China Tire May Be Unduly Deflated

On the Big Board, China Tire Holdings (TIR) behaves as if it were a retread. In early summer, shares of this major Chinese tiremaker were around 12. They're now at 6, and even Morgan Stanley downgraded its rating in November to "neutral" from an earlier "buy." That's quite a blow: Morgan Stanley was one of China Tire's major underwriters when it went public--in July, 1993, at 17 a share. And it owns 5.7% of the stock. Constantly shifting U.S.-China relations are part of the Street's aversion to the stock. And there has been concern about China Tire's earnings predictability.

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