up, the high growth rate of Cogobuy is due to its unique edge in SME, mainly driven by
its online platform that can provide superior services to SME. is the website that
operates this online platform.

Besides, IngDan is another new concept raised by Cogobuy. According to the
Company, IngDan is the largest hardware innovation platform. The function of IngDan is to “create
a platform that connects various parties along the electronic manufacturing supply chain
(upstream component suppliers, legal/financial consultants, downstream distributors, etc.) to
provide one-stop solutions for IoT and hardware entrepreneurs”. Management also credits IngDan
for contributing a major portion of SME customer acquisitions, leveraging its strong presence
among China's entrepreneur community1. Mr. Kang has the intention of spinning off IngDan and
list it in Mainland China next year2.

Website: / Email:
The majority of today Cogobuy’s asset came from Cogo Group, its former entity which was listed
in NASDAQ through reverse merger in 2004 and delisted in 2015. Cogo Group is also majority
owned by Mr. Kang and has been conducting similar business before.

Following we will investigate Cogobuy in depth and come to the conclusion that Cogobuy is just
another scam brought by UBS.

Source: UBS Initial Coverage on Cogobuy published on 2017 March 8

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Part 1. A Paradox: The Largest E-Commerce IC Platform with the Smallest Traffic

According to the Company’s disclosure, is the largest transaction-based e-
commerce platform for IC and other electronic components in China as measured by GMV since
2013, while IngDan is the largest intelligent hardware innovation business platform in China. The
disclosed GMV for Cogobuy reached RMB 21.65 bn in 2016, of which RMB 5,185 mn comes from
IngDan. The target GMV of IngDan in 2017 is RMB10 bn, and Cogobuy aims to develop into a
RMB 100 bn e-commerce platform within several years3. The management painted
as the Jingdong Mall of electronic components and IngDan as a “comprehensive electronics-
manufacturing ecosystem” in the IoT era.

However, our following analysis shows that different sources of independent web statistics
completely contradict with the promising picture painted by the management. Both and IngDan have a minimal amount of web traffic, and is ranked almost the
lowest when compared to its major competitors. Moreover, both websites are poorly designed
and has even been down for a week in April. If such a website can have billions of
GMV, then it is a legend that should be learnt by all entrepreneurs in Silicon Valley. Rather, we
believe the truth is that Cogobuy is at most a traditional offline distributor with inflated revenue,
with the aim of attracting innocent investors believing its fascinating future.

Traffic myth of and

In its 2014 prospectus, the Company disclosed that it has the largest market share in transaction-
based market for IC and electronic components:

Exhibit 1: GMV and market share in transaction-based market for IC and electronic components

Source: Cogobuy 2014 Prospectus, Pg 72

As the top player in the market, we expect Cogobuy to have a very high web traffics. Of course,
since, Global Sources and Alibaba sell other general products, a direct
comparison between them and Cogobuy is not appropriate. But, ranked number five
above, mostly sells electronic products and therefore we would expect the web traffics of Cogobuy,
as the top player in the market, to be around ten times more than that of as implied
by the GMV. However, the truth is just the opposite. Below are the estimated web traffic data from

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two leading online competitive intelligence providers, Alexa and SimilarWeb, which are publicly

Exhibit 2: Web Traffic Estimation and Rankings of Cogobuy and its competitors, sorted by monthly
SimilarWeb Alexa Disclosed Revenue Prospectus’
Product Platform Monthly China China (RMB mn) 1 Mkt. Share
Name Type Type Visits (k) Rank Rank 2016FY 2015FY in 2013
Alibaba General Marketplace 112,000.00 110 78 5,425.00 4,718.00 6.10%
General Marketplace 10,000.00 n.a. n.a. N.A. 455.80 8.80%
General Marketplace 779.50 n.a. 720 508.11 410.98 9.30%
China Electronic Marketplace 583.10 4,427 850 N.A. N.A. N.A. Electronic Marketplace 387.70 5,227 3,023 67.59 73.37 5.60% Electronic Direct Sales 128.90 9,284 2,266 1,000.00 500.00 N.A. Electronic Marketplace 56.20 16,722 5,742 N.A. N.A. N.A. Other Marketplace 24.20 38,488 32,783 12,932.79 9,453.392
N.A. Electronic Direct Sales 7.90 72,711 n.a. 100.003 N.A. N.A. Electronic Direct Sales 5.40 84,465 9,085 12,932.792 9,453.392 55.10%
Source: SimilarWeb and Alexa’s data retrieved in May 2017. Revenue from companies’ public disclosure
1: Only include the revenue segment generated by the online B2B platform
2: Total revenue for Cogobuy is stated here since separate figures are unavailable
3: 2016 revenue is only target figure disclosed on official website

From the above table, we can see that estimated monthly visits is only 5.40k, and estimated monthly visits is 387.70k, around 70 times larger than that of
Other competitors which sell general products have an even higher traffic and ranking as expected.

One observation is that the ranking is also mostly consistent with the disclosed revenue for
marketplace platform and direct sales platform respectively (except and Note that the revenue for marketplace model and direct sales model cannot be
compared directly. For marketplace model, only the commission or fees generated, e.g.
transaction commission and advertising fees are recognized as revenue, while the whole GMV is
recognized as revenue for direct sales model.

By just looking at the platform that adopts a direct sales model, we can see that has a
much higher traffic than, but the disclosed 2016 revenue for is only RMB 1
billion. A more comparable website to is (which still has a higher traffic
than, with only a revenue of around RMB 100 mn. How is it possible for Cogobuy
to generate over RMB 20 billion GMV when its ranking and traffic rank almost the lowest
among its competitors?

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How are traffic estimate and ranking determined?

Alexa (under Amazon) and SimiliarWeb are the two leading online competitive intelligence providers for
website traffic and ranking estimation. Both companies use a wide array of data, such as information
provided from local internet service provider, web crawlers, and users’ explorer to estimate the web
traffics, which then determine the ranking. You can try to verify the above ranking on their websites:


A Tour of, the most outdated E-Commerce IC Platform in China

Do not take our words for granted. A simple tour of and would already
be sufficient to understand its low traffic and ranking. Let open in the explorer
to visit the spectacular main page of the largest E-Commerce IC Platform in China:

Exhibit 3: Screenshot of

Source:, as of 2017 May 8

The main page seems to be not very welcoming. We tried different explorers and all shows the
same results, stating that the connection is insecure. Our IT consultant told us that the website
administrator configured the SSL certificate improperly, leading to the warning4. We are skeptical
that how can a platform with billions of GMV could have committed such a low-level mistake
without anyone fixing it for a long time.

By the time you read our report, we believe (hopefully) that Cogobuy would have already
corrected the mistake. If not, you can enter in the explorer to visit the
main page without warning:

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Exhibit 4: Screenshot of as of 2017 May 8

Selected Product (Industry trend, newest and hottest products)

Source:, as of 2017 May 8

You can see there are six selected products on the main page, which are stated as the newest and
hottest products. Now let take a look at the website three years ago when it was just listed:

Exhibit 5: Screenshot of as of 2014 Jul 7

Selected Product (Industry trend, newest and hottest products)

Source:, as of 2017 May 8

Website: / Email: is a website that archive Internet webpages periodically and reader can go there to
visit the past snapshots of By comparing the two screenshots, we can see that five
of the six “newest and hottest products” has actually been here since three years ago. There is
hardly an update on the website since its listing (except the news part which tells us how promising
the future of Cogobuy will be). Most of the selected products on the website are outdated. For
example, the first selected product, RFMD – RFSA2013 was introduced in 2011 June5 (If you click
into its product page and then the qualification report, you will only be redirected to the
manufacturer website. There are plenty of other similar bugs in the website). The last selected
product, Littlefuse – 87063-022’s whole series is even obsolete and production has already been
discontinued6. We highly doubt how new and hot these products are.

(If the Company has already update the section by the time you read this report, you can still visit
the following link to see the archived webpage of it as of 2017 May 9:

The Company may argue that it only forgets to update the section. Therefore, we picked one
supplier, SanDisk, which was listed on both the prospectus (pg.4) and the main page, to see if its
newest products are available on the website. If you click the SanDisk image on the main page,
you would be directed to the following webpage:

Exhibit 6: Screenshot of Cogobuy’s SanDisk Section

We provide the following product:
iNAND Embedded Flash Drive, SSD, memory and PC

Source:, as of 2017 May 8

Since iNAND Embedded Flash Disk is listed as the first product here, we would try to see if the
newest product in the series can be found on and compared the result to its
competitor. iNAND is manufactured by SanDisk and it has six major series, which are 3120, 5130,
7030, 7232, 7250 and 7350. You can visit SanDisk official website for further details. Under each
series, there are different products with different specification, such as memory size. Each product
is associated with a product number that uniquely identifies the product, which can be used for

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searching the product on online platform. For example, the latest 128GB version of iNAND 7232’s
product number is SDINADF4-128G-L/H. We tried to search the iNAND products on Cogobuy and
other IC platforms by product number, with the following results:

Exhibit 7: iNAND brands availability on and other IC platforms
3120 5130 7030 7232 7250 7350
Major product
number prefix
Launch Date 2011 Feb 2011 Feb 2012 Jun 2015 July 2015 Oct 2017 Feb
Platform Availability on the platform (Y: Yes, N: No) Y Y Y Y N N Y Y Y Y Y N Y Y Y Y Y N Y Y Y Y N N No Sandisk Product N N N N N N
Source: Respective official website’s search result, as of 2017 May 8

To our surprise, none of the series products can be found on, while most other
platforms return with detailed description. For example, if you search SDIN8DR1 (i.e. iNAND 3120
series) on, you get the following result:

Exhibit 8: Screenshot of Cogobuy’s search result on SDIN8DR1
Sorry we cannot find products related to “SDIN8DR1”

Source:, as of 2017 May 8

On the other hand, gave us the details of the product with pricing.

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Exhibit 9: Screenshot of’s search result on SDIN8DR1

HK Pricing PRC Pricing

Source:, as of 2017 May 8

So what products are listed on the SanDisk section of Actually, those are very
outdated product back to 2005. For example, the first product on the list (refer to pg.9 screenshot),
FFD-25-IDEP-10240-B, was launched back in 2005 September7.

It is surprising to see that even iNAND series is listed as the first major product and SanDisk
is listed as the major supplier of Cogobuy, none of its iNAND series product can be found
on We tried other suppliers’ products and the results are similar: most
products appear on other IC platforms but not Reader can pick a supplier
randomly and try search its newest products on, and you will get a similar

Down for a week without maintenance

The most unacceptable point of is that it has been down for a week in April. If you
visit from 2017 April 18 to 2017 April 26, you will get the following result:

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Exhibit 10: Screenshot of on 2017 April 26

Source:, as of 2017 April 26

Our IT consultant told us that the reason for the above display is not because the server was not
functioning properly, but because the linkage to the format file (a CSS file) is broken, and therefore
all webpage formatting is lost. The error can be easily fixed by placing back the CSS file to the
correct location. If is really having the claimed GMV of RMB 21.65 billion, then
such a careless mistake would cost Cogobuy around RMB 400 million of GMV. We hope the
management to explain fully the details of this incident.

There are countless other bugs (e.g. invalid link, improper security setting) in and
we would not explain in details here. These low-level errors can be easily fixed by an IT professional
with basic understanding of website development. We are astonished to see a platform without
even a proper website administrator can have billions of GMV.

As the management points out,, as a one-stop platform, allows SME to
purchase products online easily and is the main driver of the rapid growth of
in recent years. We serious doubts how a SME can find the products it need in such a poorly-
designed, outdated and unstable platform. We believe that most, if not all, of the claimed
GMV on does not exist. We believe the rapid growth of Cogobuy is
unsupported by its fundamental and is mostly fake.

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A Tour of, the largest fraud innovation business platform in China

According to 2016 Annual Report, is the largest intelligent hardware innovation
business platform in China, and contributed GMV of RMB5,185mn in 2016. By the year end of
2016, has registered more than 20,000 intelligent hardware projects and over 20.0
million followers.

At of 2016 May 16, the Company announced that the number of IoT projects on
reached nearly 13,000. Therefore, within seven and a half months, the number of IoT projects on has increased by 7,000, at a rate of around 930 projects per month.

