Muddy Waters is Short Superb Summit International Group Ltd (HKG:1228) as reported earlier today by Activistshorts. A spokesperson for Muddy Waters declined to comment to ValueWalk. See the full report below.
In “Superb Summit (Part I): It’s a Long Way Down from Here” Muddy Waters explains why we are short 1228.HK.
In this 18-page report, we show that virtually all of its reported 2012 and 2013 revenue belongs to a different company, its recent acquisition of a stake in coal liquefaction company Beijing Jinfeite (“JFT”) is utterly without substance because JFT is effectively a one-man operation, and Superb has an unbroken seven-year track record of completely failing in every new line of business it has purportedly pursued. In short, Superb’s raison d’etre is being a public company.
Superb Summit Reported 2013 Revenue of HK$773.3 million. Its Real Revenue Was Likely Close to Zero.
Almost all of the revenue Superb Summit reported in 2013 and 2012 was likely attributed to Superb Summit’s purported subsidiary Tianjin Libao Coal Trading Company (“Tianjin Libao”). The problem is that Superb Summit has never owned any stake in Tianjin Libao. Superb Summit falsely claims to have acquired 80% of Tianjin Libao in 2012. It is hard to think of an explanation other than fraud to explain why Superb Summit claims to own a company that it in fact does not own.
Tianjin Libao purportedly enabled Superb Summit to enter the coal trading and logistics business. Superb Summit claimed to acquire Tianjin Libao in July 2012, which is when Superb Summit first began issuing releases about coal trading agreements with China State Shipbuilding Corp.’s (“China Shipbuilding”) procurement department.1,2 None of Superb Summit’s
subsidiaries shown in the 2013 AR have coal-related businesses in their scopes of business.3 The first year for which Superb Summit recorded coal trading revenue was 2012, during which Tianjin Libao constituted the entirety of Superb Summit’s coal trading revenue.
See the full report below