{ "docId": "019dd923-622c-750b-8b97-8456188f4be9", "docSlug": "3112e2e7b808", "documentTitle": "CPI Property Group (CPIPGR)", "authorId": "51_Muddy_Waters", "authorName": "Muddy Waters Research", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2024-01-22 00:00:00", "orientation": "landscape", "aspectRatio": 1.7777778, "pageNumber": 38, "pageCount": 50, "prevPage": 37, "nextPage": 39, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 5, "notes": "The slide highlights a shift from 'comparable method' to 'future development valuation (FDV) method' to justify gains.", "elementsJson": [ "headline_text", "paragraph", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b97-8456188f4be9/38", "deckHref": "/decks/019dd923-622c-750b-8b97-8456188f4be9", "deckJsonHref": "/decks/019dd923-622c-750b-8b97-8456188f4be9.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-8456188f4be9#slide-38", "components": [ { "bbox": null, "kind": "callout", "text": "These gains appear disconnected from any physical improvement to the landbank holdings of either holdco—neither MQM Czech nor Polygon BC had been fully permitted, nor had they started construction when the gains were taken.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-f5d1-75b6-b073-15560c2ff5cb", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "valuation gains: €68.1 million", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd952-f5d1-75b6-b073-1a0e5b0b5fd2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.18 }, "kind": "paragraph", "text": "Between 2017 and 2021, the years immediately following the MQM Czech and Polygon BC repurchase from Vitek's proxy, CPI PG booked another €68.1 million in valuation gains on the properties. These gains appear disconnected from any physical improvement to the landbank holdings of either holdco—neither MQM Czech nor Polygon BC had been fully permitted, nor had they started construction when the gains were taken.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7311939d-50e1-493e-b202-3d18ec8d1926", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.65 }, "kind": "paragraph", "text": "When CPI PG sold the vacant land to its proxy J&T in 2014, the valuation used the comparable method. When CPI then bought them back from J&T and Vitek in 2017, CPI PG “shifted to the future development valuation (FDV) method,” based on “the prospect of earning permits.”2", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "76266750-e3d4-45c5-bd30-9ad458c3e9e3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.35 }, "kind": "paragraph", "text": "Polygon BC took a suspect €53.0 million fair value gain in 2021 alone, the year before construction started on the first of its six buildings at the development Kolbenova Park. (Some construction has since commenced.) The €53.0 million gain seemingly represents much of the projected profit for the entire six-building development, yet still strikes us as unrealistic.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7ecdc442-2c0c-4041-84b6-5233522aff47", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.52 }, "kind": "paragraph", "text": "By 2022, MQM Czech had nearly tripled its value from 2017, rising from €13.7 million to €38.9 million—but according to CPI PG only received a permit in 2022,1 and had not yet begun any construction as of Fall 2023.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "caa8a5d7-4e21-4456-a7b1-8566314fcb4c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.4, "x": 0.05, "y": 0.85 }, "kind": "source-note", "text": "1 See Dec 8 response pp. 10-12 CPI PG response, Dec 8, 2023, p. 12\n2 Ibid.", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ff318c37-0e41-47e3-adcc-b024ca784269", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.05 }, "kind": "title", "text": "Polygon BC and MQM Czech — More Subterfuge Through Valuation Gains Without Development", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6e3ae33f-24e4-442c-8528-bcd5aeb5fdc3", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "d088d37e-519d-40e4-be1d-2934f4068e55", "evidence": "The slide explicitly frames valuation gains as 'subterfuge' and 'suspect', pointing to a change in accounting methodology to justify gains without physical progress.", "confidence": 0.9 } ], "arcBeats": [ { "to": 50, "from": 36, "beatId": "6050a9c8-83b5-49a1-871d-da1dcb45c199", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory", "beatSlug": "overcoming-monster-the-victory", "evidence": "The final slides summarize the key takeaways and reiterate the thesis.", "position": 3, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }