The hottest Oriental paper is accused of financial

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Oriental paper was accused of financial fraud

Oriental paper (ONP) is a Chinese enterprise listed on the American exchange (AMEX). Last week, a research organization called muddy waters released a report saying that Oriental paper had fraud and fraud, and rated it as a strong sell, with a target price of less than $1. The stock had a roller coaster market last week, once falling by nearly 50%, from $8 to $4.30. After the company issued a number of clarification reports, the stock rose by more than 40% on Friday. The following is the comprehensive collation of the event by I US stock station:

on June 28, muddy water rated Oriental paper as a strong seller:

muddy water announced that Oriental paper had financial fraud. After reviewing the financial report of He Bei Oriental Paper Co. Ltd., the operating subsidiary of Oriental paper, muddy waters accused Oriental paper of exaggerating its revenue in 2008 by nearly 27 times, and accused Oriental paper of misappropriating about $31.5 million from October 2009 to May 2010. Therefore, Dongfang paper was given a strong selling rating. As of the date of the report, muddy waters had short the shares of Oriental paper

affected by this accusation and the sharp decline in the market share of Oriental paper, the share price of Oriental paper fell, opening at $8.33 on the 28th and closing at $8.1

on June 30, Oriental paper responded to muddy waters' allegations:

Oriental paper believes that there are many errors, omissions, falsifications and unsubstantiated conclusions in the report based on muddy waters, which aims to let readers draw the conclusion that Oriental paper has falsified, and increase and embezzle tens of millions of dollars

in fact, muddy waters' station is a team composed of two people. The team has no obvious research experience in the research of paper industry in China and abroad, and only paid a 90 minute visit to Oriental paper after a snowstorm

at the same time, muddy waters said that according to the financial audit report, this institution is Hebei Oriental Paper Co., Ltd., a subsidiary of Oriental paper (China) Co., Ltd. the problem is that Hebei Oriental Paper Co., Ltd. is not a subsidiary of China Oriental Paper Co., Ltd. the National Laboratory of new materials of Oriental paper, national quality inspection center, engineering (Technology) research center The strength of enterprise technology centers and scientific research institutes has been significantly improved. The subsidiary of (China) Co., Ltd. is Hebei Baoding Oriental Paper Co., Ltd

on July 1, muddy waters responded to Oriental paper and reiterated its strong selling rating. The reason for its query is:

from the perspective of production. Oriental paper claims that every enterprise's survival is to ensure a certain profit margin. Its annual production line is 360000 tons, but no production line in China has an annual production capacity of more than 200000 tons; According to the capacity of Oriental paper, there should be 100 trucks in and out every day, but we only see one truck

from the perspective of customers. Nine of the top ten customers claimed by Oriental paper in 2009 were unable to purchase the product volume previously claimed by Oriental paper, and the purchase volume of their customers exceeded the income of these customers

other aspects. The inventory of Oriental paper is exaggerated, and the cost of raw materials is unreliable; Hebei Shuangxing paper has less than $400000 in assets, while Oriental paper claims to have spent $13.6 million on the acquisition

on the same day, the share price of Oriental paper plummeted, plummeted from around $7, fell as low as $4.35, and closed at $5.09

On July 2, muddy waters responded to Oriental paper:

they believed that the factory equipment of Oriental paper was old, the operation was unprofessional, the product quality was poor, and the logistics equipment for transporting paper products worth $1.02 million did not exist at all

the share price of Oriental paper (ONP) plummeted by nearly 50% that week. At the last trading hour on Friday afternoon, the share price of Oriental paper rose 40.3% to $7.14. It is still about 16.9% lower than the highest price of $8.59 on Monday

On July 6, muddy waters responded to Oriental paper:

1. Oriental paper (ONP) did not clearly tell investors that it did not actually own hbop, and concealed this fact for 16 months

2. The top ten customers of Oriental paper in 2009 have changed by 80% compared with 2008. At the same time, the capital threshold for entering the list (the minimum threshold is 21million) has not changed, but the sales still increased by 56.5% year-on-year

on July 6, Oriental paper responded to muddy waters and explained and clarified muddy waters' doubts one by one:

1 muddy waters once claimed that about $30million of funds of Oriental paper had been misappropriated since October 2009. Oriental paper refuted and specifically listed two uses of the funds: $4.9 million was used to buy two sets of digital photo paper coating lines, and $26.9 million was used to buy a corrugated core paper production line

2 muddy waters once said that the income of Oriental paper in 2008 was 27 times higher than the actual income. After reviewing the 2008 financial report of hbop, a subsidiary of Hebei Baoding, the total revenue of the company in 2008 is consistent with the data in the SEC documents submitted by Oriental paper

3 in addition to muddy water, many institutional investors, including Roth Capital Partners and BD, the independent audit company of Oriental paper, have examined the large customers of Oriental paper for several consecutive times, and no financial fraud has been found

4 muddy waters once said that the company's factory rarely started work and did not see the scene of truck loading. Oriental paper responded that most production lines operate 24 hours a day, 7 days a day

5 about inventory: Oriental paper can flexibly and quickly adjust the quantity of its inventory

6 the company once again reaffirms its ability to achieve adjusted net income of $18million or diluted earnings per share of $0.98 in fiscal year 2010

on Tuesday, Oriental paper continued to fall, down 6.68% to $6.85

through its wholly-owned subsidiary Baoding Shengde paper company, Dongfang Paper Co., Ltd. controls and operates Hebei Baoding Dongfang Paper Co., Ltd. (hbop). Hbop uses recycled paper as its main raw material and is mainly engaged in the production and distribution of corrugated paper, offset paper, writing paper and other paper products and packaging products in China. It is one of the largest paper manufacturers in Hebei Province, China

muddy water sresearch, according to its official introduction, is a research organization focusing on the basic research of Chinese concept stocks, and aims to obtain a yield of more than 30% Muddy water comes from a Chinese proverb, muddy waters make it easy to catch fish Western investors sometimes have difficulty understanding Eastern culture, so their understanding of Chinese companies will be biased, and fishing in troubled waters claims to have a deep understanding of Chinese culture and enterprises

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