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发帖数: 8441 | 1 冒出无数评级评价研究咨询公司（香港基地）。
炮制虚假研究报告，做空股票从中牟利。
China Agritech Further Responds to Misleading Allegations
BEIJING, Feb. 10, 2011 /PRNewswire-Asia-FirstCall/ -- China Agritech, Inc. (
Nasdaq: CAGC) ('China Agritech', or the "Company'), a leading organic
compound fertilizer manufacturer and distributor in China, today provided a
more detailed response to the inaccurate facts and misleading allegations in
a recent report by LM Research, a short seller in the Company's stock.
Contrary to the LM Research report, management confirms that the Company's
factories are fully operational and revenues which have been reported in
accordance with U.S. GAAP and audited by independent accountants are
accurate. The Company has no record of LM Research, who stands to benefit
financially from a decline in the Company's stock price, ever contacting the
Company for any information or requesting to visit or tour any of the
Company's facilities. We have attempted to find out who or what LM Research
is, but it seems to have no history as a research firm, other than its
recent attack on our Company.
1) In response to the allegation of fictitious revenues, the Company's
revenues have been recorded based on the U.S. GAAP standard and results have
been audited by independent accountants for the past six years. China
Agritech is a fully reporting company filing annual 10-Ks and quarterly 10-
Qs with the SEC. The Company's financial statements will now be audited by
Ernst & Young Hua Ming, a "Big 4" accounting firm, beginning with the fiscal
year ended December 31, 2010.
The Company expects to release its fourth quarter and full year 2010 audited
financial results in March 2011. This date is consistent with last year's
2009 year-end announcement on March 31, 2010.
With respect to the disclosure of the revenue numbers reported to the
Chinese government stated in the short seller's report, the Company confirms
that its filings with the SEC are accurate, correct and have been audited
by independent accounting firms. In addition, the Chinese SAIC is a
government-designated institution responsible for the creation and updating
of corporate registrations. The SAIC is not tasked with the responsibility
of examining, reviewing or auditing financial statements that are submitted
by a company. The timing, process, standards and requirements for submission
are different from those for financial reporting in the U.S.
2) Despite LM Research's allegations, the Company's factories are fully
operational, functioning and none are or have been for sale. The complete
addresses of each of the Company's facilities can be found below. All of
these facilities are operating normally. In addition to the Company's
independent auditors, a number of analysts, media, and professional
investors have visited the Company's production facilities. The Company
periodically invites current and prospective analysts to visit the Company's
facilities. However, as part of the Company's standard operating procedures
and to ensure that there is no disruption to normal business operations,
any such visit must be scheduled in advance for a specified date and time so
that the proper personnel are available to assist in such tour. China
Agritech has no record of LM requesting such a site visit of any of its
facilities. Furthermore, in management's experience it is highly unusual,
and out of normal operating procedures for any manufacturing company, to
allow anyone to randomly enter their facility and begin "touring" without a
prior scheduled appointment.
Despite LM's allegation, the Company's Harbin facility has never been listed
for sale. LM posted what it claimed was a "For Sale" sign in front of a
facility but that facility was not the Company's. The sign has a telephone
number, so a representative of the Company dialed it (+86 13945131618).The
representative was told by a Mr. Bi that the actual factory for sale is
addressed at No. 16, Dalian Road. As LM admits, the Company's Harbin
facility is at an adjacent location - No. 20 Dalian Road. A careful reading
of LM's false accusations reveals their tactic: first they falsely claim
that the Company's facility is for sale. Then they imply that China Agritech
's filings with government are erroneous in some unspecified manner, and, by
doing so, LM implies that the address of China Agritech's facility is also
erroneous in the government filing. LM never says, however, that the Company
's address is wrong, because it is not, and so they contradict their own
allegation. Furthermore, the name referred to in the report "Harbin Agritech
Company," is not the name for the Company's Harbin facility which has
consistently been disclosed as "Pacific Dragon Fertilizer Co, Ltd. (PRC)."
The Company is unaware of any entity known as "Harbin Agritech Company" and
has no relationship with or to the facility for sale at No. 16, Dalian Road
in Harbin.
Company facilities addresses:
* Anhui: E. 1800 Meters, Bengu City, Anhui Province
* Harbin: No. 20 Dalian Road, Development Zone, Harbin City,
Heilongjiang Province
* Xinjiang: No. 360 Dongrong St. Northern District, Urumqi, Xinjiang
Province
* Beijing: No. 8 M2-4 District, Xingu Economic Development Zone, Pinggu
District, Beijing
3) In response to the allegation that the distribution centers do not exist,
and the Company has not properly used $19M raised in 2010 for the
construction of distribution centers, the Company today has 21 distribution
centers in operation.
The Company has no record of ever having received a request from the short
seller for a list of and locations of the Company's distribution centers.
Photos of the Company's Wanzhuang flagship distribution center in Henan
province has been uploaded onto the Company's website at http://www.chinaagritechinc.com/management.htm.
Addresses of other sample distribution centers are also provided here.
