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  "docId": "019dd923-622c-750b-8b96-8fb17e36fe49",
  "docSlug": "02b460a1c4f6",
  "documentTitle": "Man Wah Holdings (1999.HK)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2017-06-16 00:00:00",
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  "pageNumber": 14,
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  "notes": "The slide uses a table to demonstrate that the company's claims about retroactive tax credits are not reflected in the provided SAIC financial data.",
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      "kind": "callout",
      "text": "Given that the company has provided no credible explanations for these timing inconsistencies, they remain, in our view, a red flag.",
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      "text": "Effective income tax rate",
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      "kind": "paragraph",
      "text": "MWH also failed to address the discrepancies we found in the application of the NHTE Tax Preference between its SAIC and consolidated Hong Kong financials. The company has neither restated its CY 2012 SAIC filing, nor applied the reported overprovision to the CY 2013 filing.",
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      "kind": "paragraph",
      "text": "Before 2012, PRC companies committing fraud frequently had significant discrepancies between their SAIC and exchange filings across substantially all their accounts, with the SAIC filings often showing the much closer to true accounts. Fraudsters wised up, and now largely match up their SAIC and exchange filings; however, in our view taxes remain the area most likely to find a discrepancy due to book cooking. Thus, the discrepancies between Man Wah's SAIC and consolidated financials are a red flag.",
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      "kind": "paragraph",
      "text": "MWH claims that Huizhou's HNTE preference retroactively kicked in on July 1, 2012, and that the company received a credit for CY 2013 taxes due to overprovisioning for CY 2012. However, the below SAIC financials for the Huizhou entity neither show that it received a stub year HNTE preference in CY 2012, nor that it received a credit in CY 2013 for overprovisioning in 2012:",
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      "kind": "table",
      "text": "RMB 000 | CY2012 | CY2013 | CY2014 | CY2015\nPre-tax income | 38,066 | 67,684 | 114,119 | 87,639 | a\nIncome tax | 9,511 | 10,175 | 17,361 | 22,548 | b\nNet income | 28,555 | 57,509 | 96,758 | 65,091 | c\nEffective income tax rate | 25% | 15% | 15% | 26% | d=b/a",
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      "kind": "title",
      "text": "B. HK / SAIC Discrepancy",
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