China-Biotics, Inc. (CHBT) may have fabricated revenues and earnings reported to U.S. regulators, China Economic Review [ER], a magazine published in Hong Kong and owned by the SinoMedia Group, said in a report on Seeking Alpha.
According to Economic Review, China-Biotics’ claimed distribution channels for its retail products in the Shanghai market are wildly overstated, and that the products themselves are not popular enough to justify reported revenue figures.
ER also says that the firm’s Shanghai production facility appear not to be large enough to generate the implied output of retail products, and that all bulk additives customers named by the company denied the existence of any business relationship (read the whole report here).
At last check, shares of China-Biotics were trading down 7.55% to $8.70 on above average volume. Approximately 740,000 shares have traded hands today vs. average 3-m volume of 475,000 shares.
China Biotics is engaged in the research, development, production, marketing and distribution of probiotics products.