Sample Distribution Centers addresses:
* No. 7 Jiangpin Road, Xian'nv Town, Zhang Gang, Jiangdu City, Jiangsu
Province
* Wanzhuang Fertilizer Mart, Xingang Ave., Xingang District, Zhenzhou
City, Henan Province
4) In response to the allegation that customers including SinoChem denied
having business relationships with China Agritech, LM Research was not able
to provide credible and verifiable evidence for its purported communication
with SinoChem. In actuality, the Company has partnered with SinoChem for
three years. Historic sales agreements with SinoChem have been filed with
the SEC and can be viewed at:
http://www.sec.gov/cgi-bin/browse-edgar?company=China+Agritech&
5) In response to the allegation that China Agritech does not have
production licenses, LM Research again was not able to provide credible and
verifiable evidence for its purported communication with local governments.
The Company has the necessary licenses for the production of all of its
fertilizer products. China Agritech has obtained the necessary Formal
Fertilizer Registration Certificate for all of our fertilizer products from
the PRC Ministry of Agriculture. Our formal fertilizer certificate was
renewed on May 28, 2008 and is valid for a period of five years starting
from May 28, 2008.
In addition, license registration numbers are clearly marked on each of the
Company's product. On average it takes 2 to 5 years to obtain production
licenses for organic fertilizers in China. That is why our 17-year corporate
history in this industry is valuable as we have accumulated a large number
of production licenses.
The company provides a list of its product license registration numbers for
our granular compound fertilizers within the share holder letter on the
company's website "http://www.chinaagritechinc.com/management.htm".
6) In response to the allegation of being unable to locate a Company sample
product or purchase the product, LM must not have tried very hard to
purchase China Agritech products, as samples are readily available for sale.
The Company has a designated customer service telephone line: +86-800-990-
0686 to provide consultation to existing and prospective customers and
distribution partners to assist in making purchases. The Company had no
record of any request from LM Research for product samples. Products can be
obtained at our distribution centers throughout the main agricultural areas
in China. The addresses of these centers can be found on the Company's
website. Although B2C online shopping platforms do not constitute the main
distribution channel for the Company's products, product can be found on
Taobao at http://item.taobao.com/item.htm?id=5540312720.
7) In response to the allegation that suppliers cannot be located, the
Company's suppliers are publicly disclosed and have facilities near the
Company. Contracts with the Company's suppliers have been disclosed in the
FY2009 annual report and can be viewed on the SEC website at: http://www.sec.gov/Archives/edgar/data/1166389/000114420410017773/v178924_10k.htm.
8) LM says that there is only a small market for humic acid fertilizers, but
the only objective facts they present is about the use of humic acid in
medicine. As a result of the Company's purification, complexing technology,
and proprietary formulas, China Agritech is able to produce high valued-
added organic fertilizer products. LM's comments about humic acid
manufacturers are irrelevant, as is a comparison of pricing between the end
fertilizer product and the raw material humic acid.
The Chinese government has strict management standards on humic acid
fertilizer, even though LM claims that there is no quality standard. The
current implementation of the standard for the soluble fertilizer containing
humic acid is NY1106-2006. China Agritech is one of the first companies
that engaged in commercialized organic fertilizer production with leading
humic acid purification techniques and depth trace elements with complex
technology. With high-quality products and strict production processes,
China Agritech products were highly promoted by the Chinese Ministry of
Agriculture and Agricultural Technology Promotion Center.
In 2008, China Agritech's organic liquid compound fertilizer was highly
praised by NATESC of Ministry of Agriculture of China. The Company maintains
photocopies of relevant documents available upon request through our
Investor Relations agency Grayling.
9) Regarding related party transactions, Harbin Tailong signed a rental
contract with Yinlong, a related party which had owned 10% of Harbin Tailong
relating to two factories and one office building with a total area of 7,
018 square meters. Monthly rent included rental for the two factories and
one office building as well as large quantities of electricity, gas and
water expenses used for production, which increased with the expanded
production scale. Therefore, the rental agreement was revised in 2005 and
new terms were stipulated to begin from July 1, 2005. The property that the
Company acquired in a related-party transaction was, according to an
independent third-party appraisal firm, Knight Frank, assessed to have a
fair value of $1.59 million, compared with the $1.49 million actual
transaction price.
10) In response to the allegation about a formal FINRA investigation in 2010
for insider trading, the Company never received a formal investigation
notice from FINRA regarding insider transactions. The Company has
established a strict insider trading policy. Management has abided by such
policy and has not engaged in any share transactions that are against their
professional integrity or corporate governance. The total number of shares
transacted since 2010 only amounts to 3% of insiders' holdings.
11) In response to the allegation regarding the Company's Beijing
Representative Office, Tailong's Beijing Representative Office was
established on August 31, 2005. At that time, the Company had not set up
factories outside Harbin. Tailong's Beijing Representative Office served to
gather information and formulate a development strategy for the Company. As
the Company has grown over the years, the function of the Beijing
Representative Office is being gradually satisfied by the Company's Beijing
subsidiary. The Company is currently phasing out the Beijing Representative
Office.
