It seems that most of the stocks trading near or under net cash value
with positive cash flows are Chinese companies. Some other examples
are GRO and GU. I think that all three of these companies went public
somewhat recently and have unaudited financial statements, though. I
would not be too surprised if they were cooking their books.

But I think the fact that the Chinese stock market is relatively new
and so Chinese investors are less experienced could also have a lot to
do with this. For example, I'd bet that HH is a Chinese trader who has
no grounding in fundamentals. If the mass majority of participants in
the market don't look at fundamentals, then the lower bound to stock
prices will be much lower, because the value investors and contrarians
are the ones who are willing to buy when prices are falling, and
create the bottom. This is especially true for companies that don't
pay dividends or buy back shares or otherwise return value to
shareholders.

This brings me to my next point. Judging by what I've read, the management is very unfriendly toward shareholders... they pretty much refused buy backs of shares in a recent conference call even at this ridiculously low price (they dodged the question awkwardly when an analyst asked about it, saying something along the lines of "cash is king"). They also issued new shares in May 2008, diluting shareholders to raise cash even when they supposedly had tons of money sitting around doing nothing on their balance sheet. Why would management of any company do this? It's pretty suspicious to say the least.

And finally, the numbers look too good to be true. Why hasn't a
company already bought them out at this point? I'm sure you already
know the idea behind this, but I'll explain to HH. At the current
price, the entire company is worth less than the cash on their balance
sheet minus all the liabilities. So theoretically, someone, like a
rival corporation, could buy out the company and take all the cash,
pay off the liabilities, and make a profit right then and there. And
have the rest of the company for free. And to top it off, this company
that you're getting for free is very profitable with very high margins
and return on invested capital. It's just way too good to be true.

These are just my initial impressions. It's pretty hard to find good info on this company...