Foreign
China Huishan Dairy, China’s largest meierigruppe with a market capitalisation of over 40 billion. – The company’s value is closer to zero, believes the Muddy Waters Capital, which has revealed extensive regnskapsjuks in chinese companies.
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Carson C. Block, who stands behind the Muddy Waters, has specialised in identifying the irregularities at publicly traded chinese companies. In 2011, accusing him skogselskapet Sino-Forest, which was publicly traded in Canada, for fraud.
the Company had been publicly traded in Canada through from behind without that it was undertaken due diligence on the claimed values and the contracts in China. Hedgefondlegenden John Paulson had to take a loss of 790 million dollars on the investment and the Sino-Forest went bankrupt with the subsequent legal proceedings.
Fraudulent accounts
Now is Muddy Waters and Block out with a new report on a chinese company. As usual does not hold Carson Block again with the claims about the regnskapsjuks, inflated balance sheet and criminal activities from the predominant small game species.
“Since the end of 2014, if not earlier, China Huishan Dairy Holdings reported fake profits. This is among other things based on the lie that they are almost self sufficient in producing alfalfa,” writes the company in one of the two reports that have come since Friday.
Alfalfa, which also goes under the name of lusern, is a urteplante which is suited very well for animal feed for milk producing cows.
“We have found evidence that Huishan long has purchased significant amounts of alfalfa from the third party. There is no doubt that the companies accounts are fraudulent,” writes Muddy Waters.
This tilbakevises of Huishan.
“Muddy Waters has come with baseless claims and misrepresentations. We reserve the right to take legal action,” writes the company in an announcement.
– Sell!
the Company’s chairman of the board shall be alleged to have stolen at least 150 million yuan (190 million) from the company.
“the Amount is probably higher” believes Muddy Waters, which provides a clear salgsanbefaling on the chinese company.
Representatives of the Muddy Waters have visited 35 melkefarmer in China, five dairies and two manufacturing facilities that the company previously has said is under construction.
“We found no evidence that the construction is underway,” writes Muddy Waters.
the Company’s analysts have used the drones for over melkefarmer and dairies to find out more about the activity. At least four melkefarmer shall have been sold without this is apparent from the financial statements or interim reports.
After the report from Muddy Waters have in the last three analysts who had a kjøpsanbefaling of the stock changed this to either sell or “hold”.
the Gambler on kursfall
The chinese companies are listed on the Hong Kong stock exchange. When the first report was submitted on Friday jumped the share price by almost five per cent before the trade was initiated again on Monday.
On Monday, the share price has risen by 1.4 per cent – thanks to støttekjøp from the chairman and main shareholder mr. Yang Kai. He controls 73 per cent of the shares via the company, Champ Harvest. Around 20 percent of the freely tradable shares are shortet.
Shorthandel, shorte or shorting involves borrowing shares and then sold for the purpose of buying the shares back after the exchange rate has fallen. Then delivered the shares back. An investor shorter, betting on the kursfall. If the exchange rate rises, the risk of investor losses by buying the shares back for a higher price.
According to the Huishans accounts, it had a debt of around nok 1.7 billion by the end of the year. The turnover was of almost six billion – 15 percent more than a year ago. The company says that they have reduced debt in the year.
Manure to energy
It has the huge increase in milk production in China in recent years and the prices of dairy products have plummeted internationally.
Huishan biggest competitor, China Mengniu Dairy, came with profit warnings in the last week. The company warns that it will cause “a significant loss” in the current fiscal year.
– This report will make it even harder for Huishan to obtain financing in the capital market. There have been other report in the past, a red flag to investors, ” says analyst Robin Yuen at RHB OSK Securities Hong Kong to Bloomberg News.
the Company shall have assets, equipment and approximately 40,000 milking cows to finansselskaper and has leased these back. In the last year said company shall establish bioenergidivisjon to extract energy from cow dung in China.
Markets
the stock Markets fall on Monday morning in Asia – led by nøkkelindeksene in Tokyo, Hong Kong, Taipei and Manila with up to 0.6 per cent. Nøkkelindeksene in Bangkok and Jakarta have so far managed to end up on the plus end.
oil prices have climbed steadily since Friday morning american time, and have risen by between 0.6 and 0.8 percent in asian trade.
The weekly riggtellingen from Baker Hughes shows that the number of oil rigs in production in the U.S. increased by 12 last week – to 510. This is the highest number since January.
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