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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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      "text": "We spotted a red flag in Huishan's reported alfalfa production - its alfalfa production per head has decreased precipitously since its IPO, once again supporting our conclusion that Huishan's alfalfa claims are false.",
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      "text": "Photograph of Anderson alfalfa bales at a Huishan farm.",
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      "text": "On the surface, Huishan’s purported alfalfa production is hard to believe, given the flooding issues in Liaoning where it has its farms.",
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      "text": "A sign at one of Huishan’s “show farms” states that it feeds the cows with alfalfa imported from the U.S.",
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      "text": "We spotted a red flag in Huishan’s reported alfalfa production – its alfalfa production per head has decreased precipitously since its IPO, once again supporting our conclusion that Huishan’s alfalfa claims are false.",
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      "text": "An investor who diligenced Huishan in 2014 provided us with photographs his investigators took on Huishan farms that show it was feeding U.S. alfalfa produced by El Toro.",
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      "text": "A Heilongjiang alfalfa distributor also confirmed that his company has a longstanding relationship to supply Huishan with sheep grass and alfalfa.",
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      "text": "Our investigators discovered Huishan has been a significant customer of Anderson. It appears Anderson supplied quantities approximately equal to half of Huishan’s purported FY14 alfalfa production. Our investigators took the below photograph at a Huishan farm.",
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      "text": "Huishan purchases domestic alfalfa from third parties as well. A Heilongjiang distributor confirmed that they have been supplying the Company with alfalfa and sheep grass for several years and have very good “guanxi” with the Company’s purchasing manager.",
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      "text": "We contacted Anderson’s importer/agent in China, who confirmed that Huishan has been a customer for three years. According to the agent, Huishan’s shipments from Anderson started in 2013 with approximately 70,000 mt that year, dropped to 30,000-40,000 mt/yr in 2014 and 2015 when the China milk market softened, and that volume improved modestly in 2016. The reported volumes supplied by Anderson in 2013 alone equate to about half of Huishan’s FY14 (April 1, 2013 to March 31, 2014) reported total internal consumption. The importer/agent also provided current market prices, quoting RMB 2,330/mt (approximately US$345) based on delivery at the port of Dalian.",
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      "text": "14 At Oct. 2016 forex rates of 6.75 RMB:USD\n15 Guanxi literally means a “personal relationship.” In business, it is often used to allude to relationship capital accrued through the give and take of special favors and is a common euphemism for bribes or kickbacks.",
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