12) LM Research alleges that management engages in self-dealing and takes
excessive compensation. In fact, management has never engaged in self-
dealing and has proactively supported the Company's interest. The office Ms.
Xiaorong Teng leased to the Company has a total area of 780 square meters
with annual rent of 492K RMB, which is equivalent to 1.75 RMB per square
meter per day (approx. 0.27 USD per square meter per day). Such rate is
below the going market rate. In addition, between March 11 and March 13,
2009, Chairman Yu Chang and Ms. Xiaorong Teng bought back shares and took
voluntary pay cuts during the global economic downturn to support the
Company.
13) LM alleges that Linda Dai's employment at YellowStone Resource cannot be
verified. However, Linda Dai's employment at YellowStone can be verified.
The full name of the company where Ms. Linda Dai worked was Yellowstone
Resource, Inc. The company was registered in the State of Texas and its
registration number is 800515242. The Company maintains photocopies of
relevant documents, available upon request, through our Investor Relations
agency Grayling.
Conclusion
There are a few more important factual errors in the LM Research "report",
which is riddled with errors, large and small, and misleading and mis-
characterized allegations. It is clear that LM Research lacks even a
fundamental knowledge of China's fertilizer industry. China Agritech is
engaged in the production of organic compound fertilizers, not inorganic
fertilizers. The gross margin of organic fertilizers is much higher than
inorganic fertilizers. The organic fertilizer industry has vast market
potential. The Chinese government is subsidizing the growth of this industry
through a Value Added Tax exemption for organic fertilizer producers. The
Ministry of Agriculture expects a 30% compound annual growth rate for
organic fertilizers for the next few years.
China Agritech's products and services have been in the market for 17 years.
With the government's support to the organic fertilizer industry, China
Agritech has achieved a compound annualized sales growth rate of 35%.
In addition to the eight photos that have been posted onto the corporate
website at http://www.chinaagritechinc.com/management.htm, the Company is in the process of presenting more evidence. Meanwhile, the Company invites investors to view a corporate video at: http://v.youku.com/v_show/id_XMjQyNTYxODc2.html.
The Company has retained a third party service provider to begin an
investigation of LM Research. On a tour to LM Research's office in Hong Kong
, per the address listed on its website, a receptionist informed that they
had never heard of LM Research inside the building.
The Company will continue to defend the interests of its shareholders. China
Agritech is currently considering all available actions against malicious
short sellers.
The Company also announced that it has made available on its corporate
website a detailed letter to shareholders from its Chairman and CEO, Mr. Yu
Chang. This letter responds to recent negative allegations and factual
inaccuracies by self-acknowledged short sellers, and provides factual
responses and further clarifications to refute these attacks on China
Agritech's business operations and policies. Included in this shareholder
letter are a point-by-point response to inaccurate and misleading
allegations made by the short sellers concerning China Agritech's accounting
practices, use of raised capital, availability of proper licenses, activity
of the Company's production facilities, the status of the growing
distribution center network, related-party transactions, historic
development and current condition of the industry, and the background of the
Company's senior management and independent director. The Company believes
that this letter will provide existing and potential shareholders of China
Agritech greater insight into its operations, business model, the integrity
of its management team, and it will dismiss inaccurate facts and misleading
allegations. The letter is currently available at China Agritech's website "http://www.chinaagritechinc.com/management.htm".
About China Agritech, Inc.
China Agritech, Inc. is engaged in the development, manufacture and
distribution of liquid and granular organic compound fertilizers and related
products in China. The Company has developed proprietary formulas that
provide a continuous supply of high-quality agricultural products while
maintaining soil fertility. The Company sells its products to farmers
located in 28 provinces of China. For more information, please visit http://www.chinaagritechinc.com.
Safe Harbor Statement
This press release contains certain statements that may be deemed to be "
forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of historical
facts, that address activities, events or developments that the Company
expects, projects, believes or anticipates will or may occur in the future,
including, without limitation, statements about its business or growth
strategy, general industry conditions, future operating results of the
Company, capital expenditures, expansion and growth opportunities, financing
activities and other such matters, are forward-looking statements. Although
the Company believes that its expectations stated in this press release are
based on reasonable assumptions, actual results may differ from those
projected in the forward-looking statements. Certain of these risks and
uncertainties are or will be described in greater detail in our filings with
the SEC. Except as required by law, China Agritech is under no obligation
to update or alter its forward-looking statements whether as a result of new
information, future events or otherwise.
For more information, please contact:
Mr. Gareth Tang
Chief Financial Officer
China Agritech, Inc.
g****[email protected]
Mr. Shiwei Yin/Kevin Theiss
Investor Relations
Grayling
+1-646-284-9474
s********[email protected]
k**********[email protected]
SOURCE China Agritech, Inc.
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RELATED LINKS
http://www.chinaagritechinc.com
http://www.sec.gov/cgi-bin/browse-edgar?company=China+Agritech&
http://www.chinaagritechinc.com/management.htm
http://item.taobao.com/item.htm?id=5540312720
http://www.sec.gov/Archives/edgar/data/1166389/0001144204100177
http://v.youku.com/v_show/id_XMjQyNTYxODc2.html |
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