China Ouhua Winery Holdings Ltd (+ve)

SHARES in China Ouhua Winery Holdings Ltd (fundamental: 1.8/3, valuation: 0.9/3), which triggered our momentum algorithm yesterday for the seventh time this year, slid half a sen or 4.17% to close at 11.5 sen. The stock saw 10.2 million shares traded, far above its 200-day average volume of 1.27 million shares.

On Sept 26, China Ouhua’s largest shareholder Hua Xin International Holdings Ltd proposed the appointment of Singapore audit firm UHY Lee Seng Chan & Co as auditor of the company for its financial year ending Dec 31, 2017.

This follows Singapore audit firm Helmi Talib & Co’s (HTC) withdrawal of its consent to be reappointed as auditor of the wine producer. HTC said it did not satisfy the criteria for Recognition of Foreign Auditors, which requires a foreign audit firm to be an internationally affiliated network firm.

At its current share price, the stock is trading at 0.5 times its book value.