Muddy Waters Shorts China Huishan Dairy: Alfalfa Fraud, Worthless
By Shuli Ren
In its IPO prospectus, Huishan claimed its own alfalfa production costs were $70 per metric ton, versus about $400 per metric ton for imported alfalfa.
Muddy Waters said that Huishan has been importing “substantial” quantities of alfalfa from third parties.
“We and our investigators spoke with suppliers and importers of alfalfa in three different provinces, some of whom were selling alfalfa to Huishan.”
We believe Huishan has engaged in CapEx fraud related to its cow farms.
We estimate that Huishan has overstated the spending on these farms by RMB 893 million to RMB 1.6 billion.
http://d.muddywatersresearch.com/wp-con ... 161216.pdf
Source: Barron's Asia
http://blogs.barrons.com/asiastocks/201 ... worthless/