Muddy Waters, LLC (“Muddy Waters”) announced in a presentation on June 7, 2017 that we are short Man Wah Holdings Ltd. (“MWH”, 1999 HK). MWH promptly halted the stock and on June 9th issued a clarification announcement in response. MWH’s response accurately quotes the presentation slides, although it does not present the complete deck. We address MWH’s response.
Our opinion remains that MWH is likely committing fraud. We presented six arguments in the presentation:
- MWH’s profitability is an outlier,
- Macau profits – a red flag,
- Panjiva data casts doubt on export sales,
- Fieldwork casts doubt on the China growth story,
- MWH has inconsistencies in taxes, a strong indicator of fraud,
- MWH has undisclosed debt
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