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  "docSlug": "82a540401996",
  "documentTitle": "China Huishan Dairy Holdings (6863.HK)",
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  "authorName": "Carson C. Block",
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  "presentationDate": "2016-12-19 00:00:00",
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      "text": "The state of Huishan's pre-IPO farms almost certainly did not permit world-class yields.",
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      "text": "Aerial view of Lujiapu Cow Farm showing damaged rooftops.",
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      "text": "While not every farm visited appeared to be in a dilapidated state, the following photos reveal shortfalls in build quality and general upkeep that we believe is a systemic throughout most of the Huishan pre-IPO asset portfolio.",
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      "text": "Huishan’s problem was that its yield story was suspicious. Cows’ living conditions are a large determinant of yields. It was clear to our experts that many of Huishan’s pre-IPO cow farms were of low quality, which made it highly unlikely they could support Huishan’s claimed yields.",
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      "text": "The state of Huishan’s pre-IPO farms almost certainly did not permit world-class yields. Conditions documented by our investigators reveal that initial construction quality of the pre-IPO farms was very poor and that maintenance CapEx has been insufficient to sustain an environment that is beneficial to a cow’s health and milk output. Our investigators visited 18 farms built prior to Huishan’s IPO in September 2013. They took photographs and interviewed numerous on-site employees that yielded useful insights. Issues include cracked walls, crumbling concrete, shoddy repairs, broken doors, rust, and damaged rooftops. Lack of farm building maintenance, a preponderance of debris, and generally disorganized and unkempt conditions were common.",
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      "text": "Damaged rooftops on cow sheds at Lujiapu Cow Farm expose cows to the elements. Photos by MWC investigator.",
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