Ausnutria (1717.HK) Own-branded goat milk powder business with fast growing trend; opening up elderly market with goat milk powder products September 25, 2019 40

PSR Recommendation: BUY Status: Upgraded
Target Price: HKDHKD15.70

Investment Summary
Short seller Blue Orca has recently published reports about Ausnutria Dairy. The main
allegations include overstating import data of infant milk formula, revenue and profits;
understating its labor and staff costs; misleading Chinese consumers in relation to the
ingredients of Kabrita infant goat milk formula; the acquisition of the 40% equity interest in
Nutriunion HK was a sham transaction to unjustly enrich insiders, and the independence of
the company’s distributors. Apart from releasing voluntary announcement clarification, the
independent review committee has been established and engaged the independent consultant
to conduct the independent review.

About the author

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Tracy Ku
Investment Analyst

Graduated from Chinese University of Hong Kong, majoring in Economics for Bachelor Degree, and Journalism for Master Degree. Worked in financial news industry for more than four years.
Currently cover retailing, property sectors and IPOs. Good at analysis for the companies with economic policies and industry prospects.

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