Let visit IngDan to see if the claimed project rate and the GMV is reliable. IngDan has several
subdomains for different functions and languages:

Exhibit 11: List of IngDan’s subdomains
Subdomain URL Language Function
Provide (i) crowdtesting and (ii) crowdfunding Simplified
service, and also list the major activities held by
?language=zh Chinese
Traditional Mainly providing information of IngDan Concept
Chinese English Mainly providing information of IngDan Concept
Provide (i) “IngDan Link”, i.e. supplier matching Simplified
service and (ii) “IoT Supermarket”, allowing
(IngDan Supply Chain) Chinese
entrepreneurs to purchase electronic products online Simplified
Allow consumers to purchase IoT products online
(IngDan Mall) Chinese

The subdomains may be somehow confusing. For example, you may think that the first three
subdomains are just the same webpage with different languages, but actually the content of all
three websites do not correspond to each other. If you enter in your
explorer, you will be directed to one of the first three subdomains.

From the table above, we can see that IngDan provides a comprehensive ecosystem to
entrepreneurs. The main page (Simplified Chinese version) provides crowdtesting and
crowdfunding service. IngDan Supply Chain allows innovators to connect to supplier and is often
claimed by the management as the competitive edge of IngDan compared to other platforms.
IngDan Mall allows entrepreneurs to sell their products to public. Following we will investigate
each function one-by-one.

As we expect Cogobuy’s management will rush to update the section mentioned in this report
very soon, we have already archived all the relevant webpages on 2017 May 9. You can visit the
archived version of the website from, if the website has already been

Website: / Email:
IngDan’s Crowdtesting and Crowdfunding: Three Projects for the Whole April

If you visit the simplified Chinese version of IngDan main page, you will find the list of
crowdtesting and crowdfunding project:

Exhibit 12: IngDan main page (Simplified Chinese version)


Number: 18
Application Number: 74
Crowdtesting Test Report: 0

Number: 5
Application Number: 55
Test Report: 0


Number: 5
Application Number: 84
Test Report: 5

Source: as of 2017 May 8

We observe that there are only three crowdtesting / crowdfunding projects (the second and third
one is actually the same project, one for crowdtesting and another one for crowdfunding) in 2017
April, with a minimal amount of traffic. How can a platform with 930 new projects per month
only have three crowdtesting and crowdfunding project for a whole month? This stands as
a stark contrast with other innovating platforms such as JD Finance ( in

Moreover, if you visit the event section ( here, you will find only one
event in 2016 and 2017, with all others event from 2015. Cogobuy seems to have a habit of not
updating websites.

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The management may argue that most projects do not need crowdtesting or crowdfunding
service, and only supply chain matching service is provided. Following we will investigate IngDan
Supply Chain, the core of, with an even more astonishing result.

IngDan Supply Chain: Matching Requests for an internal Mainland China’s Employee

IngDan Supply Chain has two major functions. One is linking entrepreneurs with suppliers (i.e.
“IngDan Link”) and second one is IoT Supermarket, allowing entrepreneurs to purchase the
electronic components directly.

In IngDan Link, entrepreneurs can submit their requests for suppliers online, and the details of
each supply chain request can be found on the website:

Exhibit 13: Screenshot of IngDan Link’s request

Protective casing for tracheal tube that has the function of removing dust, filtering,
moisturization, local warming and heat insulation function. Achieved the requirements of
tracheal surgery after tracheotomy. Prototype is ready and needs manufacturing in scale


Two-body structured remote control boat, with the size of about 60cm long, 45cm wide and
20cm height


A design of nail clippers that prevent nail from flying around when clipping


Source:, as of 2017 May 8

However, most of the requests on the webpage seems to be without commercial substance. For
example, from the above screenshot, you can see the user goodoyo submitted for two strange
requests within just an hour (Actually the user goodoyo has other strange requests which can be
found in appendix A). There are many similar users with repeating requests.

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Most importantly, the distribution of the request across time is highly suspicious. There is almost
no request on weekend or Chinese holiday (E.g. no requests on April 2 and April 3, which is
Mainland China’s holiday for Qingming Festival, but Hong Kong has no holiday on April 3). The
management may argue that all entrepreneurs are having rest on Mainland China’s holiday.
However, on April 28, a working Friday, there is completely no request as well. Is it possible that
the Mainland China employee responsible for posting these requests took a day off or forgot to
post request on that day?

Since the supplier company names are provided in each request, we tried to contact some of the
suppliers provided to these “entrepreneurs”, and all suppliers told us that they are not aware of
having received any product request from IngDan platform.

As we expect the Company will delete these dubious requests soon, we have already attached the
full list of request in 2017 April in the appendix. It is highly dubious that if there are any real
innovations behind these messy and weird requests. We are highly skeptical how these
requests can generate RMB 5,185 mn GMV for IngDan in 2016.

Even if we treat these dubious request as “IoT project”, we counted that there are total of
117 projects in 2017 April, still far short of the 930 projects monthly rate as implied by
Company’s disclosure. Most importantly, the possibility of arranging a Mainland China
employee creating fake request on its own platform leads us to question the integrity of

Moreover, if you visit “Link Experience” Section that allows user to experience, you will find only
one user sharing its experience in 2016 July for the whole year of 2016, and completely no sharing
in 2017:

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Exhibit 14: Screenshot of IngDan Link Experience

Thank you IngDan and all

2016-07-04 23:30:55

Thank you IngDan

2016-07-04 23:25:10
Never thought our creativity can lead to a
manufactured product

2015-11-13 10:44:30

Source:, as of 2017 May 8

Following, let us visit the second function of supply chain solution to entrepreneurs, IoT
Supermarket, allowing entrepreneurs to purchase chips directly on its platform. We registered an
account and clicked the purchase button for a randomly-selected product with the following result:

Exhibit 15: Screenshot of purchasing from IngDan IoT Supermarket

Please contact customer support to
400 883 0393 ext “1”
(Monday to Friday 0900-1800)

Source:, as of 2017 May 8

Website: / Email:
Although Cogobuy has been emphasizing O2O for many years, it seems the process of switching
from online to offline is too fast than expected. We tried other different products, all asking us to
call the customer support. The IoT Supermarket seems nothing more than an online catalog of
product. But still, it is better than IngDan Mall, which has all products sold out every day.

IngDan Mall: All products sold or 404 Error

If you visit IngDan Mall, you can find a wide variety of IoT prdoucts:

Exhibit 16: IngDan Mall Page

#1 #2

#3 #4

Source:, as of 2017 May 8

However, if you click into the product, you will find that either it was all sold or having a 404 error.

Exhibit 17: Screenshot of IngDan Mall #1 product

Sales: 96 Inventory: 0

All Sold
Source:, as of 2017 May 8

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The #1, #2 and #4 products are all sold, which has been the same for whole April. Moreover, the
#3 product would lead you to a 404 error page.

Exhibit 18: Screenshot of IngDan Mall #3 product

Your visiting webpage is not found or has already
been removed. You can go back to main page

Source:, as of 2017 May 8

We tried other products all with similar results, stating that the products are all sold or leading to
a 404 error page. How would anyone purchase any products from IngDan Mall, and how would it
be possible to help entrepreneurs sell its products?

From the above analysis, we can see that all parts of IngDan ecosystem, from supply chain and
crowdfunding to sales, have almost no commercial substance at all. A savvy investor may find
similarity between IngDan and “Cogo 3.0”, a grand concept proposed by Mr. Kang back in 2011
to stop share price from falling (but unsuccessful) when it was still listed in NASDAQ. “Cogo 3.0”
has been fiercely questioned and criticized by U.S. investors, and has no longer been mentioned
by Mr. Kang anymore.

Now Mr. Kang is repeating his gimmick again, even with the plan of spinning off IngDan
and listing it in Mainland China next year8. We do not think that CSRC will allow such a scam
to repeat in Mainland China. We believe IngDan is nothing more than a bubble poorly
orchestrated by Cogobuy to attract innocent investors and to push up share price. We
believe that most, if not all, of the RMB5,185 mn claimed GMV on IngDan does not exist at

Source: Guo Jingjing, Vice President of Cogobuy Group,
The technical reason is as follow: the SSL certificate is only granted to * and the website
administrator made a low-level mistake of omitting in the certificate domain, leading to the

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Part 2. Significant Discrepancy in SAIC filings

Similar to many other frauds of Chinese listed companies, we found that there is a significant
deviation between the revenue figures reported by Cogobuy and its SAIC filings. Buyers would
generally require a PRC’s invoice if the sales are conducted in PRC, and the invoice amount will be
recorded in the SAIC filing of Cogobuy’s PRC subsidiaries. Therefore, we have identified all major
PRC-incorporated subsidiaries with major business stated as “sales of electronics components”
from annual report and retrieved their respective SAIC filings (Please refer to Appendix C for SAIC
filings of Comtech Digital Technology (Shenzhen) Limited in 2015 as an example for your
reference). Below is the table summarizing the discrepancy between its SAIC filings and reported

Exhibit 19: Discrepancy between Cogobuy’s SAIC filings and reported figures
PRC subsidiaries with major business of “sales Sales in 2015 Sales in 2014
of electronics components” (thousand RMB) (thousand RMB)
Comtech Digital Technology (Shenzhen) Limited 99,800.9 n.a.9
Envision Communication Technology (Shenzhen)
51,059.2 93,016.6
Company Limited
Shanghai Comtech Electronic Technology 62,499.6 72,120.0
Shanghai E&T System Company Limited 17,930.0 41,933.88008
Qianhai (Shenzhen) Limited 154,099.1 n.a.
Cogobuy Wireless Technology (Shenzhen) Limited 11 165.6 n.a.
Total sales from SAIC filings 385,554 207,070
Revenue disclosed in annual reports 9,453,389 6,848,365
Source: Cogobuy’s annual reports and relevant SAIC filings

A savvy reader may point out that the majority of Cogobuy’s sales maybe incurred in Hong Kong,
and the buyers will transport the products back into Mainland China on their own, and therefore
the sales amount reported in SAIC filings may inevitably be much lower than the reported figures.
We tried to find the breakdown of sales in PRC and Hong Kong from Cogobuy’s annual reports
but to no avail. But during 2017 Xueqiu Hong Kong Stock Summit, Cogobuy’s Vice President Ms.
Guo Jingjing stated that “more than 80% of our sales are settled in Hong Kong”12. As her intention
was to show its logistics strength outside PRC, she would have no intention to understate this
figure, and we believe that the actual portion of Hong Kong sales is likely to be around 80%.
However, when we tried to adjust the SAIC figures assuming 80% of the sales are settled in Hong
Kong, there is still a 79.6% difference between adjusted SAIC filings and reported revenue in 2015.
To be conservative, if we further assume 90% of the sales are settled in Hong Kong (which is the
highest possible ratio in our opinion, since Ms. Guo Jingjing would quote more than 90% if the
actual figure is over 90%. See our analysis below for further supporting evidence), there is still a
59.2% difference between adjusted SAIC filings and reported revenue in 2015. The same analysis
applies to 2014 as well.

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Exhibit 20: Difference in sales using various assumptions
Sales in 2015 Sales in 2014
(thousand RMB) (thousand RMB)
Total sales from SAIC filings 385,554 207,070

Cogobuy’s total sales
1,927,770 1,035,350
(assume 20% of sales are settled in China)
Revenue disclosed in annual reports 9,453,389 6,848,365
Difference 79.6% 84.9%

Cogobuy’s total sales
3,855,540 2,070,700
(assume 10% of sales are settled in China)
Revenue disclosed in annual reports 9,453,389 6,848,365
Difference 59.2% 69.8%

According to industry experts we consulted, blue-chip clients tend to settle their trades in Hong
Kong in order to avoid currency risk, given that they have the ability to import the products back
into China. Yet, for SMEs which do not have such capability, they prefer to settle the trades in PRC
to minimize their administrative costs. So as to verify this claim, we have obtained SAIC filings of
IC Key (Shanghai) Internet Technology Company Limited (the PRC operating company of IC Key,
previously known as Shanghai Yunhan Electronics Company Limited) and its subsidiaries. IC Key
is a close competitor of Cogobuy with a similar business model (i.e. online direct sales model)
focusing on SME. By contrasting IC Key’s SAIC filings and disclosed sales figures, we noticed that
more than half of its sales are settled in the PRC, which is what supposed to be the case for an
online platform focusing on SME market.

Exhibit 21: IC Key’s proportion of revenue in China
2013 2014 2015
IC Key’s disclosed sales figures (RMB million) 57 173 500
IC Key’s SAIC reported sales figures (RMB million) 57 14413 32814
Proportion of Sales in PRC 100% 83% 66%
Source: IC Key’s website and relevant SAIC filings

Given that Cogobuy claimed to have generated more than half of their revenue from SME clients
recently (see table below), we would expect Cogobuy’s client to choose place of settlement in a
similar manner to that of IC Key and thus generate similar revenue mix between Hong Kong and
PRC. Therefore, we think it is highly abnormal that Cogobuy has more than 80% of sales settled
in Hong Kong given its claimed popularity among China’s SME, not to mention 90%. It is possible
that those SMEs may be just related parties of Cogobuy such that they prefer to settle in Hong
Kong for the purpose of tax evasion.

