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  "documentTitle": "China Huishan Dairy Holdings (6863 HK)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "presentationDate": "2016-12-16 00:00:00",
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  "notes": "The slide justifies the conservative nature of the financial estimates by detailing specific accounting assumptions regarding PP&E, land leases, and CIP allocations.",
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      "text": "We consider this estimate to be conservative because:",
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      "text": "Note 1: The PPE for plantation buildings is not specifically disclosed. We estimate it based on a 2:1 ratio of feed processing plants to plantation building expense as we believe that the processing plant will require much greater CapEx than the plantation farm sheds, storage, and office spaces. In FY16 no expansion of the plantations took place, so it is likely that no new construction took place; therefore, the allocation of the expense was 45% to each of FY14 and FY15, and just 10% to FY16. In 1H17, the Company reported a decrease in plantation lands of 90,000 mu. If the Company had considered this a possibility, new investments in FY16 would very likely have been further curtailed.",
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      "text": "The CapEx for plants includes both PP&E and land lease payments. Because PP&E excludes land, the additions for constructing the plants alone would be lower than the total CapEx for plants. This is company favorable because it likely overestimates the amount of PP&E spending for plants, and thus results in a lower per dairy farm estimate.",
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      "text": "The changes in Construction in Process (CIP) includes that for plants, however we adopted assumption that all CIP was for the dairy farms. Likewise, motor vehicles include farm and non-farm operations. We assume all PP&E in this category apply to dairy farms. This is company favorable because it likely underestimates the amount of CIP allocated to plants, and thus results in a lower per dairy farm estimate.",
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      "text": "Page 14 of 47",
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