BearCaution

UTA Glaucus Research is Short Universal Travel Group

In this report, we present compelling evidence that Universal Travel Group (“UTA” or the “company”) is falsifying its publicly filed financial statements. We believe that UTA’s SEC financial statements greatly exaggerate the company’s revenue, cash balance and net income. UTA is actually a tiny and antiquated brick-and-mortar travel business, and its management is lying about the size and sophistication of the business in order to misappropriate funds from investors.

GFRE Glaucus Research is Short Gulf Resources, Inc.

In this report, we present compelling evidence that a rival, privately-held Chinese conglomerate owned by GFRE’s chairman and founder claims to own GFRE’s business. This suggests that insiders at GFRE perpetrated a fraud on investors: they took cash from the capital markets claiming that GFRE owned the underlying business when in fact the two Chinese subsidiaries that own and operate the business are privately owned by a company controlled by the chairman. We believe that, given the difficulty of litigating in China and the complex multi-jurisdictional organizational structure of GFRE, shareholders are most likely left without a remedy. In short,investors in this NASDAQ-listed company are likely holding worthless paper in a shell company.

LLEN Glaucus Research is Short L&L Energy, Inc.

In this report, we carve through the company’s SEC financial statements and highlight many suspicious features of the company’s ostensible record, including the fact that LLEN easily outperforms its competitors (including Chinese firms) despite its small size and despite the fact that its executive management team had little experience operating a coal mine prior to achieving such spectacular results. We also present compelling evidence that contrary to claims in its SEC filings, the company does not legally own certain assets. Chinese filings indicate that corporate funds were used to acquire a coal coking factory that is currently held in a sole proprietorship under the sole ownership of LLEN’s CEO and chairman.We have also found evidence that LLEN has not properly disclosed the company’s ownership stake in other assets and subsidiaries.

CMED Glaucus Research is Short China Medical Technologies, Inc.

A few weeks ago an anonymous short seller posted a blog entry on GeoInvesting’s website alleging that CMED committed fraud by, among other things, overpaying for acquisitions from undisclosed related parties. We here at Glaucus Research follow the U.S.-listed Chinese space closely,so we were naturally curious. We decided to investigate the allegations of fraud. Hereis what we found. We believe that the evidence supports the anonymous blogger’s allegations that CMED committed fraud by overpaying for an acquisition from an entity that appears to be secretly related to CMED’s founder, CEO and chairman. Although we could not verify all of the claims by the anonymous blogger, there are a host of other red flags to support the notion that CMED is the next Longtop (LFT) or Universal Travel (UTA).

0773 Glaucus Research is Short China Metal Recycling Holdings

China Metal Recycling Holdings Ltd. (“CMR” or the “Company”) purports to be the largest scrap metal recycling company in China. We believe that this is a lie. Publicly accessible import data from the Chinese government suggests that CMR is a blatant fraud that has deceived the market about the size of its business.

1259 Glaucus Research is Short Prince Frog International Holdings Ltd.

PRINCE FROG INTERNATIONAL HOLDINGS LIMITED (“Prince Frog” or the “Company”) is a People’s Republic of China (“PRC”) based producer of childcare products that raised RMB 536mm in a 2011 Hong Kong IPO. In this report, we present Nielsen retail sales data, a PRC government survey on consumer brand awareness, public tax records, and SAIC filings that, in our opinion, all independently indicate that Prince Frog’s actual sales are less than 25% of the figures reported in the Company’s public filings. We expect trading in the Company’s shares to be halted and its equity to be worth between HKD 0.74 to HKD 0.98 per share.

0067 Glaucus Research is Short China Lumena New Materials Corp

CHINA LUMENA NEW MATERIALS CORP (“Lumena” or the “Company”) produces and sells thenardite and polyphenylene sulfide (“PPS”) products in China. We believe that Lumena has made numerous material misrepresentations to investors and the Hong Kong Stock Exchange (“HKEX”), both in its 2009 IPO prospectus and in subsequent financial statements. In this report we present publicly available tax records and stamped hard copies of SAIC filings which, in our opinion, indicate that Lumena’s sales are 90% less than the sales reported to investors and regulators in the Company’s Hong Kong filings.

ROLTA Glaucus Research is Short Rolta Bonds

We believe that in reality, Rolta’s business does not generate free cash flow and that Rolta cannot repay foreign bondholders without refinancing. Indeed, we suspect Rolta approached foreign bond markets because it was unable to borrow in India. Ultimately, we believe that bondholders and ratings agencies have failed to price in evidence that Rolta has materially misstated its financial performance and the risk that Rolta will default on its Junk Bonds. We value the bonds at the recovery value of the offshore assets, which we estimate to be USD 0.16 on the dollar.