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Exhibit 22: Cogobuy’s segment revenue from 2011 to 2016
2011 2012 2013 2014 2015 2016
Blue-chip clients 38.7% 40.0% 55.9% 51.2% 40.9% 36.75%
SME clients 61.3% 60.0% 44.1% 48.8% 59.1% 63.25%
Source: Cogobuy’s prospectus and annual reports

In view of the above, we think that Cogobuy’s revenue distribution is highly suspicious.
Even if we were to believe that 90% of Cogobuy’s revenue is from Hong Kong, there would
still be a near 60% difference with the reported figures on SAIC filings. We strongly believe
that the majority of Cogobuy’s revenue does not exist and Cogobuy is just a scam like other
Chinese companies’ fraud in the past.

SAIC Tax far lower than Annual Report Disclosure

Since the revenue for Cogobuy is highly inflated, we expect its net income is highly inflated as
well. Tax figures from SAIC filings further corroborates with our analysis above. In 2015 Annual
Report, the Company disclosed that its 2015 income tax expense is RMB 56.89mn. Of the RMB
56.89mn, RMB 22.98mn comes from PRC Corporation Income Tax:

Exhibit 23: 2015 Cogobuy’s Accountant Report Notes on Income Tax

Source: Cogobuy’s 2015 annual report, pg. 79

According to government policy, all China companies have to file the amount of “total tax” to
SAIC annually. This “total tax” refers to the amount of tax that is payable to government for that
reporting year. It includes all kinds of tax, such as Value-Added Tax (VAT), business tax and income
tax. It should be noted that it does not mean the actual tax you have paid in cash during that year.
For example, if a Chinese company earned RMB 10 mn in 2015 and has to pay RMB 2.5 mn income
tax in early 2016, this RMB 2.5 mn income tax will be included in the “total tax” in 2015 SAIC filing.
Since other taxes are also included in the calculation, this “total tax” amount should be much
larger than annual report disclosure. However, our finding tells us the opposite. Below is the table
of the “total tax” amount disclosed in 2015 SAIC filings for all Cogobuy’s major subsidiaries with
major business stated as “sales of electronics components”:

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Exhibit 24: 2015 Total Tax Amount filed by Cogobuy major subsidiaries in SAIC
2015 Total Tax in SAIC
Subsidiary Name
(RMB '000)
Comtech Digital Technology (Shenzhen) Limited 6,792.60
Envision Communication Technology (Shenzhen) Limited 868.30
Shanghai Comtech Electronic Technology 1,640.10
Shanghai E&T System Company Limited 210.00
Qianhai (Shenzhen) Limited 25.20
Cogobuy Wireless Technology (Shenzhen) Limited 0.00
Total Tax for all major PRC Subsidiaries 9,536.20
Disclosed PRC Income Tax in Annual Report 22,984.00
Difference (%) 58.5%
Source: SAIC filings, 2015 annual report

Even if we assume Cogobuy does not need to pay any VAT, we still find that the reported PRC
income tax on annual report is 2.4 times of the figures in SAIC filings. To accurately estimate the
actual inflation, we have to first estimate the amount of VAT paid by Cogobuy in 2015:

Exhibit 25: 2015 PRC VAT Estimation (All figures in RMB '000 except %)
SAIC Est. Gross Est.
Subsidiary VAT Rate
Revenue Profit VAT
Comtech Digital Technology
6.00% 99,800.90 8,073.60 515.34
(Shenzhen) Limited
Envision Communication Technology
3.00% 51,059.20 4,130.54 127.75
(Shenzhen) Limited
Shanghai Comtech Electronic
17.00% 62,499.60 5,056.03 1,035.57
Shanghai E&T System Company
17.00% 17,930.00 1,450.48 297.09
Qianhai (Shenzhen)
3.00% 154,099.10 12,466.16 385.55
Cogobuy Wireless Technology
3.00%1 165.60 13.40 0.41
(Shenzhen) Limited
Total 385,554.40 31,190.20 2,361.71
Source: SAIC filings, disclosed VAT Rate from prospectus
Note 1: The VAT rate of Cogobuy Wireless Technology (Shenzhen) Limited is not disclosed, and we assumed
the minimum 3.00% VAT rate to be conservative
Note 2: We estimate the gross profit by applying Cogobuy overall 2015 gross margin (8.09%) to each
subsidiary’s revenue. Then we estimate VAT by using the formula: (Gross Profit * VAT Rate) / (1 – VAR Rate),
since COGS is VAT deductible and reported sales is post-VAT figure

Therefore, the total estimated 2015 VAT is around RMB 2.36 mn. By deducting the VAT, we can
calculate the PRC income tax inflation rate of Cogobuy:

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Exhibit 26: 2015 PRC Income Tax Inflation Estimation (RMB ‘000)
Total Tax in SAIC filing 9,536.20
Estimated VAT 2,361.71
Estimated Income Tax (Total Tax in SAIC filing -
Estimated VAT)
Disclosed PRC Income Tax in Annual Report 22,984.00
Difference (%) 68.8%

By taking VAT into account, we can see 68.8% of the reported PRC income tax does not
exist. However, we still have not taken accounts of other taxes such as urban maintenance
and construction, education surtax etc. If we further take these taxes into accounts, the
difference % will likely be larger than 70%, further corroborating with the revenue
difference 60-80% calculated in previous section.

Comtech Digital Technology (Shenzhen) Limited did not report its financials in 2014 in the SAIC filing
Qianhai (Shenzhen) Limited is only disclosed as a PRC subsidiary with principal activities
of “sales of electronics components” in 2015 annual report, but not 2014 annual report
Cogobuy Wireless Technology (Shenzhen) Limited is only disclosed as a PRC subsidiary with principal
activities of “sales of electronics components” in 2015 annual report, but not 2014 annual report
Consist of RMB 129 million of sales from Shanghai Yunhan Electronics Company Limited (the major PRC
operating subsidiary of IC Key) and RMB 15 million of sales from Shanghai Shouxin Electronics
Technology Company Limited (subsidiary of Shanghai Yunhan Electronics Company Limited)
Consist of RMB 289 million of sales from Shanghai Yunhan Electronics Company Limited (the major PRC
operating subsidiary of IC Key), RMB 37 million of sales from Shanghai Shouxin Electronics Technology
Company Limited (subsidiary of Shanghai Yunhan Electronics Company Limited) and RMB 2 million of
sales from Shenzhen Hanyun Electronics Company Limited (subsidiary of Shanghai Yunhan Electronics
Company Limited)

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Part 3. Unparalleled financial performance of Cogobuy

To further confirm our understanding, we tried to compare Cogobuy’s performance against its
peers in order to see if its performance is in line with other competitors in the market. We noticed
that UBS, the sole sponsor in Cogobuy’s IPO back in 2014, initiated coverage on Cogobuy with a
buy rating on 2017 Mar 8. To be fair, we will use the same companies listed in the comparables
on UBS’s report (see below table) and compare Cogobuy’s financial performance with them.

Exhibit 27: List of comparable companies

Source: UBS Research Report, published on 2017 Mar 8

Among the list, IC distributor peers are the most comparable to Cogobuy (Can Cogobuy be
compared to Alibaba? We highly doubt it.), and we will therefore compare Cogobuy’s
performance with the IC distributor peers. We compared their financial ratios and discovered that
Cogobuy is much of an outlier compared to its peers. For example, Cogobuy has an unparalleled
return on equity (ROE) (see the chart below) for years:

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Exhibit 28: Return of Equity (ROE) of Cogobuy and its peers

20.0% 17.9%



2014 2015 2016

Cogobuy Group Avnet Inc WPG Holdings Arrow Electronics WT Microelectronics

Source: Respective Annual Reports

Apart from its extraordinarily high ROE, we also spot that the revenue and net income growth rate
of Cogobuy are both significantly higher than its IC distributor peers (see the charts below).
According to Ms. Guo Jingjing in 2017 Xueqiu Hong Kong Stock Summit, Cogobuy’s number of
new customers, GMV and non-GAAP net profit will grow by 80%, 50% and 30% respectively in
201715, continuing its spectacular growth rate which is too good to be true.

Exhibit 29: Revenue Growth Rate of Cogobuy and its peers




38.0% 36.8%

2014 2015 2016

Cogobuy Group Avnet Inc WPG Holdings Arrow Electronics WT Microelectronics

Source: Respective Annual Reports

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Exhibit 30: Net Income attributable to equity shareholders of the Company
Growth Rate of Cogobuy and its peers

100.0% 76.6%


2014 2015 2016


Cogobuy Group Avnet Inc WPG Holdings Arrow Electronics WT Microelectronics

Source: Respective Annual Reports

We note that some investors argue in online forums that Cogobuy’s gross profit margin and net
profit margin are not extraordinary high compared to its peers, showing that Cogobuy’s profit
may not be fake. This is inaccurate in the sense that Cogobuy’s revenue is highly inflated, therefore
maintaining a similar profit margin to its peers already imply inflation in profit, rendering
comparison between profit margins meaningless.

Regarding its unbelievable growth of revenue and net income, the Company always attributes it
to the development of its online platform and IngDan. For example, the Company quoted “the
development of the growth of sales of IC and other electronic components driven by the one-
step services (Does the management mean one-stop services instead?) from the online platform”
as the reason for the increase in revenue in its latest 2016 annual report. As we have presented
the reality of its online platform to you in previous section, these explanations do not add up at

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Exhibit 31: Reasons explained by management for high growth rate
Revenue Net Profit
The increase was primarily due to the
development of the growth of sales of
The increase of profit was primarily due
2016 IC and other electronic components
to increase of revenue.
driven by the one-step services from
the online platform.
The increase was primarily due to an
The increase was primarily due to the
increase in direct sales revenue and an
2015 strong growth in product sales especially
increase in sales through our
in sales to new SME customers.
marketplace platform.
The increase in our revenue was primarily
The increase was primarily due to an
due to organic growth in the sales
increase in direct sales revenue and an
2014 volume driven by our online platform
increase in sales through our
and the increase in number of
marketplace platform.
transactional customers.
Source: Cogobuy’s annual reports

As we have shown that the so-call online platform is almost the worst online platform we
have ever seen, it is impossible that the online platform can bring any growth at all. We
believe that the rapid growth of Cogobuy is a complete fraud.


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Part 4. RMB 1.9 billion of Disappeared Cash

In order to examine the quality of earnings of Cogobuy, let compare its net income and net
operating cash flows. Net income and net operating cash flows should match for a healthy
company. If a company’s net operating cash flow is consistently smaller than its net income, then
it is a clear red flag. Similar to other fraud companies, Cogobuy has recorded a negative net cash
flow from operations frequently despite its rapidly increasing net profit:

Exhibit 32: Cogobuy Net Income and Net Cash Flow from Operations’ difference (RMB ‘000)
between Net
Net Cash Flow Adjusted Net Income and
Net Income from Cash Flow from Adjusted Net
Operations Operations 1 Cash Flow
2016 509,607 -569,525 -467,946 977,553
2015 366,481 349,671 -120,472 486,953
2014 209,970 231,868 78,539 131,431
2013 86,565 -26,269 15,748 70,817
2012 33,813 -406,369 -72,442 106,255
2011 26,824 -56,335 -99,101 125,925
Total 1,233,260 -476,959 -665,674 1,898,934
Source: Cogobuy’s annual reports and prospectus
Note 1: We have excluded the effect from change in amount due from or to related party as it does not
relate to operation. We have also excluded the effect from change in bank loans used for supply chain
financing business and loans to third parties, since the cash from bank loan used for supply chain financing
business has been increasing rapidly but normally bank loan should be considered as financing cash flow
instead. To be consistent, we have also excluded the effect from corresponding loans to third parties for
supply chain financing business

We can see from above that only two out of six years Cogobuy recorded a positive adjusted
net cash flow from operation (2013 and 2014 when it was just listed), and the adjusted net
cash flow from operation is still far lower than the net income for these two years.
Cogobuy’s total net income from 2011 to 2016 is RMB 1.23 bn, but its adjusted net cash
flow from operations is negative RMB 0.67 bn. Where did the difference of RMB 1.90 bn
go? Here is the answer: 1. Trade and other receivables, and 2. Inventories:

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Exhibit 33: Reconciliation of Cogobuy’s Net Income and Adjusted Net Cash Flow from Operations
from 2011 to 2016 (RMB ‘000)
Adjustment Amount
Increase in trade and other receivables 2,058,158
Increase in inventories 1,278,686
Interest income 80,181
Net realized gains on trading securities 39,509
Reclassification from equity on disposal of available-for-sale investments 23,630
Dividend income 2,181
Share of profits of an associate 2,014
Loss on sale of property, plant and equipment 936
Gain on disposal of subsidiaries 739
Amortization of lease prepayments -293
Depreciation of property, plant and equipment -13,941
Reclassification from equity on impairment of available-for-sale investments -23,917
Impairment loss of available-for-sale investments -37,144
Amortization of intangible assets -41,667
Write down of inventories -58,879
Income tax expense over paid -72,339
Impairment loss on trade receivables -82,608
Equity-settled share-based compensation expenses -103,834
Finance costs -147,902
Increase in trade and other payables -1,004,576
Total difference 1,898,934
Source: Cogobuy’s annual reports and prospectus

Trade and other receivables increase accounts for RMB 2.06 bn of the missing cash, while
inventories accounts for RMB 1.28 bn of the missing cash. Moreover, the growth rate of
trade and other receivables, and inventory are often much higher than the growth rate of
revenue and net income:

Exhibit 34: Growth rate of sales, net income, trade and other receivables and inventory of Cogobuy
2013 2014 2015 2016
Sales growth rate n.a. 183.3% 38.0% 36.8%
Net Income growth rate n.a. 142.6% 74.5% 39.1%

Trade and other receivables
656,766 748,507 1,430,191 2,095,591
(RMB ‘000)
% increase n.a. 14.0% 91.1% 46.5%

Inventory (RMB ‘000) 243,800 501,340 609,172 1,394,835
% increase n.a. 105.6% 21.5% 129.0%
Source: Cogobuy’s annual reports

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Why can Cogobuy trade and other receivables grow so fast? Who are the borrowers of these trade
and other receivables? Are these receivables coming from related parties’ sales that do not
want to inject cash back to the company? We hope the management to disclose the details,
including the breakdown by borrowers of the huge account receivable it has accumulated, and
the relationship of these borrowers with Mr. Kang.

Same Story for Cogo Group: RMB 990 mn of disappeared cash

We conducted similar analysis on Cogo Group, the former entity of Cogobuy listed in U.S. (for the
full story of Cogo Group, please refer to “Part 6. The Infamous History of Cogo Group in U.S.”) and
found a shockingly similar trend throughout all the years:

Exhibit 35: Cogo Group Net Income Free Cash Flow’s difference (RMB ‘000)
between Free
Net Cash Flow
Free Cash Cash Flow and
Net Income from Operating
Flow1 Net Cash Flow
from Operating
2011 -149,219 -147,126 -297,580 148,361
2010 113,055 -22,258 -94,434 207,489
2009 83,169 -33,510 -125,154 208,323
2008 97,162 97,462 48,578 48,584
2007 155,508 46,415 -45,456 200,964
2006 128,820 202,838 209,941 -81,121
2005 90,819 -35,074 -40,540 131,359
2004 64,335 -60,339 -61,934 126,269
Total 583,649 48,408 -406,579 990,228
Source: Cogo Group’s Annual Reports
Note 1: Free cash flow is calculated by deducting payments for acquisitions of subsidiaries, net proceeds
from disposal of subsidiary, capital expenditure from net cash flow from operating activities (i.e. cash flows
from investing activities except increase in pledged bank deposits)

We used free cash flow here to more accurately reflect the tricks used by Mr. Kang. Since rule on
acquisition is much less strict in U.S., Mr. Kang has been using suspicious acquisitions of
subsidiaries as the major way of explaining the missing cash (for the full story of Cogo Group’s
suspicious acquisition, please refer to “Part 6. The Infamous History of Cogo Group in U.S.“).
Therefore, we deducted the payments for acquisition of subsidiaries in the calculation of free cash
flow. Fortunately, Mr. Kang has not used this trick in Cogobuy (for now), may be due to the
rigorous policy of Hong Kong’s Listing Rule on connected transaction.

The difference between the net income and free cash flow of Cogo Group is RMB 990.23
mn over the 8 years of listing in U.S. Except 2006, the year that it attracted innocent
investors in subscribing its new stock, the free cash flow has been much smaller than the

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reported net income and is negative 6 out of 8 years, while the net income is positive 7 out
of 8 years.

Again, let see where the RMB 990.23 mn missing cash went:

Exhibit 36: Reconciliation of Cogo Group’s Net Income and Free Cash Flow from 2004 to 2011 (RMB
Adjustment Amount
Accounts receivable, net 934,934
Payments for acquisitions of subsidiaries, net of cash
Inventories 326,117
Prepaid expenses and other receivables 72,463
Purchases of property and equipment 49,052
Net gain on settlement relating to the acquisition of Long
Rise before goodwill impairment
Bills receivable 27,083
Deferred income taxes 25,835
Extraordinary item 6,737
Gain on disposal of a subsidiary 6,673
Income taxes receivable 2,111
Amount due to a related party 1,408
(Increase)/decrease in other assets 561
Investment in an affiliated company 421
Proceeds from disposal of property and equipment -5
Accrued expenses and other liabilities -468
Loss on disposal of property and equipment -1,053
In-process research and development -4,390
Income taxes payable -12,168
Net proceeds from disposal of a subsidiary -27,742
Depreciation expense -36,270
Provision for doubtful accounts -38,319
Accounts payable -79,416
Amortization of intangible assets -121,774
Impairment loss of goodwill -292,126
Share-based compensation -325,812
Total difference 990,228
Source: Cogo Group’s Annual Reports

Again, accounts receivable and inventories rank high on the list. Account receivable and
inventories accounts for RMB 934.93 mn and RMB 326.12 mn of decreased cash respectively. As
stated above, Cogo Group has been conducting numerous suspicious acquisitions that also
accounts for RMB 432.70 mn of the decreased cash. Similarly, the growth rate of account
receivables and inventory of Cogo Group is often higher than the sales and net income growth:

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Exhibit 37: Growth rate of total revenue, net income, account receivable and inventories of Cogo Group
2004 2005 2006 2007 2008 2009 2010 2011
Total Revenue
625,656 866,332 1,323,563 1,666,508 1,959,540 2,096,216 2,589,518 3,554,401
(RMB '000)
% increase n.a. 38.5% 52.8% 25.9% 17.6% 7.0% 23.5% 37.3%

Net Income
64,335 90,819 128,820 155,508 97,162 83,169 113,055 -149,219
(RMB '000)
% increase n.a. 41.2% 41.8% 20.7% -37.5% -14.4% 35.9% -232.0%

Receivable 168,989 267,543 278,589 418,329 497,992 617,613 681,911 941,798
(RMB '000)
% increase n.a. 58.3% 4.1% 50.2% 19.0% 24.0% 10.4% 38.1%

15,903 110,763 71,959 129,892 95,855 146,132 250,573 327,482
(RMB '000)
% increase n.a. 596.5% -35.0% 80.5% -26.2% 52.5% 71.5% 30.7%
Source: Cogo Group’s annual reports

Similar to the situation of Cogobuy now, we see a rapidly increasing inventory and account
receivables, which are very obvious starting from 2008. For example, inventory increased for 52.5%
and 71.5% in 2009 and 2010 respectively, which are significantly higher than the growth rate of
sales and net income in the same period. We can conclude that the use of account receivable
and inventories to explain missing cash is a consistent trick used by Mr. Kang.

Consecutive Twelve years of Zero Dividend Record

Zero dividend has been Mr. Kang’s dividend policy for twelve years already. Cogobuy has not
distributed any dividend since it was listed in Hong Kong albeit its spectacular growth. As expected,
Cogo Group has also not declared any dividend since its reverse takeover in 2004.

If you are fortunate enough to have purchased Cogo Group’s share in 2004, you will end up
with a worthless paper of the share of its OTC stock for supporting Mr. Kang for more than
10 years and find Mr. Kang repeating the same trick in another place. You should expect
the same if you have invested in Cogobuy now.

Given the abnormal profit, rapid growth rate, huge difference between cash flow and net income,
and the consistent zero dividend policy, we strongly doubt the genuineness of Cogobuy’s net profit.

Of course, for the zero dividend policy, Cogobuy management will argue that they have been
actively doing share repurchase instead, citing the attractive share price of the Company as always.
But we found out that the repurchase program is likely a way of stock price manipulation and
funneling the Company’s money back to Mr. Kang himself. Following we will investigate its share
repurchase program.

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Part 5. Mysterious Share Repurchase: Two-third of the largest share repurchased come
from two accounts

Skeptical reader may point out that Mr. Kang has not reduced his shareholding since IPO, and
Cogobuy has been actively doing share repurchase (which is also the reason Cogobuy used for
not distributing dividend for years) and therefore Cogobuy may not be a fraud. However, our
following analysis show that shares for these share repurchase mainly come from a few accounts,
and the repurchase brought enormous profit to these account holders.

The share price of Cogobuy has been very impressive since its IPO. Its IPO price in 2014 July is
HKD 4.00 but now the share price has already surged over HKD10.0:

Exhibit 38: Share Price of Cogobuy since IPO
Price (HKD) Turnover (mn)
18 500.0
14 400.0
4 100.0
0 0.0



Turnover (Right Axis) Closing Price (Left Axis)
Source: HKEx

To understand the story behind the share price and share repurchase, we have to rely on data
from Central Clearing and Settlement System (CCASS), the depository system for Hong Kong listed
shares. Share has to be deposited in CCASS in order to settle trades on the exchange, and the
holding held by each broker and custodian under CCASS on each settlement day is publicly
available, which can be found on HKEx or other websites such as However, it
should be noted that CCASS can only show the broker or custodian’s holding, but not the client
of the broker or custodian who owns the share. But still, we can sometimes detect some unusual
activities of a stock such as high concentration by looking at the CCASS holdings. Now let have a
look at the CCASS movement of Cogobuy.

On its first trading date, i.e. 2014 July 18, the top five CCASS holders of Cogobuy were as follow:

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Exhibit 39: Top 5 CCASS Holders on 2014 Jul 18
# Broker Holding Stake (%)
1 HSBC 60,919,000 4.43%
2 Morgan Stanley 53,581,600 3.90%
3 First Shanghai 42,396,000 3.09%
4 JPMorgan 25,913,400 1.89%
5 Haitong International 24,591,000 1.79%
Source: HKEx, Webb-site

First Shanghai is neither a bookrunner in Cogobuy’s IPO nor a very popular broker among retail
investors. Such a large holding implies that there is likely a major investor (let call him investor X)
in Cogobuy’s IPO behind the holding of First Shanghai. Investor X’s holding has not changed much
until 2016 June.

First Sales of Shares in 2016 June and July
The first sales of shares of investor X is in 2016 June and July. From CCASS, we can see that investor
X’s holding decreased significantly from 40.11 mn shares on 2016 Jun 24 to 35.42 mn shares on
2016 Jul 6, when the share price is around HKD 12.00. The estimated proceed (based on closing
price) from sales of share is HKD 57.41 mn and the estimated profit is HKD 38.62 mn. The sales
should be conducted in market since the trading volume increased significantly during that period.

Exhibit 40: Investor X’s estimated profit from 2016 Jun 24 to Jul 6
First Shanghai's Holding as of 2016 Jun 24 40,111,000
First Shanghai's Holding as of 2016 Jul 6 35,415,000
Decrease in First Shanghai’s Holding 4,696,000
Weighted-average Price (HKD) 12.23
Est. Proceeds from Sales of Share (HKD) 57,408,740
Cost of Share (@IPO Price HKD4.0 per share) 18,784,000
Estimated Profit (HKD) 38,624,740
Source: HKEx

Second Sales of Shares in 2016 September
On 2016 Sep 1, Cogobuy announced trading halt at 9:58am. It then announced that there will be
placing of new share at 9:30pm. Investor X, seems to be well prepared of this event, already moved
its 10 mn shares from First Shanghai to Shenwan Hongyuan Securities (“SWS”) before the
Exhibit 41: CCASS holding change on 2016 Sep 1
First Shanghai SWS
Holding on 2016 Aug 30 35,286,000 1,224,000
Holding on 2016 Sep 1 25,286,000 11,371,000
Change -10,000,000 10,147,000
Source: HKEx

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On the next day (2016 Sep 2), although not stated in the official announcement, Cogobuy
disclosed to media that several banks and insurance firms participated in the placement.16 Due to
the positive news, the share price raised 3.0% to HKD12.90 on next day. And almost immediately,
most of the 10mn shares transferred to SWS were sold that month:

Exhibit 42: SWSs' estimated sales of Cogobuy Share in 2016 September

Est. Number of Shares Sold Est. Accumulative Proceeds
(thousand) (HKD mn)
1,200 120

1,000 100

800 80

600 60

400 40

200 20

0 0
01/09/2016 06/09/2016 09/09/2016 14/09/2016 20/09/2016 23/09/2016 28/09/2016
-200 -20

Est .Number of Total Shares Sold / Bought (Left Axis)
Est. Accumulative Proceeds from Sales of Share (Right Axis)

Source: HKEx; Estimation based on CCASS decrease of holding
Note 1: On 2016 Sep 28, 9.30mn shares were further moved from First Shanghai to SWS and is excluded in
our calculation
Note 2: Proceeds from sales of share is estimated by number of shares sold multiplied by the closing price
of share on that day

Exhibit 43: Investor X's estimated profit in 2016 September
No. of shares sold by SWS in 2016 Sept 8,186,000
Weighted-average Price (HKD) 12.71
Est. Proceeds from Sales of Share (HKD) 104,015,720
Cost of Share (@IPO Price HKD4.0 per share) 32,744,000
Estimated Profit (HKD) 71,271,720

We can observe from above that investor X sold 8.19mn shares through SWS with an estimated
profit of HKD 71.3 mn in 2016 September after the placement news was announced.

