Note 24 - Concentration of Risk

12 Months Ended

Dec. 31, 2015

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

24. Concentration of risk

Credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables and prepayments and deposits to suppliers. As of December 31, 2015 and 2014, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in Mainland China, which management believes are of high credit quality.

Risk arising from operations in foreign countries

All of the Company’s operations are conducted within the PRC. The Company’s operations in the PRC are subject to various political, economic, and other risks and uncertainties inherent in the PRC. Among other risks, the Company’s operations in the PRC are subject to the risks of restrictions on transfer of funds, changing taxation policies, foreign exchange restrictions; and political conditions and governmental regulations.

Currency convertibility risk

Significant part of the Company’s businesses is transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. These exchange control measures imposed by the PRC government authorities may restrict the ability of the Company’s PRC subsidiaries and VIEs to transfer its net assets, which to the Company through loans, advances or cash dividends.

Concentration of customers

Excluding revenues generated from discontinued operation, for the year ended December 31, 2015, two customers individually accounted for both 12% of the Company’s revenues, respectively. For the year ended December 31, 2014, two customers individually accounted for 28% and 17% of the Company’s revenues, respectively. Except for the aforementioned customers, there was no other single customer who accounted for more than 10% of the Company’s revenues for the years ended December 31, 2015 or 2014.

As of December 31, 2015, two customers individually accounted for 24% and 17% of the Company’s accounts receivable, respectively. As of December 31, 2014, two customers individually accounted for 19% and 18% of the Company’s accounts receivable, respectively. Except for the aforementioned, there was no other single customer who accounted for more than 10% of the Company’s accounts receivable as of December 31, 2015 or 2014.

Concentration of suppliers

Excluding cost incurred by discontinued operation, for the year ended December 31, 2015, two suppliers accounted for 43% and 37% of the Company’s cost of revenues, respectively. For the year ended December 31, 2014, two suppliers accounted for 72% and 19% of the Company’s cost of revenues, respectively. Except for the afore-mentioned, there was no other single supplier who accounted for more than 10% of the Company’s cost of revenues for the years ended December 31, 2015 or 2014.