3823 Glaucus Research is Short Tech Pro

Tech Pro Technology Development Limited (HK: 3823) (“Tech Pro” or the “Company”) is a rollup of unrelated businesses: it manufactures and sells LED lighting products, it is a sub-leasing agent for a commercial real estate property in Shanghai, and it recently purchased a French soccer team. In this report we present publicly available SAIC filings, which, in our opinion, indicate that Tech Pro has massively overstated its reported profits and inflated the reported purchase price of its acquisitions. We believe that Tech Pro is an obvious fraud, that its equity is worth HKD 0.00 and trading of its stock should be halted to protect future investors from further losses and hopefully provide a modicum of recovery for shareholders and creditors.

TFC Glaucus Research is Short TFS Corp - Quintis

We believe that TFS will likely follow Timbercorp and Great Southern into ignominy and failure. In our opinion, TFS’s model resembles such collapsed agricultural MIS companies and their Ponzi-like structure: TFS does not generate significant cash from sales of its sandalwood, which for the most part has yet to be harvested. Instead, TFS is reliant on raising capital to plant new vintages, operate its business, make payments on its ballooning debts and pay off earlier investors. Interest payments reached 50% of cash EBITDA in FY 2016, and total borrowing has increased by another AU$ 65 million so far in FY 2017. Without access to the capital markets, TFS’s financial statements indicate it will struggle to service its debts, let alone repay them.

0607 Glaucus Research is Short Fullshare Holdings

We believe that Fullshare Holdings Ltd. (HK: 0607) (“Fullshare” or the “Company”), a 2013 reverse merger, is one of the largest stock manipulation schemes trading on any exchange anywhere in the world. In our opinion, Fullshare resembles Tech Pro Technology (HK: 3823), Huishan Dairy (HK: 6863), and Hanergy (HK: 0566), schemes whose stock price collapsed in spectacular fashion. In this report, we present independent evidence from intraday trading patterns indicating, in our opinion, that Fullshare’s share price has been manipulated. We believe that insiders have used the smokescreen of a rising stock price to secretly transfer some of the Company’s most valuable assets to the chairman and his family.

BLA Glaucus Research is Short Blue Sky Alternative Investments, Ltd.

We believe Blue Sky compensates for its overstated AUM by charging clients egregious management fees, which can reach up to 17% of the capital invested in Blue Sky funds and are charged irrespective of the performance of the underlying investment. Because investors will soon wise up, we view Blue Sky’s fee revenues as inherently unsustainable. In other cases, such as private equity, we present evidence that Blue Sky has overstated its returns on many investments (a practice we believe is systematic). Through the overstatement of AUM and returns, Blue Sky inflates its current revenue and profits, driving up its stock price and attracting further capital.

1910 Blue Orca is Short Samsonite

Samsonite International SA (HK: 1910), the world’s largest luggage maker, is listed in Hong Kong and headquartered in Mansfield, Massachusetts, in the United States. Despite a history of mediocrity which included lurching from the precipice of one restructuring to another, today Samsonite trades near all-time highs. Indeed, Samsonite trades at a premium valuation in line with luxury brands such as Burberry (BRBY) on an EV/EBITDA multiple. We believe this premium is entirely unjustified, especially given Samsonite’s questionable accounting practices and poor corporate governance.

GDS Blue Orca is Short GDS Holdings

GDS Holdings Limited (“GDS” or the “Company”) is a US-listed developer and operator of data centers in China. GDS’s stock was up 400%+ in the last year until a recent pullback. Measured off its July 2018 highs, GDS was valued at an absurd 80x EV/ TTM EBITDA, even though its interest payments now exceed its reported gross profits. Investors have indulged GDS’s staggering debt burden because of the belief in its supposedly impressive growth. But our research indicates that in reality, GDS is borrowing crippling amounts of debt to enrich insiders by acquiring data centers from undisclosed related parties which are not nearly as valuable as the Company claims. We believe that since becoming a public Company, GDS has borrowed recklessly to siphon off at least RMB 696 million to insiders by inflating the purchase price of undisclosed related party acquisitions.

JD Blue Orca is Short Pinduoduo Inc.

Pinduoduo Inc. (NASDAQ: PDD) (“PDD” or the “Company”) purports to be China’s third-leading ecommerce platform behind Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD). PDD’s meteoric rise has been near miraculous. Backed by famous venture capital firms and an investment by Tencent, in three years PDD supposedly went from a concept on a whiteboard to a USD 19 billion market capitalization. Market commentators have anointed it the fastest growing e-commerce company in the world.

CORT Blue Orca is Short Corcept Therapeutics

•Not only does Optime appear to be a captured specialty pharmacy, deriving most if not substantially all of its revenues from Corcept, but when we called Optime, its representative told us over a recorded phone call that Corcept and Optime were one and the same. We were then transferred to a second representative, introduced as a specialty pharmacy care coordinator, who reiterated that we had reached Corcept. We placed a recording of the call on YouTube (here) for any interested investor to listen. We believe, based on this evidence, that Corcept’s sole specialty pharmacy and exclusive distributor is an undisclosed related party. If Optime’s employees believe that Corcept and Optime are one and the same, then it creates the material risk that the Company is using its captured pharmacy to boost sales, hide losses or engage in other financial shenanigans. We can’t know for sure because Optime’s financials are not publicly available.

1360 Mega Expo Holdings Ltd.

Like Tech Pro and China DYF, we believe that Mega Expo is an obvious fraud, that its equity is worth HKD 0.00, and that trading of its stock should be halted to protect future investors and hopefully provide a modicum of recovery for shareholders and creditors.

1360 Mega Expo Holdings Ltd.

Like Tech Pro and China DYF, we believe that Mega Expo is an obvious fraud, that its equity is worth HKD 0.00, and that trading of its stock should be halted to protect future investors and hopefully provide a modicum of recovery for shareholders and creditors.

1360 Mega Expo Holdings Ltd.

Like Tech Pro and China DYF, we believe that Mega Expo is an obvious fraud, that its equity is worth HKD 0.00, and that trading of its stock should be halted to protect future investors and hopefully provide a modicum of recovery for shareholders and creditors.

1360 Mega Expo Holdings Ltd.

Like Tech Pro and China DYF, we believe that Mega Expo is an obvious fraud, that its equity is worth HKD 0.00, and that trading of its stock should be halted to protect future investors and hopefully provide a modicum of recovery for shareholders and creditors.

1360 Mega Expo Holdings Ltd.

Like Tech Pro and China DYF, we believe that Mega Expo is an obvious fraud, that its equity is worth HKD 0.00, and that trading of its stock should be halted to protect future investors and hopefully provide a modicum of recovery for shareholders and creditors.

1360 Mega Expo Holdings Ltd.

Like Tech Pro and China DYF, we believe that Mega Expo is an obvious fraud, that its equity is worth HKD 0.00, and that trading of its stock should be halted to protect future investors and hopefully provide a modicum of recovery for shareholders and creditors.

1717 Blue Orca is Short Ausnutria Dairy Corp Ltd.

Our extensive investigation indicates, in our opinion, that the Company inflates revenues, hides costs, misleads Chinese consumers and secretly enriches executives through undisclosed related party transactions. Accordingly, we apply a 25% governance discount to its P/E multiple, which we think is conservative considering that, in our opinion, Ausnutria is a governance nightmare whose financials should not be relied upon. After adjusting its revenue to reflect the independent evidence, we value Ausnutria at HKD 5.78 per share, a 53% downside from its last traded price. Ultimately, we view Ausnutria as simply uninvestable.

496 Blue Orca is Short Kasen International Holdings Ltd.

Today, Kasen’s only viable segment is property development, a melting ice cube as the Company sells off the last of its remaining residential units. Given that its other segments generated losses, at best Kasen should be valued on a price-to-book ratio of other similarly situated situated Hong Kong property developers (0.5x). After adjusting Kasen’s net asset value to account for projects or assets we think do not exist, we value Kasen at HKD 0.67 per share, an 85% downside from its last traded price. This is likely conservative, as a Company which fabricates capital expenditures and allows the chairman’s family to loot the public vehicle of its most valuable business is, in our opinion, simply uninvestable.

867 Blue Orca is Short China Medical System Holdings

In our opinion, evidence suggests that the Company exaggerates its financial performance, inflates profits and conceals that dwindling Company profits are used to privately enrich its chairman. If we value the Company on the profits CMS discloses to Chinese authorities and apply a modest 25% corporate governance discount to its P/E multiple, we value CMS at HKD 3.95 per share, a 62% downside from its current price. Yet given overwhelming evidence suggesting that CMS misleads investors, we believe that CMS is simply uninvestable.

6186 Blue Orca is Short China Feihe Ltd.

In this report, we present multiple independent data points which, in our opinion, indicate that Feihe overstates IMF revenues, understates billions in operating costs such as advertising and labor expenses, understates headcount by as much as 10x, and materially inflates profitability. Notably, Feihe recognizes revenue when it hands products to its logistics providers, which Feihe repeatedly insists are independent third parties. But our investigation indicates that Feihe’s primary logistics company, which claims to transport most if not all of its products, is run by a Feihe employee and operates as part of the Company. We believe that this is fatal to Feihe’s credibility, and to the integrity of its financials.