So far, we have only showed that investor X has made a good profit (HKD 109.90 mn) on Cogobuy
stock and may be well informed of Company’s news. Since both sales do not overlap with the
share repurchase of Cogobuy, we can at most say that investor X benefit indirectly from the share
repurchase before, but nothing more. Now, let see how investor X intersects directly with the
largest share repurchase of Cogobuy.

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Third Sales of Shares from 2016 Oct to Dec and the Largest Share Repurchase

Cogobuy has been frequently conducting share repurchase, always stating that the share price of
Cogobuy was very attractive. Cogobuy has used a total of HKD 571.11 mn in share repurchase.
Below is the detail of Cogobuy’s share repurchase since its listing:

Exhibit 44: Details of Cogobuy's Share Repurchase
Purchase Price
Month # of Share Repurchased Cost (HKD) Max Min Average
Dec-14 1,955,000 7,833,000 4.10 3.90 4.01
Jan-15 15,791,000 67,760,000 4.43 4.08 4.29
Feb-15 7,899,000 32,603,000 4.50 3.95 4.13
Jul-15 200,000 980,000 5.00 4.83 4.90
Jan-16 3,075,000 24,824,000 8.28 7.90 8.07
Feb-16 1,437,000 11,650,000 8.30 7.92 8.11
May-16 5,416,000 57,639,000 10.96 10.50 10.64
Oct-16 4,536,000 55,088,000 12.30 12.04 12.14
Nov-16 7,632,000 91,533,000 12.50 11.42 11.99
Dec-16 17,083,000 200,849,000 12.00 11.22 11.76
Jan-17 1,215,000 13,340,060 11.70 10.32 10.98
Feb-17 668,000 7,009,240 10.80 10.30 10.49
Total 66,907,000 571,108,300
Source: Cogobuy's annual reports, interim reports and announcements
Note 1: The actual cost of share repurchase in 2017 Jan and Feb is not yet announced, and
therefore we estimate the cost based on average of maximum and minimum daily purchase
price disclosed

It is suspicious that Cogobuy continue to do share repurchase even when the share price reached
HKD 12 instead of distributing dividend directly. Once Cogobuy completed its placement in 2016
September with a net proceeds of HKD 2,000 mn, it already started its share repurchase program
again at a purchase price as high as HKD 12.50 per share (The placement price is also HKD 12.50.
Why Cogobuy repurchase share at HKD 12.50 just after doing a placement at HKD 12.50 per
share?). The largest share repurchase of Cogobuy happens from 2016 Oct 28 to 2016 Dec 31,
which used HKD 347.47 mn and is highlighted above.

How does this share repurchase intersect with investor X? As you may expect, investor X has again
sold a large chunk of its share during that period. If you look at CCASS, investor X has been using
both First Shanghai and Standard Chartered account to sell the share. Since he has moved part of
the share to Standard Chartered (On 2016 Dec 1, 6.95 mn share was moved to from First Shanghai
to Standard Chartered), we aggregate the holding reduction for First Shanghai and Standard
Chartered together, and found out that the two brokers have reduced a total of 20.06 mn shares
with an estimated proceeds of HKD 240.15 mn during the above period:

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Exhibit 45: Share Repurchase v.s. First Shanghai & Standard Chartered
Estimated Sales of Cogobuy Share from 2016 Oct to Dec
Est. Number of Shares Sold Est. Accumulative
(thousand) Proceeds (HKD mn)
5,000 300
4,000 250
3,000 200
2,000 150
1,000 100
0 50
-1,000 07/11/2016 15/11/2016 23/11/2016 01/12/2016 09/12/2016 19/12/2016 29/12/20160

No. of Repurchase Share (Trade Date, Left Axis)
Est. No. of Total Shares Sold (Bought) by First Shanghai and Standard Chartered (Left Axis)
Est. Accumulative Proceeds from Sales of Share (Right Axis)

Source: HKEx, Webb-site Estimation based on CCASS decrease of holding
Note 1: On 2016 Dec 1, 2.4 mn share was moved from Sinolink Securities to Standard Chartered and is
excluded in our calculation
Note 2: Proceeds from sales of share is estimated by number of shares sold multiplied by the closing price
of share on that day

To our astonishment, the shares sold by Investor X through First Shanghai and Standard
Chartered together already accounts for around two-third of the share repurchased by
Cogobuy during the same period:

Exhibit 46: Investor X's estimated profit from 2016 Oct to Dec
First Standard
Shanghai Chartered
Holding on 2016 Oct 31 12,962,000 46,745,522 59,707,522
Holding on 2017 Jan 4 2,181,000 39,871,345 42,052,345
Decrease in holding 10,781,000 6,874,177 17,655,177
Adj. for Sinolink 2.4 mn transfer on 2016 Dec 1 2,400,000 2,400,000
Est. No. of Shares Sold 10,781,000 9,274,177 20,055,177
Weighted-average Price (HKD) 11.91 12.05 11.97
Est. Proceeds from Sales of Share (HKD) 128,368,380 111,784,767 240,153,147
Cost of Share (@IPO Price HKD 4.0 per share) 43,124,000 37,096,708 80,220,708
Profit (HKD) 85,244,380 74,688,059 159,932,439

Share Repurchased by Cogobuy during the
same period
No. of Selling Shares / Share Repurchased
36.9% 31.7% 68.6%
by Cogobuy during the same period (%)
Source: HKEx, Webb-site

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The full calculation table can be found on Appendix. Combining the three sell-down, it can be
seen that investor X already sold majority of the share at a high price with a profitability that is
almost unparalleled in the market:

Exhibit 47: Estimated Profit for Investor X (HKD unless otherwise specified)
Est. Est.
Est. No. of
Details Est. Cost Proceeds Est. Profit Return
Shares Sold
from Sales (%)
First Sales of Shares
4,696,000 18,784,000 57,408,740 38,624,740 205.6%
(2016 June and July)
Second Sales of Shares
8,186,000 32,744,000 104,015,720 71,271,720 217.7%
(2016 September)
Third Sales of Shares
20,055,177 80,220,708 240,153,147 159,932,439 199.4%
(2016 Nov to 2017 Jan)
Total 32,937,177 131,748,708 401,577,607 269,828,899 204.8%

Some readers may point out that the share repurchase does not exactly overlap with the sales of
share from First Shanghai and Standard Chartered. But bear in mind that there is no need of exact
matching. The only need for the share repurchase is to maintain the share price at a high level,
such that investor X can sell his shares at a high price. For example, investor X can first sell his
share to a retail investor in open market who later sell back the share to Cogobuy in share
repurchase. We believe it is impossible to maintain the share price at such a high level when
investor X sold over 20 mn shares if Cogobuy has not conducted the large-scaled share
repurchase during the same period.

It may be argued that the holder of Standard Chartered account is unrelated to investor X, and
investor X may just sell its share to the Standard Chartered account holder on 2016 Dec 1. But
that is unimportant, since it is already highly abnormal that two or few account holders can
constitute 68.6% of a share repurchase, which supposed to be conducted in open market.
We believe that the share repurchase is likely a scheme to funnel proceeds from placement
into friendly accounts of Mr. Kang.

We challenge the management to disclose (i) the details of share repurchase, including the
source of shares on each day breakdown by brokers, and (ii) the identity of investor X and
his relationship with Mr. Kang. We also urge SFC to investigate the above share repurchase
to see if there is any insider dealing or market manipulation.


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Part 6. The Infamous History of Cogo Group in U.S.

Cogobuy is not the first listed company owned by Mr. Kang. Majority of the assets of today
Cogobuy came from its former entity, Cogo Group, which was listed in NASDAQ, known as
Comtech Group, Inc., Cogo Group, Inc. and Viewtran Group, Inc. (COGO.US/VIEW.US). Comtech
Group, Inc. went public through a reverse merger in July 2004, changed its name to Cogo Group,
Inc. in May 2008, undergo redomestication from Maryland to Cayman Islands in August 2011 and
further changed its name to Viewtran Group, Inc. in November 2013.

Price (USD) Exhibit 48: Share Price of Cogo Group since listing Turnover
25 8,000,000
15 5,000,000
10 3,000,000
0 0

Turnover (right axis) Closing Price (Left Axis)

Source: Bloomberg

Numerous Sales of Share by Mr. Kang

Shortly after being listed through a reverse merger, Mr. Kang, together with his brother Mr. Yi
Kang, started to dispose a substantial amount of their shareholding in Cogo Group when its stock
price rising rapidly, receiving around USD 72.8 mn of cash in just 3 years from 2005 to 2007.
Cogo Group has been announcing many positive news to simulate the share price with an
unparalleled performance during the same period. The table below indicated the change in
shareholding of Mr. Kang and Mr. Yi Kang from 2004 to 2007.

Exhibit 49: The reduce in shareholding of Mr. Kang and Mr. Yi Kang in Cogo Group
2004 2005 2006 2007
Mr. Kang’s Shareholding 72.6% 47.1% 32.8% 26.4%
Mr. Yi Kang’s Shareholding 0.0% 0.0% 8.1% 6.0%
Total Shareholding 72.6% 47.1% 40.9% 32.4%
Source: SEC filings of Cogo Group

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Suspicious Acquisition with High Premium

Starting from 2006, Cogo Group used a substantial amount of money raised to buy companies
with a huge amount of goodwill and intangible assets. Moreover, none of the announcements of
these acquisitions tell investors the past profitability of the targets on a stand-alone basis. Below
is a list showing major acquisitions made from 2006, which are all questionable in our opinion.
We believe the Company is making acquisitions at an unreasonable price to explain the missing
cash of Cogo Group (Please refer to “Same Story for Cogo Group: RMB 990mn of disappeared
cash” under “Part 4. RMB 1.9 billion of Disappeared Cash”).

Exhibit 50: Cogo Group’s various acquisitions’ net asset acquired, goodwill and intangibles
Net asset acquired Goodwill Intangibles
Date Target
2006 Viewtran Technologies 58,529,000 42,428,000 14,756,000
2006 Shanghai E&T 16,000,000 4,264,000 5,467,000
2007 Comtech Broadband 113,193,000 47,561,000 74,578,000
2007 Keen Awards 63,032,000 - 73,007,000
2008 Longrise 60,921,000 21,422,000 34,547,000
2009 Mega Smart Group 122,415,000 80,226,000 50,526,000
2011 MDC Technologies 144,372,000 61,509,000 99,237,000
Source: SEC filings of Cogo Group

Most of the above acquisitions are suspicious with a high premium and large intangible. For
example, Cogo Group once disclosed Mr. Kang has controlling interest in Viewtran Technologies
in its 2005 10-K filing but then was silent with this when announcing the acquisition of Viewtran
in 2006 with a high premium. Another shocking example is Comtech Broadband, which is still a
subsidiary of Cogobuy today:

Comtech Broadband: Funneling RMB 113 mn Cash out of Cogo Group

The history of Comtech Broadband goes back to 2004 Dec. In 2004 Dec, Cogo Group signed an
agreement with Broadwell Group to establish a joint venture, which is Comtech Broadband, to
“serve as an independent distributor promoting IC's and components into China market”. Initially,
Cogo Group owns 55% of the share and Broadwell Group owns 45% of the remaining share. The
total investment of the JV company is only HKD 1 mn at that time. Broadwell Group is a BVI
company with undisclosed background, with the addressee of “Steve Deng”.

