Blue Orca argued China Feihe overstated revenue and profitability relative to channel evidence and understated advertising and distribution expense. The company rejected the findings and the shares later recovered — a reminder that not every case resolves the short seller's way.
We did not write this report. We catalogued it. The underlying research was published by Blue Orca Capital. The Forensic Ledger does not endorse its conclusions. Always read the original document.
The channel test
Infant formula demand is measurable at the shelf. The report compared reported sell-through against channel and tax data.
Findings
- Reported revenue above what distributor and channel checks appeared to support
- Advertising and promotion spend low versus peers in a marketing-intensive category
- Margin profile above comparable domestic and international brands
The counterpoint
The company issued a detailed rebuttal, resumed trading, and the shares subsequently traded higher. Readers are encouraged to weigh both documents and draw their own conclusions.
subsequent events
- 2019-11-21Report published; shares suspended then resume
- 2019-11-26Company publishes detailed rebuttal; shares recover
- 2020-12-31Shares trade above the pre-report level
Source — https://www.blueorcacapital.com/
Not investment advice. This dossier summarizes a third-party short report. The Forensic Ledger did not produce the underlying research and does not endorse its conclusions. Nothing here is a recommendation to buy, sell, or hold any security. Always consult the original source and a licensed professional. See our full disclaimer and source-citation policy.