SEK Blue Orca is Short SEEK Ltd.

We think Zhaopin’s platform is rotten, which is devastating for Seek’s prospects. Seek has historically paid a dividend, giving the false impression that its business produces healthy profits and cash flows. But these payments have been largely funded by debt. A serial acquirer, Seek has repeatedly tapped the capital markets to fund acquisitions, raising its Net Debt-to-reported EBITDA to 3.2x. By our calculation, Seek’s true leverage is much higher. Rather than valuing Seek as a fast-growing online recruiting platform, we value Seek for what it is—a slow or no-growth platform whose core business is shrinking and which carries a dangerous amount of debt. Even if we value Seek’s Australian and nonChina businesses at a generous 20.5x EV/adjusted EBITDA, we believe Zhaopin merits a substantial discount. We value Seek at AUD 7.20 per share, a 69% downside from its last traded price.

SY Blue Orca is Short So-Young International Inc.

Lips can be fake. Financials shouldn’t be. We wrote code to scrape the transaction data on SY’s platform and cross-checked the data by calling the clinics to verify the number of procedures actually performed. The results showed widespread fake bookings, indicating, in our opinion, that SY is fabricating the popularity of its platform and exaggerating the revenues derived from it. In our view, SY’s financials and its booking platform are about as real as its customers’ faces.

HYZN Blue Orca is Short Hyzon Motors Inc.

We are short Hyzon Motors Inc (“Hyzon” or the “Company”) (NASDAQ: HYZN), a zero -revenue hydrogen EV SPAC which we liken to a Chinese Lordstown Motors. In our opinion, Hyzon’s supposed major customers are a fake-looking Chinese shell company incorporated three days before the deal announcement and a tiny New Zealand startup which told us they are not really a customer.

SLI Blue Orca is Short Standard Lithium Ltd.

Standard Lithium has told investors that the technology has already achieved “proof of concept” and that its Demonstration Plant is a success. Yet undisclosed to investors, production records filed by Standard Lithium with the Arkansas regulator indicate that actual recovery rates are far lower than projected by the Company, indicating that the Demonstration Plant is extracting far lower quantities of lithium than should be the case. The data also shows that recovery rates are getting substantially worse the more brine is processed, suggesting the pilot facility has negative scale. In short, we think this regulatory data is a smoking gun which indicates that the technology is neither economically viable nor scalable. Standard Lithium’s absurd valuation rests solely on the viability of this Demonstration Plant, making this data, in our opinion, near fatal to the Company’s NPV projections and therefore its stock price.

LICY Blue Orca is Short Li-Cycle Holdings Corp.

We are short Li-Cycle Holdings Corp. (“Li-Cycle” or the “Company”), a battery recycling SPAC trading at 96.8x LTM revenues on the promise of a low cost, low capital expenditure recycling model. But such promise is a fiction. In our opinion, Li-Cycle is a near fatal combination of stock promotion, laughable governance, a broken business hemorrhaging cash, and highly questionable Enron-like accounting.

HPR Blue Orca is Short Innovative Industrial Properties, Inc.

We are short Innovative Industrial Properties, Inc. (the “Company” or “IIPR”), a marijuana bank masquerading as a REIT. IIPR’s model is to conduct sale-leaseback transactions with cannabis producers who are otherwise prohibited from borrowing money because of federal regulations.

MNSO Blue Orca is Short MINISO Group Holding Limited

We are short MINISO Group Holding Limited (the “Company” or “MINISO”), a global retailer based in China which claims to operate an asset-light, high-margin network of over 5,000 allegedly independent franchise stores selling stuffed animals, plush toys and knickknacks.

PLL Piedmont Lithium Inc.

We are short Piedmont because without Atlantic’s Ghana supply, Piedmont and any promise of near-term revenue from its much-hyped Tennessee facility are dead on arrival. Without Ghana, industry experts and even a former Piedmont senior executive have confirmed that Piedmont is unlikely to find a source of replacement spodumene. Additionally, FOIA requests we obtained from the Department of Energy (“DOE”) suggest that the spodumene from Ghana was important to Piedmont’s grant proposal, meaning that the loss of the offtake agreement, and questions surrounding Piedmont’s own potential liability under the FCPA and other anti-corruption statutes, raise doubt about whether Piedmont will ultimately receive the conditional government funding.

STEM STEM Inc.

Our extensive due diligence has uncovered that undisclosed to investors, STEM is financing its flagship customer to purchase energy storage systems from STEM. Rather than a “big win” and proof that STEM could compete for big utility scale projects, we think STEM won its supposed flagship deal by surreptitiously paying for it.