Then in 2007 August, Cogo Group acquired the remaining 45% of the share from Broadwell Group
at RMB 113.19 mn, giving Comtech Broadband a whopping valuation of RMB 251.54 mn. Broad
Wise Holdings Limited, the wholly owned subsidiary of Broadwell Group, owns the shares of
Comtech Broadband directly:

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Exhibit 51: Description on the acquisition of Comtech Broadband 45% share

Source: 8-K Report filed by Cogo Group

Three years later in 2010 December, Cogo Group mysteriously awarded 30% share of Comtech
Broadband for free to an undisclosed employee:

Exhibit 52: the share-based compensation of Comtech Broadband

Source: Cogo Group’s 2010 Annual Report

If using the same valuation in 2007 acquisition, the share is worth RMB75.46mn. However, from
above disclosure, the fair value of the share is just USD 4.8 mn (dollar figures are in thousands for
the exhibit above), indicating the valuation of Comtech Broadband is USD 16 mn, or RMB 105.6
mn, only 42.0% of the valuation when it acquired the 45% interest. The identity of this mysterious
employee was widely questioned by U.S. investors at that time but of course was never answered.
The mystery was finally solved by Cogobuy’s prospectus four years after:

Exhibit 53: the description of Broadband Corporation (i.e. Comtech Broadband) on Cogobuy’s

Source: Cogobuy’s prospectus Pg. 79

Here we shockingly see Broad Wise Holdings Limited and Mr. Deng again, the seller of the 45%
interest back in 2008. In short, Mr. Deng used HKD 0.45 mn to establish a JV with Cogo Group,
and sold his 45% shares back to Cogo Group at RMB 113.19 mn. Three years later, Cogo Group
gave back 30% share to Mr. Deng for free. It seems the only point of the operation is to funnel
cash out of Cogo Group. Mr. Deng is now the vice president of Cogobuy, and Comtech Broadband
is a subsidiary of Cogobuy with Mr. Deng still holding 30% of it.

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The majority other acquisitions are with a similar nature: undisclosed sellers, high valuation, large
intangibles and goodwill. We believe that most of these transactions are just related party
transaction to explain the missing cash or funnel cash out of the company.

Please note that Hope Ni, the CFO of Cogo Group since 2004 who oversaw all these suspicious
transactions, is now promoted to the Executive Director and Chief Investment Officer of Cogobuy.
And Allen Wu, the vice president of finance at Cogo Group since 2003, is now promoted to the
Executive Director and CFO of Cogobuy. Besides Mr. Kang, they are currently the only executive
directors of Cogobuy. There is no industry expert (except Mr. Kang if you count him, but we
consider him more of a financial expert) among the executive directors. It seems that Mr. Kang
really appreciates these financial experts’ efforts contributed in Cogo Group, and you
should now understand why there are so many similarities between the tricks used by Cogo
Group and Cogobuy.

The Ending of Cogo Group: A worthless paper

After the start of financial crisis in 2008, share price of Cogo Group dropped significantly and Mr.
Kang stopped disposing his shareholding. Cogo Group then initiated the above mentioned
redomestication from Maryland to Cayman Islands to facilitate its future capital market movement
(Sale of all or substantially all the assets of the Company requires approval by the affirmative vote
of two-thirds of all the votes in Maryland while there’s no such requirement for companies in
Cayman Islands). Mr. Kang has also tried promoting the new concept of Cogo 3.0, an online
platform for IC trading, to simulate share price but to no avail. Shortly after the redomestication,
Cogo Group sold a substantial part of its subsidiaries (representing approximately 32% of the
Company’s total revenue) to Mr. Kang for a total consideration of just USD 78 mn in November
2012. In 2013, Cogo Group again sold a substantial part of its remaining subsidiaries (representing
approximately 30% of the remaining net assets and generate 98.7% of the Cogo Group’s revenue
in Q1 2013) to Mr. Kang for a total consideration of USD 80 mn. The two acquisitions made up a
major part of the Cogobuy now and you may realize the huge difference between the acquisition
price and current market cap of Cogobuy.

Despite Mr. Kang claimed to have no intention of dissolving Cogo Group or going private, after
filing a form to SEC stating that the company is unable to timely file 20-F due to inability of
completing valuation of certain intangible assets (they even quote receiving a letter from NASDAQ
stating that Viewtran is not in compliance with listing rules as a reason for delisting), and Cogo
Group was finally delisted from NASDAQ in 2015. Today Cogo Group is still trading at the highly
illiquid OTC Bulletin Board with a share price lower than USD0.1, having more than a hundred
times difference with its historical high price of USD22.15 in October 2007.

We believe such track record will give you a rough idea on Mr. Kang’s style, and Cogobuy is no
different from Cogo Group. We have already observed many aspects of Cogobuy that is
strikingly similar with Cogo Group, such as the use of popular concept to inflate share price
(Cogo 3.0 versus IngDan now), use of receivables and inventory to explain missing cash,
zero dividend policy, unusual growth rate, same management etc. Similar to Cogo Group,
we expect that Mr. Kang will start to dispose his shareholding very soon, or he may already
start doing so through the suspicious share repurchase (Please refer to “Part 5. Mysterious
Share Repurchase: Two-third of the largest share repurchased come from two accounts”).
We believe that investing Cogobuy today is just similar to investing in Cogo Group ten years
ago, which will only leave you with a worthless paper.

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Part 7. A Share Placement with Guaranteed Return but still attract no Industry Investor17

As mentioned previously, Cogobuy has completed a placement of new shares on 22 September
2016, just before starting the large-scaled share repurchase program. Management always hails
this placement as an indication of Cogobuy’s strong performance, but we think it exactly shows
the opposite if you look at the detail of the placement.

This placing was first announced on 20 May 2016 where the Company entered into a
memorandum of understanding with Da Cheng International Asset Management (“Da Cheng”),
pursuant to which Da Cheng has conditionally agreed to subscribe between 124,800,000 and
187,200,000 new Shares at a price of HKD 12.5 per Share. At the same time, Mr. Kang also entered
into a memorandum of understanding with Da Cheng agreeing that Da Cheng has an option to
sell the Placing Shares to Mr. Kang at HKD 12.88 per share on the last day of the three-year
period after entering into Placing Agreement.

Three months later, on 1 September 2016, the Company subsequently announced that it entered
into Placing Agreement with Hong Kong International Securities Limited such that Hong Kong
International Securities Limited agreed, on a best effort basis, to procure not less than six
independent placees to subscribe for up to a total of 270,466,900 new Placing Shares (16.67% of
the then enlarged share capital), at a price of HKD 12.5 per Placing Share. Similarly, Mr. Kang will
compensate the placees if the share price falls below HKD 12.88 per share on the last day of
a three-year period after entering into Placing Agreement.

Intuitively, one would think this is a placement with no downside unless Mr. Kang is bankrupt and
unable to honor his undertakings and therefore expect strong interest from institutional investors,
as well as industry players.

Shockingly, when the placement was completed on 22 September 2016, only 160,420,232 new
shares (10.6% of the then enlarged share capital; just 60% of the number of shares it
intended to place) were placed to placees including Da Cheng, National Pension service, Korea
Development Bank, Korea Teacher’s Credit Union, Korea Post, China Reinsurance (Group)
Corporation, The People’s Insurance Company (Group) of China, New China Asset Management
and Chongqing Liangjiang Automobile Industry Innovation Development Fund at a price of HKD
12.5 per share with Mr. Kang agreeing to compensate the placees if the share price falls below
HKD 12.88 per share on the last day of a three-year period after entering into Placing Agreement.
The investors are so careful that they even added the clause that if they sold the stock in market
six months before the last day, they can request Mr. Kang to compensate the difference to them.
It seems that the investors afraid that Mr. Kang just boost the share price up to HKD 12.88 on the
last day to avoid compensation.

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Exhibit 54: Compensation Arrangement of the Placement

Source: Cogobuy’s placing announcement on 2016 September 1, pg. 6

Apart from the significant shrink in offering size, if we look into the name of investors, one would
discover that there is no involvement of any industry players nor any institutional investors actively
investing in the technology sector, reflecting how the whole industry views Cogobuy. The fact that
two more placing agents, CCB International Capital Limited and ABCI Securities Company Limited,
had to be added in order to complete the transaction also reflects the low level of interest received
from investors.

Source: Cogobuy’s announcements on 2016 May 20, 2016 September 1 and 2016 September 22

Website: / Email:

In order to value Cogobuy, we would first estimate its true revenue and net profit in 2015. Then
we will apply the average P/E ratio of its IC distributor peers to arrive the final valuation.

As stated in the “Part 2. Significant Discrepancy in SAIC filings”, total PRC sales figure of Cogobuy
in 2015 on SAIC filings is only RMB 386 mn. Conservatively assuming only 10% of sales is settled
in China, total revenue of Cogobuy in 2015 would be RMB 3.86 bn.

Considering average net profit ratio of other IC distributor peers in 2015, which is around 1.8%,
we estimate net profit of Cogobuy in 2015 to be around RMB 69.48 mn.

At last, applying average P/E ratio of its IC distributor peers at approximate 10x, market cap of
Cogobuy should be around RMB 694.8 million, implying a share price of RMB 0.47, i.e. around
HKD 0.53 per share, representing a 95% drop from its closing price of HKD 10.00 as of 19 May

Exhibit 55: Valuation of Cogobuy
2015 total sales from SAIC filings (RMB million) 386
Estimated Cogobuy’s 2015 total sales (RMB million)
(Assuming 10% of sales are settled in China)
Average net profit ratio of other IC distributor peers in 2015 1.8%
Estimated Cogobuy’s 2015 net profit (RMB million) 69.48
P/E ratio of other IC distributor peers 10x
Estimated market cap of Cogobuy (RMB million) 694.8
Implied share price (RMB) 0.47
Implied share price (HKD) 0.53

The share price will even be lower if you apply a corruption discount to Cogobuy. And as we are
using relative valuation here, we implicitly assume that Cogobuy will distribute dividend as its
peers, which may not be the real case. Cogo Group is a good example to learn form.

In case Cogobuy’s share price drops to HKD 0.53 per share, Mr. Kang will have to compensate
around HKD 2 bn to investors three years after. We do not believe Mr. Kang will be able to repay
such a large sum and his potential bankruptcy may severely threaten continuity of Cogobuy’s
operations in the future.

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To conclude with, it is crystal clear that Cogobuy is just another bubble orchestrated by Mr. Kang
to dupe innocent investors. We believe Cogobuy worth at most HKD 0.53 per share, instead of
HKD 10.00 currently (as of 19 May 2017).

Of course Mr. Kang and his colleagues Hope Ni and Allen Wu are largely responsible for
Cogobuy’s fraud and we urge SFC to investigate these people, but we think that the current system
of Hong Kong IPO has its own flaw that we should reflect on:

Under Hong Kong IPO system, sponsor is supposed to conduct due diligence on every sentence
stated on prospectus, and investors believe a company’s prospectus partly because of the due
diligence work done by sponsor. However, we have seen certain sponsor principals, such as those
representing UBS, has done minimal due diligence during IPO. Many of the above findings, such
as low website traffic, can be easily observed if sufficient due diligence is done. But knowing the
fact that they can at most have their licenses revoked, certain sponsor principals sign numerous
deals without full due diligence such that they can earn a considerable sum and leave the security
industry afterwards. The new sponsor regime (which this case falls into) is supposed to fight
against such loophole. Under the new regime, the maximum penalty to sponsor principal is three
years of imprisonment for any material untrue statements in the prospectus. But the penalty we
have seen so far to sponsor principal is far from deterring such kind of activity and the
imprisonment punishment seems amount to nothing from the eyes of sponsor principle.

Given the disastrous track record of UBS, we urge SFC to use the rule from new sponsor regime
for the first time and the court to apply the maximum penalty of three-year imprisonment
to the sponsor principle responsible for this deal, even if he or she already left the industry.
A clear signal should be sent to the industry such that other sponsor principles should be deferred
from cooperating with fraudulent companies to dupe investors. Otherwise, these fraudulent IPOs
will continue in Hong Kong endlessly.

