China Biotics: The Numbers Don't Add Up

China Economic Review submits:

Following comprehensive analysis of public information and extensive on-the-ground due diligence, we believe China Biotics (CHBT) may have fabricated revenues and earnings reported to U.S. regulators.

  • We believe the claimed distribution channels for its retail products in the Shanghai market are wildly overstated, and that the products themselves are not popular enough to justify reported revenue figures.
  • The firm's Shanghai production facility appear not to be large enough to generate the implied output of retail products.
  • All bulk additives customers named by the company denied the existence of any business relationship.

    • China Biotics is engaged in the research, development, production, marketing and distribution of probiotics products. These contain live bacteria, which act as dietary supplements and food additives to improve intestinal health and digestion.

    China Biotics' business consists of two segments: retail probiotics products and bulk probiotics additives. Retail business are mainly targeting at the end consumers from large supermarkets


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