Another Reason to Short Deer Consumer Products
After I pointed out here the likelihood that Deer Consumer Products (NASDAQ: DEER) management intentionally overpaid by 50% when they purchased land use rights to 435 Mu (289,416 square meters) in Wuhu, management quickly responded in the 10-K filed on March 10th that:
We have received a land certificate covering 289,415.79 square meters (435 Mu or 28.9416 hectares) in the first parcel of land, on which we anticipate building a new production facility.
Management, however, failed to respond to the key issue of why they paid a unit purchase price of RMB 330K per Mu vs. an average price of 240K per Mu from the very close comparable land use rights sales in the same month, at the same location, as I showed (here) in a list of 17 very comparable transactions.
After the urging of Global Hunter Securities analyst Joe Giamichael, DEER management followed up by filing an 8-K
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