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Appendix A: The supply chain matching record on
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12 4/26/2017 13:10 forsafe

13 4/26/2017 12:42 智能锁硬件开发(电路原理图+PCB 板)设计(需要重新推荐)
14 4/26/2017 12:41 智能锁+云端+视频(13867652183)
15 4/26/2017 12:09 北斗明
16 4/26/2017 10:30 众康云 寻找一款智能手环接入 App,计步、心率,支持蓝牙 4.0ble
17 4/26/2017 10:22 dan_764e1771 需要寻找以下代理商日本:SHINDENGEN 新电元公司的型号是:K1V(A)16 需求量:21 万个
18 4/25/2017 22:16 我想设计一款带加热功能的护膝,主要功能为保暖功能。受众人群为久坐文职,行动不便老人。
19 4/25/2017 15:18 创远 做小型马达厂家,要求马达直径小于 6mm,长度在 20mm 以内,转速在 150 左右,3V 供电。
20 4/25/2017 15:00 andyqiu1973
盔方案的方案公司合作,提供方案设计,软件开发或者 PCBA 等
21 4/25/2017 14:13

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# Request Time User Demand
22 4/25/2017 13:24 诺诺 需要可以与智能手环联动的门禁锁和柜子锁
23 4/25/2017 12:47 上海埃萨 ipad 和 PC 无线连接及控制
24 4/25/2017 11:00 平板电脑方案:我们想用平板电脑来做我们的网管,需要加入我们的无线 433 模块及 485,请有设计能力的同仁联系!
25 4/24/2017 19:06 威士丹利赵岩 根据我司找的摄像头外壳,设计里面的方案,具有摄像头方案设计及生产厂家
26 4/24/2017 17:35 王永庆 线与红绿灯报警器连接成一个电路,人踩到边界上不报警,球落到到边界线上亮红灯。羽毛球比赛有单打和双打,两个
检查特殊环境的温湿度,安装 720 摄像头定时照相,并通过 3G 模块传输温湿度数据和照片,并能通过温度报警控制现
27 4/24/2017 17:29 王永庆 场的风机和水帘开关,要求温湿度传感器,摄像头,3 模块集成到一个即插即用的防水,防高温的盒子,温湿度探头可
以用连接线延伸到盒子外面,摄像头可以遥控,摄像头与温湿度传感器共用一个 3G 模块。
28 4/24/2017 17:02 goodoyo
29 4/24/2017 16:54 谭生 双体结构船体的遥控船,尺寸大约长 60cm,宽 45cm,高度 20cm.
30 4/24/2017 16:26 goodoyo 剪指甲时,指甲片不崩飞的指甲刀结构设计
31 4/24/2017 16:22 goodoyo 耐用的机械控制,精确调节人体感觉水温混水阀。
32 4/24/2017 15:14 Chanson2015
dan_2d06b430d 类似共享单车锁的智能锁,用户酒店公寓,提供动态密码,硬件设计,和接口。包括充电方案,解锁。app 可以远程解
33 4/24/2017 15:07
439 锁
34 4/24/2017 11:09 电子称重模块,工作环境运动状态的,称重之后要转为信号输出,要进行比对!
35 4/24/2017 10:29 想开发一款经络理疗仪,目前只完成了电路部分,需要工业设计资源对接,优先考虑浙江的资源,谢谢!
36 4/24/2017 10:29 想开发一款经络理疗仪,目前只完成了电路部分,需要工业设计资源对接,优先考虑浙江的资源,谢谢!
37 4/24/2017 10:09 dan_24t1fasf 需要一个电子挂件,有一定的设计,基于高通的 6085 平台。包含功能有:GPS 定位,基站定位,紧急电话呼叫按键。
38 4/24/2017 9:08 黑鹰 我们现在做的刷卡充电插座,现在需要扫码充电方案。谢谢
39 4/23/2017 13:19 cheng 采购一批高颜值高性能的安全外设包含(红外探测器、烟雾报警器、燃气报警器、漏水报警器、门磁)
40 4/21/2017 16:41 pblimo 需要一个声波传输方案:APP 发出声波,模块接收声波,解析声波信息,得出数据。
41 4/21/2017 16:02 dan_kmakoeep 需要开发商语音识别蓝牙音箱时钟灯,通过语音识别控制蓝牙音箱和灯。如果有语音交互方案也可以提供。

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# Request Time User Demand
42 4/21/2017 16:02 dan_kmakoeep 需要开发商语音识别蓝牙音箱时钟灯,通过语音识别控制蓝牙音箱和灯。如果有语音交互方案也可以提供。
需要做一个智能锁方案,有现成的最好,功能有指纹开锁、密码开锁、刷卡开锁、APP 开锁;如果可以想加上人脸开
43 4/21/2017 14:49 富土
44 4/21/2017 13:18 智能锁硬件开发(电路原理图+PCB 板)设计
1.基于树莓派,开发未来化家居控制系统的云服务方案是否可行 2.基于现代的嵌入式开发模式能否做到开发出来的产品
45 4/21/2017 11:46 走向市场 3.如果智能家居控制系统方案可行,那有没有可行性方案。4.市场现在的需求和走势是否能够支撑这个想法能
原型产品工作演示视频: 本公司将进行一系列拥有自有知识产权的外观
46 4/21/2017 3:16 设计、机械构建,以及智能化的研发工作,致力于打造一款可由 WiFi 远程控制的智能宠物猫厕产品。本文档只涉及智
47 4/20/2017 18:13 dan_a4e855ae 想批量采购智能小机器人,对产品功能有定位,有小视屏说明,直接采购成品。
48 4/20/2017 18:03 dan_a4e855ae 采购智能机器人
7.85 寸电容式多点触摸屏透光率:>=86%表面硬度:6H 工作环境:-20 度-+70 度,<=90%RH 存贮环境:-30 度-
49 4/20/2017 16:51 火石信科
+80 度,<=90%RH
50 4/20/2017 16:16 dan_6crgj38m 想设计一款带触摸屏的智能机器人,外观想法基本有了,需要找专业人员进行下一步完善,最好是能提供全程服务。
51 4/20/2017 15:45 张扬 需要智能手环生产成品供应商
52 4/20/2017 14:55 麦甜 比较高的平台例如 MTK,可实现刷卡考勤、GPS、蓝牙、4G 网络、拍照、语音播报等功能。我们自己做服务器和考勤
机及手机上的 APP。
53 4/20/2017 9:17 wifi 智能远程控制方案(新风净化)
54 4/19/2017 23:09 dan_y9zk952b
需要设计一个智能佛珠,佛珠直径大概在 18mm,里面内置芯片,能够自动计数,传输到 APP 中。计数装置可以设计
55 4/19/2017 23:05 dan_e28de01b
56 4/19/2017 20:41 一款具有科技风格,炫彩灯光的玩具车

57 4/19/2017 14:56 郭生 全热交换芯(纸质)六边形边长 150mm,长边 380mm*宽边 200mm*高 80mm
58 4/19/2017 10:17 潜龙 想设计一款声控门锁,通过语音让门打开

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# Request Time User Demand
59 4/19/2017 0:32 合金小马 出小型罐头花 4、高度 35-40CM,长宽按设计决定 5、需设计两个通风口,安装小型风机(直径 3-4CM),不能在同
dan_826a22f40c 垃圾真空收集系统组成部件:垃圾投放口-阀门-垃圾缓存罐-阀门闸-研磨粉碎机-螺杆脱水推送装置-PLC 中央控制柜-真空
60 4/18/2017 21:27
b9 泵-空压机,以上节点用西门子 PLC 中央控制柜控制采用真空负压原理通过 304 不锈钢管输送垃圾
61 4/18/2017 21:16 真空泵.垃圾缓存罐.空压机.研磨粉碎机.脱水推送装置.西门子 PLC 中央控制柜.除臭过滤器.304 不锈钢管.阀门闸.
62 4/18/2017 21:15 Jeff Xu pcb,原理图,bom 文件齐全
公司因业务需要需开发一款硬件设备,订单总量约 30 万台,望能与专业硬件厂商长期合作。产品描述:1、产品为一款
63 4/18/2017 16:02 用于收银的采集盒子,连接 POS 收银机和小票打印机。2、产品能扫描条码和二维码,并发送到指定服务器。3、产品
可通过手机卡、wifi、网线连接互联网。4、产品可进行 gps 定位
64 4/18/2017 14:33 Jeff 寻东莞横沥周边优质植绒 EVA 供应商
65 4/18/2017 14:29 Jeff 寻植绒 EVA 优质供应商资源
66 4/17/2017 17:58 dan_klq87c3m 需要开发一个物联网的东西,需要硬件和软件,在杭州想找本地的
67 4/17/2017 17:54 急找一家生产笔记本滑板车控制器的供应链厂家,有 App,有成熟方案己量产,请速与我联系
开发一款遥控探鱼小船,遥控距离 1 公里以上,具有声纳探鱼功能,能在遥控器上显示鱼情水情,具有 gps 定位导航功
68 4/17/2017 15:49 谭生
69 4/17/2017 9:33 需要有一个物品识别模块,物品识别的过程是在运动的,主要目的是在于检验扫码物品跟取出物品是否一致。
70 4/14/2017 21:00 自行车生产厂家,能设计和制造出放车后备箱的折叠自行车。
dan_1a0bacc6e9 公司因业务需要需开发一款硬件设备,订单总量约 30 万台,望能与专业硬件厂商长期合作。产品描述:1、产品为一款
71 4/14/2017 16:11
6e 用于收银的采集盒子,连接 POS 收银机和小票打印机。2、产品能扫描条码和二维码,并发送到指定服务器。
72 4/14/2017 12:21 智能消毒设备生产
73 4/14/2017 12:21 消毒设备结构设计!
新型超声波牙刷 1)电池模块 2)⾼ 高频电机模块 3)⾼ 无线充电模块 4)压强感应开关模块 3)充电单元 1)⾼ 无线充
74 4/13/2017 20:19 dan_6718d691
电模块 2)变压器器模块 3)紫外线灯及感应模块(备选)

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# Request Time User Demand
75 4/13/2017 17:16 HUD 含微信、电话、手势控制、蓝牙传输,OEM 生产厂家
76 4/13/2017 16:09 Dasion Zoran 急需,带指纹的电子班牌成品,颜值要高,满足条件的请联系我。
设计一款投影仪,可用于车载投影,投放在后挡风玻璃或者侧挡风玻璃上。内容可通过无线传输下发,可 GPS 定位,可
77 4/13/2017 16:06 天马行空
78 4/13/2017 15:25 happycool333 我需要一个手环设备,采集加速度计、陀螺仪的数据,采样频率 50-100hz,带安卓 app,可以把数据保存手机端。
可以集成 zigbee 的人体红外感应器,低功耗不需要固定电源,外观美观,安装便捷。参照小米的人体红外感应器。感
79 4/13/2017 15:25 happycool333
我们需要一个机器人的硬件平台,带有摄像头,屏幕,麦克,喇叭,支持 wifi,桌面版机器人,参照小鱼在家那样,最
80 4/13/2017 15:22 happycool333
好是 linux 平台,andriod 也可以。
81 4/13/2017 11:41 dorcg
82 4/12/2017 20:49 dan_c81f2a9a
能,需要有一定研发实力的方案商,最好是 android 系统,有语音互动开发经验。
83 4/12/2017 18:11 muttofan 开发 OA 系统 IOSAPP 端
84 4/12/2017 10:22 电动车,电动巡逻车,景区电动车,厂商
85 4/11/2017 18:11 Rayman999 想寻找海外市场的当地售后服务商对接,急需美国,其他地区需求不急,产品为音响。
86 4/11/2017 16:49 shande 为 12V30A 输出至工作仪器上,要求有定位、工作状态等,软件部分要求有微信等支付、后台管理、大数据分析等等强
基于 USB/串口/蓝牙接口的语音识别模块:(1)配合对应软件和知识模板库,可直插在柜员机等自助终端使用,进行
87 4/11/2017 16:03 zhxiaolg 人机语音交互;(2)使用场景:公共办事大厅,如工商局、出入境办事大厅的自助终端等;(3)拾音距离约 1 米以
内,拾音波束区域约±45 度以内,有较高的去混响、回声消除性能等
88 4/11/2017 11:57 windist 需要采购电子产品上的各种小螺丝
89 4/11/2017 11:32 daxiang 吹塑工具箱加工制作
90 4/10/2017 18:51 jerry 寻 wifi 灯泡的方案商,能开发高通方案,性能稳定,年预计 500K 左右。有意可联系 jerry—13428958065。
91 4/10/2017 14:28 未典科技 因为产品内部空间局限,询同等功能参数下小尺寸元器件,元器件包括,共模电感,变压器、电容,电感等。
92 4/10/2017 10:34 寻找全志 R16/A20 等芯片的 ARM 平台供应商。

