Leading dairy firm China Huishan denied fraud charges published by Muddy Water LLC, a due diligence based investment firm that conducts investigative research on public companies. Huishan says that its operations are proper and that its financial report disclosure is true and accurate. The Hong Kong-listed dairy company ranks No 1 in Northeast China and No 5 in the national market, with the 3.09 billion yuan ($444 million) worth of liquid milk sales in fiscal year 2016, according to public information…Full Article: ECNS.cn Dec 2016

Key Point

  • Since 2014 (perhaps even earlier), according to Muddy Water, China Huishan Dairy (HKG:6863) was not self-sufficient in alfalfa production as claimed by the company. Instead, the company purchased alfalfa from other companies/distributors, casting doubt on the underlying financial strength of Huishan Dairy.

ChinaAg Comments

  • In April 2015, China Huishan Dairy (HKG:6863) and Royal FrieslandCampina established a Chinese joint venture.
  • In September 2013, China Huishan Dairy (HKG:6863) began trading on the Hong Kong Stock Exchange.
  • In January 2013, Huishan Dairy introduced its first infant formula milk powder product that was developed with Switzerland’s Hero Group.
  • In 2011, Switzerland’s Hero Group purchased a stake in China Huishan Dairy.
  • Founded in 1951 and headquartered in Shenyang, Liaoning Province, China Huishan Dairy (HKG:6863) is a dairy produce whose product line includes fresh milk, infant formula, and alfalfa (animal feed). As of early 2013, China Huishan Dairy had an infant formula production capacity of 160,000 MTs annually.

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