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  "documentTitle": "Man Wah Holdings (1999.HK)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
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  "presentationDate": "2017-06-16 00:00:00",
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  "notes": "The slide contains a table calculating pro-forma income tax and text sections detailing regulatory non-compliance and debt discrepancies.",
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      "text": "The bottom line on the tax inconsistencies is that in our view, the company failed to explain them. Therefore, we see these issues as a red flag.",
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      "kind": "paragraph",
      "text": "C. Failure to Meet HNTE R&D Requirement",
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      "text": "The bottom line on the tax inconsistencies is that in our view, the company failed to explain them. Therefore, we see these issues as a red flag.",
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      "text": "We made two arguments here - the current PBOC credit report for the Huizhou entity shows 48% more debt than the consolidated balance sheet...",
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      "text": "The following is our calculation of the pro-forma SAIC filing if the overprovision had been applied in a manner consistent with how the CFO described MWH's application of the preference on the call:",
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      "text": "MWH did not even attempt to deny that its R&D expenditure was below the 3% of gross revenue threshold required for the NHTE preference.",
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      "text": "“Another allegation in relation to the inconsistency in taxes they are referred to some tax treatment under this New High Technology tax preference. One company in China, we got approval from the government for the approval for the high-tech preference for three year from 2012 to 2014. But we cannot claim 15% tax rate unless it is approved or filed by this tax authorities and this approval by the tax approval there’s some delay. For example, for calendar year 2012, we only got the final approval from the tax authorities in calendar year of 2013 or the fiscal year 2014. So to be prudent, we did provide 25% tax rate before we got the final approval which is reflected in fiscal year 2013. In fiscal year 2014 we finally got approval for this tax treatment so we reversed the 10% over provision for the income tax. This is how it works. It looks a little complicated but it is just normal tax treatment because of some delay in approval cause a little bit confusion but nothing related to some type of tax liability.” — CFO of Man Wah Holdings",
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      "text": "15 Another allegation in relation to the inconsistency in taxes...",
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      "text": "RMB 000 | 2012 | 2013 | 2014 | 2015\nPre-tax income as per SAIC | 38,066 | 67,684 | 114,119 | 87,639\nIncome tax at 25% | 9,517 | 16,921 | 28,530 | 21,910\nOverprovision of previous years | - | (3,807) | (6,768) | (11,412)\nPro Forma Income Tax* | 9,517 | 13,114 | 21,761 | 10,498\nIncome tax as per SAIC | 9,511 | 12,339 | 17,361 | 22,548",
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      "kind": "title",
      "text": "MWH Has Undisclosed Debt",
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