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93 4/9/2017 20:56 寻找做带辐射功能手环的厂家
94 4/9/2017 20:12 合金小马
像和拍照;4、有实体按键实现1和2 5、有手机APP来控制123
95 4/7/2017 14:31 dorcg
需要语音体感摄像头的方案:搭配 AR/VR/MR/语音/体感互动内容•同时支持 Windows 与 Android 环境(适用于幼儿园
96 4/7/2017 13:13 jerry 一体机/智能电视/电视盒+电视)•高清摄像头•高灵敏度麦克风•提供互动设计 SDK,方便二次开发。年预计 10K。有意向
请联系:硬蛋 jerry13428958065.
项目需要以下智能硬件:1.温湿度\光照\CO2 传感器:具备 2.4Gzigbee,当数值超过报警限值,立即发送给主机,数据每分钟
97 4/7/2017 11:52 上传一次到网关 2.智能开关具备 2.4Gzigbee,可实现网关控制智能开关 3.通讯网关具备以太网通讯,有线\无线 Wi-
Fi,2.4GHzZigbee 提供 SDK,支持 TCP/IP,HTTP 等功能
dan_ad39d1b2c 现有需求寻找合作厂家,做基于 NB-IOT 的烟感,温感和水感产品,我们提供芯片模组和物联网平台,合作厂家提供传
98 4/7/2017 11:25
23a 感器产品和传感器应用平台。
99 4/7/2017 11:17 miswaytech 采购按键焊盘四个点内径 1.9*3.2mm 外径 3.5*5.2mm 符合此要求的按键请提供具体尺寸规格不要锅仔按键
dan_wqspbmqy 寻找智能手环方案及供应商,功能含室内定位、活动轨迹、越位预警、身份标志、门禁感应、信息存储、充值丶扣费等
100 4/6/2017 18:17
9jzc 功能。有意合作请联络我们.
101 4/6/2017 17:04 Will Wang
102 4/6/2017 17:00 mxtonx 儿童手表,有 GSM,有 GPS 定位。最好有摄像头。价格越低越好。
103 4/6/2017 12:33 开放统一的接口,供我们开发的 App 对接,接口有拓展性,可以和目前主流,大品牌智能硬件对接。另,智能硬件厂商
104 4/6/2017 11:07 需要能提供高质量 VR 绑带的厂家,头戴显示器上的绑带。
105 4/6/2017 9:42 希望提供国内目前市面上尽可能多的激光雷达厂家,供我们进行各项评估。
想找一个可一键 sos,人体死亡报警,燃气泄漏报警的硬件方案,用于独居老人的屋子,有这样的方案和能力,马上联
106 4/6/2017 9:34 富土
107 4/5/2017 14:27 mxtonx 空气检测类设备,PM2.5 和甲醛测试的整机或方案。都要真数据,甲醛不要用 voc 传感器计算的。

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108 4/5/2017 10:09 dan_c81f2a9a
通过波段旋钮开关来控制几个带变速箱的 DC 电机,主要控制:旋转一天的圈数,旋转的方向,方向分左转右转,或者
109 4/5/2017 3:52 marco
左右交替。24 小时至,比如 900 转一天,它会自动转一会,停一会。需要开发的就是整个线路板和程序。
110 4/4/2017 20:26 深圳失地农民 桌面无线充+typeC 快充
111 4/4/2017 11:52 脑海里 需要一块广告机安卓板,需要 4G、宽带、wifi 联网功能。FM 射频接收功能。触摸屏功能,
112 4/1/2017 16:06 windist 台系的 4007 的无框支架风扇
113 4/1/2017 15:45 郭生 全热交换芯(纸质)六边形边长 150mm,长边 380mm*宽边 200mm*高 80mm
114 4/1/2017 15:39 miswaytech BSCI 认证工厂
115 4/1/2017 15:37 miswaytech 迷你蓝牙耳机圆柱型聚合物电池
dan_930f1f40de 需要开发一款计时器的单片机定制程序,单片机是要直接绑定在 PCB 板上的,由 4 个按键控制一块 LCD 屏上的计时规
116 4/1/2017 14:16
14 则,功能比较复杂。
需要寻找一款智能手表,最好是安卓的,用于居家健康管理服务载体,具备 SOS、心率、计步。需要对接一些健康监测
117 4/1/2017 11:40 众康云

Source:, as of 2017 May 8

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Appendix B: Cogobuy’s Share Repurchase and First Shanghai & Standard Chartered Estimated Sales of Cogobuy Share from
2016 Oct to Dec
Est. No. of
Closing Total Shares
No. of First Standard First Standard Proceeds
Price Vol. Sold (Bought)
Holding Trade Repurchase Shanghai Chartered Shanghai Chartered from Sales
(HKD, (Trade in market by
Date Date Share (Trade CCASS CCASS CCASS CCASS of Share
Trade Date) First Shanghai
Date) Holdings Holdings Decrease Decrease (HKD)
Date) and Standard
11/1/2016 10/28/2016 2,198,000 12.22 4,831,000 12,962,000 46,549,522 0 196,000 196,000 2,395,120
11/2/2016 10/31/2016 2,338,000 12.12 5,254,518 12,962,000 46,351,504 0 198,018 198,018 2,399,978
11/3/2016 11/1/2016 464,000 12.28 2,579,000 12,968,000 46,227,504 -6,000 124,000 118,000 1,449,040
11/4/2016 11/2/2016 601,000 12.3 2,647,000 12,968,000 45,499,504 0 728,000 728,000 8,954,400
11/7/2016 11/3/2016 107,000 12.16 1,899,000 12,968,000 45,251,674 0 247,830 247,830 3,013,613
11/8/2016 11/4/2016 496,000 11.98 2,508,000 12,988,000 45,027,504 -20,000 224,170 204,170 2,445,957
11/9/2016 11/7/2016 111,000 12.04 2,389,000 12,988,000 45,388,504 0 -361,000 -361,000 -4,346,440
11/10/2016 11/8/2016 0 12.06 1,052,000 12,988,000 45,389,504 0 -1,000 -1,000 -12,060
11/11/2016 11/9/2016 1,220,000 12.02 4,245,000 12,988,000 41,014,504 0 4,375,000 4,375,000 52,587,500
11/14/2016 11/10/2016 0 12.3 2,984,300 12,959,000 40,846,504 29,000 168,000 197,000 2,423,100
11/15/2016 11/11/2016 1,187,000 12.34 3,029,000 12,959,000 40,780,504 0 66,000 66,000 814,440
11/16/2016 11/14/2016 0 11.98 1,881,352 12,959,000 41,058,152 0 -277,648 -277,648 -3,326,223
11/17/2016 11/15/2016 0 11.96 1,790,000 12,959,000 41,093,152 0 -35,000 -35,000 -418,600
11/18/2016 11/16/2016 0 11.86 4,193,000 12,461,000 39,729,152 498,000 1,364,000 1,862,000 22,083,320
11/21/2016 11/17/2016 0 11.92 1,979,452 12,216,000 38,755,152 245,000 974,000 1,219,000 14,530,480
11/22/2016 11/18/2016 0 12.08 4,005,000 11,716,000 36,639,332 500,000 2,115,820 2,615,820 31,599,106
11/23/2016 11/21/2016 445,000 12.04 11,312,000 11,716,000 35,879,332 0 760,000 760,000 9,150,400
11/24/2016 11/22/2016 469,000 12.1 2,612,820 11,716,000 34,661,332 0 1,218,000 1,218,000 14,737,800
11/25/2016 11/23/2016 878,000 11.98 3,110,000 11,716,000 33,168,414 0 1,492,918 1,492,918 17,885,158
11/28/2016 11/24/2016 402,000 11.84 2,397,000 11,716,000 33,022,363 0 146,051 146,051 1,729,244
11/29/2016 11/25/2016 400,000 11.44 6,453,000 11,771,000 32,932,332 -55,000 90,031 35,031 400,755
11/30/2016 11/28/2016 296,000 12 5,343,000 11,776,000 32,796,332 -5,000 136,000 131,000 1,572,000
12/1/2016 11/29/2016 325,000 11.9 1,596,000 11,776,000 35,147,332 0 -2,351,000 49,000 1
12/2/2016 11/30/2016 231,000 11.8 1,263,000 11,776,000 34,906,332 0 241,000 241,000 2,843,800

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Est. No. of
Closing Total Shares
No. of First Standard First Standard Proceeds
Price Vol. Sold (Bought)
Holding Trade Repurchase Shanghai Chartered Shanghai Chartered from Sales
(HKD, (Trade in market by
Date Date Share (Trade CCASS CCASS CCASS CCASS of Share
Trade Date) First Shanghai
Date) Holdings Holdings Decrease Decrease (HKD)
Date) and Standard
12/5/2016 12/1/2016 173,000 11.8 1,511,000 11,779,000 34,874,332 -3,000 32,000 29,000 342,200
12/6/2016 12/2/2016 855,000 11.7 2,355,000 11,769,000 34,620,332 10,000 254,000 264,000 3,088,800
12/7/2016 12/5/2016 4,424,000 11.9 6,951,000 11,778,000 32,699,332 -9,000 1,921,000 1,912,000 22,752,800
12/8/2016 12/6/2016 526,000 11.96 1,307,177 4,828,000 39,597,332 6,950,000 -6,898,000 52,000 621,920
12/9/2016 12/7/2016 339,000 12 970,000 4,858,000 39,675,332 -30,000 -78,000 -108,000 -1,296,000
12/12/2016 12/8/2016 401,000 11.94 1,024,000 4,699,000 39,843,332 159,000 -168,000 -9,000 -107,460
12/13/2016 12/9/2016 825,000 11.68 2,090,000 4,398,000 39,888,332 301,000 -45,000 256,000 2,990,080
12/14/2016 12/12/2016 480,000 11.68 2,497,130 4,068,000 40,931,202 330,000 -1,042,870 -712,870 -8,326,322
12/15/2016 12/13/2016 449,000 11.6 1,055,000 3,934,000 40,961,202 134,000 -30,000 104,000 1,206,400
12/16/2016 12/14/2016 385,000 11.62 1,380,043 3,792,000 40,808,245 142,000 152,957 294,957 3,427,400
12/19/2016 12/15/2016 2,012,000 11.66 4,816,437 3,517,000 40,842,245 275,000 -34,000 241,000 2,810,060
12/20/2016 12/16/2016 958,000 11.8 1,515,234 3,522,000 40,607,245 -5,000 235,000 230,000 2,714,000
12/21/2016 12/19/2016 1,602,000 11.82 2,441,000 3,222,000 40,443,245 300,000 164,000 464,000 5,484,480
12/22/2016 12/20/2016 371,000 11.84 930,000 3,122,000 40,402,245 100,000 41,000 141,000 1,669,440
12/23/2016 12/21/2016 404,000 11.78 1,097,350 2,822,000 40,309,345 300,000 92,900 392,900 4,628,362
12/28/2016 12/22/2016 467,000 11.74 922,000 2,682,000 40,204,345 140,000 105,000 245,000 2,876,300
12/29/2016 12/23/2016 1,150,000 11.7 1,874,150 2,393,000 40,256,345 289,000 -52,000 237,000 2,772,900
12/30/2016 12/28/2016 289,000 11.8 876,000 2,181,000 40,289,345 212,000 -33,000 179,000 2,112,200
1/3/2017 12/29/2016 275,000 11.7 795,054 2,181,000 40,153,345 0 136,000 136,000 1,591,200
1/4/2017 12/30/2016 698,000 11.7 2,391,000 2,181,000 39,871,345 0 282,000 282,000 3,299,400
Total 29,251,000 10,781,000 9,274,177 20,055,177 240,153,147

Source: HKEx, Webb-site Estimation based on CCASS decrease of holding
Note 1: On 2016 Dec 1, 2.4 mn shares were moved from Sinolink Securities to Standard Chartered and is excluded in our calculation
Note 2: Proceeds from sales of share is estimated by number of shares sold multiplied by the closing price of share on that day

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Appendix C: SAIC filings of Comtech Digital Technology (Shenzhen) Limited in 2015

Welcome! Comtech Digital Technology (Shenzhen) Limited Logout
Reporting Year Comtech Digital Technology
(Shenzhen) Limited
Company Name

Total Asset RMB 203159.3 thousand Opt to not disclose

Shareholder’s Equity RMB 15488.1 thousand Opt to not disclose

Revenue RMB 99800.9 thousand Opt to not disclose

In which: revenue from major activities RMB9980.09 thousand Opt to not disclose

Profit before Tax RMB 13977.6 thousand Opt to not disclose

Net Profit RMB 10483.2 thousand Opt to not disclose

Total Tax Payment RMB 6792.6 thousand Opt to not disclose

Total Liability RMB 187671.2 thousand Opt to not disclose

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